Page last updated at 09:46 GMT, Thursday, 29 October 2009

China and US discuss trade rows

US Commerce Secretary Gary Locke (L) and Chinese Vice Premier Wang Qishan in Hangzhou - 29 October 2009
Both sides are keen not to let the trade disputes affect the relationship

US and Chinese officials have been holding talks in China on trade, clean energy and climate change.

The meeting comes less than three weeks before US President Barack Obama's first visit to China.

The talks are being held amid simmering trade disputes in several areas, claims of protectionism and a wide US trade deficit with China.

US Commerce Secretary Gary Locke said it was "critical" to demonstrate that the two countries could work together.

Mr Locke is leading the American delegation for the 20th meeting of the US-China Joint Commission on Commerce and Trade, being held in the eastern city of Hangzhou.

"It is critical to make concrete, demonstrable progress today to demonstrate to the people of both the US and China that we can work together," Mr Locke said in his opening remarks on Thursday.

Vice Premier Wang Qishan, leading the Chinese side, urged both sides to "stand firmly against all forms of trade protectionism and work together to promote the recovery of economic growth".

"Economic interdependence deepens day-by-day, and one cannot do without the other," he said.

Tyre dispute

On Wednesday, China had announced it would investigate suspicions that the three big US automakers were getting government subsidies or selling their products in China at less than the cost of production.

Cargo unloaded onto lorry at Tianjin, China - file photo
The US trade deficit with China is the world's largest

If so, China could raise its tariffs on US auto imports - a move unlikely to harm Ford, General Motors or Chrysler as most of the cars they sell in China are made there in joint ventures with local partners.

But the issue has the potential to further sour the trade climate ahead of President Obama's visit to China in mid-November.

Last month, Mr Obama imposed punitive duties of up to 35% on imports of Chinese-made tyres.

China responded with an "anti-dumping" probe into US car parts and chicken meat imports.

US manufacturers have long complained that China's management of its currency is one of the main reasons for the yawning bilateral trade deficit.

With recession in the US slowing imports, the deficit dropped 15% in the first eight months of 2009 to $143.7bn - its biggest with any country - compared to the same period the year before.

Other "priority market access issues" would also be discussed, Mr Locke said.

DVD and music store in Beijing
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The US wants to see Chinese restrictions lessened on US agriculture, pharmaceuticals, telecommunications and business services, and improved protection of intellectual property rights and co-operation on clean energy technology.

US officials have said they do not expect the trade issues to affect overall ties.

The two countries are expected to discuss climate change at Hangzhou and to sign a memorandum of understanding on energy co-operation.

But on Wednesday, the senior US climate change negotiator, Todd Stern, said the two countries would not reach a "broad agreement per se" during President Obama's visit to China next month.

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