U.S. and China Find Common Ground

Large enterprises from both countries have signed commercial contracts worth billions of dollars.

General Motors, Cisco, Ford, Oracle, China Mobile – last Tuesday significant groups belonging to eleven industrial sectors announced the signing of some 35 commercial agreements between China and the U.S. This comes just before a meeting in Maryland between officials of both countries for “strategic dialogue,” decided upon in 2006 by Presidents George W. Bush and Hu Jintao, the object being to conclude some 70 contracts comprising a total of 13 billion dollars (8.5 billion Euros).

Since the commercial deficit between the two countries is abysmal, and tensions quite high about the exchange rate with the yuan, this series of accords in the key sectors of technology, electronics and telecommunications, seems to be thumbing its nose at protectionist attempts. “Openness and commerce create jobs and opportunities for people to escape poverty, and are necessary for growth and stability, in China as in the U.S.,” Treasury Secretary Henry Paulson said on Tuesday. Washington and Beijing could also start negotiations toward a treaty on bilateral investments.

COMMON GROUND

Wang Qishan, the Chinese Vice Prime Minister, called these transactions “cornerstones” of the bilateral dialogue between the two world giants, both of which are suffering from unsettled economies. The biennial meetings attended by Chen Deming, Commerce Minister, Henry Paulson, Treasury Secretary, and the presidents of the two central banks, are looking to settle monetary differences, issues of commerce and intellectual property, and more recently, the question of securing enough energy for China, whose appetite contributes to the overall rising of prices of raw materials.

Both parties have reason to find common ground. The U.S., in slow growth, or even a recession, wants to ensure a Chinese market for its businesses, especially in the financial sector. China wants to maintain growth and limit exterior pressure by marking territory for its new champions in search of internationalization. The signature of these contracts also responds to critics of the “strategic dialogue,” noting concrete results.

In several months a new team will arrive at the White House, and relations will evolve. Henry Paulson, architect of the bilateral meetings, will need to cement a new dialogue with Wang Qishan, who replaced Wu Yi at the last party congress in March. Wu Yi had carefully managed all the moving parts of the Chinese-American dialogue.