Some United States officials' paranoia over high-tech exports to
China, which the US sees as a key reason for bilateral trade
imbalances, seems to have abated a bit.
In a welcome move that could improve Sino-US trade relations, US
President George W. Bush earlier this week certified that some
potential high-tech exports to China by Honeywell and Boeing will
not hurt US interests.
It is hard to predict whether the US will delink more high-tech
shipments to China from its security concerns. At least, the US is
not imposing new restrictions.
At a time when both sides are eager to curb trade surpluses that
favor China, such a move is more constructive than pressing China
to sharply appreciate the renminbi exchange rate.
It is unrealistic to expect China to implement radical changes
in its exchange rate to resolve problems in the trade sector. This
will not only damage the Chinese economy a key engine for global
growth but will have little effect in reducing the US trade
deficit.
China has a genuine need to achieve more balanced trade with its
trading partners. A colossal and rising trade surplus is causing
trouble at home as the money earned by Chinese exporters is adding
to funds available for investment, which in turn leads to risks of
an overheated economy.
The country has been intensifying its efforts to control exports
and increase necessary imports by significantly adjusting tariffs
for related imports and exports, among other measures.
Before the latest decision by Bush, the US had long been
reluctant to reduce the barriers for bilateral high-tech trade.
Reducing high-tech trade barriers with China is a key area where
the US government can take steps to help US companies earn more
money in China and help narrow the US-China trade deficit.
In 2006, the US revised rules for the control of technology
exports to China. But the revisions were at least as stringent as
the previous rules. In fact, the US government fined Boeing for
selling China what it believed was sensitive technology.
Bush's decision this week does not necessarily herald a new era
for Sino-US trade. But it is an encouraging move.
(China Daily February 15, 2007)