China and U.S. seek to soothe trade tension


Evans (l) shakes with Shi, as the United States and China seal a joint commission aimed at resolving their trade differences

By CNN's Alex Frew McMillan
and reports

HONG KONG, China (CNN) -- With trade tensions between the two countries intensifying, China and the United States have set up a joint commission on economic and trade issues.

But trade ties are also strengthening. China's exports to the United States rose 8 percent for March, over last year, China said Tuesday.

They totaled $4.7 billion for the month, despite an undertow from the U.S. economic slowdown.

China's foreign-trade minister, Shi Guangsheng, announced the cooperative commission in Beijing on Tuesday, after a visit from U.S. Commerce Secretary Donald Evans.

"The mechanism aims to strengthen cooperation between our two sides and handle as early as possible any trade and economic problems between the two countries," Shi said, according to Xinhua, the state news agency.

Increased dealings between ministries

Evans, who is visiting China with a delegation of 15 U.S. executives, also met Chinese President Jiang Zemin. The thorny topic of U.S. relations with Taiwan surfaced (full story).

On the trade front, the idea behind the commission is to increase communication between officials at China's foreign-trade ministry and their U.S. counterparts.


Evans, who is also visiting Shanghai with his executive group, met Jiang Zemin (r) in the Chinese capital

Shi said he had tackled some controversial issues with Evans, including steel exports, dumping laws and intellectual property rights.

The two countries still have not settled their differences stemming from the United States decision in March to impose widely unpopular tariffs on steel.

China's steel exports fell by one third in the first quarter, as a result of the tariffs, state media also reported on Tuesday.

But China is not a major steel exporter, with most of its steel going to domestic use. Its imports rose 17.5 percent in the first three months of 2002.

Shi said Evans is providing "technical assistance" on China's attempts to have its own goods spared tariffs.

"Our demand is to have our products exempted," Shi told reporters in Beijing. "If they can't be exempted, then they should give us compensation."

Tariffs raising hackles

Evans, who has moved on to Shanghai, did not comment on the steel tariffs. They have raised hackles around the world (full story).

He focused instead on the issue of intellectual property. Piracy is commonplace in China.

China has officially stated that the U.S. tariffs will not have a significant effect on its economy (full story). But it filed a grievance with the World Trade Organization nevertheless.

That follows the lead of major steel exporters such as South Korea and Japan. The European Union is threatening retaliatory sanctions (full story).

China has been opening its doors and bracing for increased competition after joining the WTO late last year. But it is also pushing for increased access for its own goods in return.

Evans noted that U.S. exports to China have increased dramatically over the last two years, as it became clear China would join the WTO.

China leads dumping list

The United States is China's No. 1 trade partner, followed by the Chinese region of Hong Kong. Two-way trade between the United States and China hit $80.5 billion in 2001, Chinese customs figures show.

China also consistently runs a large trade surplus to the United States.

China's exports to the United States rose 4.2 percent in 2001, to $54.3 billion. U.S. trade to China leaped 17 percent to $26.2 billion.

A WTO report released this week states that China is the country most often investigated for claims of illegal dumping, selling goods below cost overseas.

China was named in 25 cases over six months, the WTO found. The United States was second, with nine cases, tied with Brazil, Hong Kong and Thailand.