It’s amazing how accommodating you can be when you’re selling someone $200 billion more in goods and services than they’re selling you.
The Memphis, Tenn., Commercial-Appeal had a big spread in its April 11 editions about a Chinese delegation signing a deal to buy 1.1 million bales from seven U.S. cotton merchants and cooperatives in Memphis.
Another Chinese group traveled to Chicago and Minneapolis and bought more than 5 million metric tons of U.S. soybeans. The groups were expected to purchase a total of $15 billion in U.S. cotton, soybeans and poultry.
The shopping spree reminded me of the trips Republic of China officials used to make to cities like Memphis in the 1970s to announce they were buying X million bushels of soybeans from the old Cook Industries Inc. or some other commodity firm.
Those were designed to show Taiwan’s appreciation for the millions of dollars U.S. taxpayers were spending to help stop mainland China from making the island another province of the People’s Republic.
The current crop of Chinese visitors has no need to show such gratitude, of course. Their biggest concern is that U.S. officials may begin to wonder why they should continue to allow China’s trade surplus with the United States to build at the rate of $11.2 billion per month as it did in March.
The delegations were part of a Chinese mission that came to the United States with China’s Vice Premier Wu Yi for the 17th annual meeting of the Joint Commission on Commerce and Trade in Washington.
The Chinese committed to addressing several trade concerns, including: providing greater access to Chinese market, improving protection of U.S. intellectual property rights in China and moving toward a “transparent and market-oriented system of government procurement in China.”
China also reportedly agreed to reopen its market to U.S. beef exports, and Agriculture Secretary Mike Johanns signed a memorandum of understanding with Chinese officials to improve bilateral cooperation on animal and plant health and food safety.
Johanns noted U.S. farmers and ranchers sold more than $6 billion in agricultural products to China, “making it our fifth largest export market.” That’s a pittance compared to the U.S. sales of Chinese products, many of them cheaper copies of U.S. goods. (A recent Manufacturing Policy Report says such piracy costs U.S. intellectual property owners $50 billion a year.)
As noted earlier, Chinese officials agreed to crack down on outright theft of intellectual property. But critics wonder if they will come any closer to meeting those promises than in re-valuing the yuan.
What do the Chinese say about the growing trade surplus? Why, it’s all the U.S. fault, of course.
On the eve of the visit to Washington, Chinese Premier Wen Jiabao told reporters that the United States must take responsibility for its economic imbalances. “It is unfair for the U.S. to scapegoat China for the U.S.’s own structural economic problems,” he was quoted as saying.