It's quite likely that the China-US trade ties enter an eventful period during Bush's second term instead of a "honeymoon" as expected by some people, said Zhou Shijian, a renowned Chinese expert on international economic and trade issues.
Zhou, who is visiting the United States, made the remark in an interview with China News Service. His views have somewhat been approved: on February 3 two senators made a proposal, urging the Bush Administration to pressure
Beijing for RMB revaluation in six months, otherwise to levy a 27.5 percent special tariff on Chinese commodities exported to the United States. The issue of RMB revaluation has been stirred up again after having subsided two or three months ago.
On the same day, the US-China Economic and Security Review Commission held a hearing to collect opinions from some American officials and entrepreneurs on questions including RMB exchange rate, US-China trade deficit and IPR protection.
In the coming four years, Zhou pointed out, China-US economic and trade exchanges will keep momentum, but with a visibly higher number of confrontations and frictions, which will focus on six questions: 1.quota setting on textile and anti-quota setting; 2.RMB exchange rate; 3.IPR protection; 4.China's fulfillment of post-transitional period WTO commitments; 5. China's market economy status; 6. China-US trade balance. Zhou believes that the first three questions are more urgent for the time being.
Regarding the RMB exchange rate, Zhou observed, although Bush won the election a survey showed that some 48 percent voters didn't support his policy. In his presidential campaign Bush was once attacked on the questions of trade with China and RMB rate by the democrats who represent labors' interests. It's quite impossible that Bush will not consider the matter therefore more pressure from his administration can be expected in the coming four years.
Exchange rate policy is economic sovereignty of a state, which can never be altered at other countries' will, Zhou stressed. If you let RMB to float like US dollar or Japanese yen now, it will be no less than driving the "bicycle" of RMB onto an "expressway" filled by "motor cars" of the dollar and the yen, and possibly see the "bicycle" killed. For the United States, RMB revaluation will not help to reduce trade deficit towards China, on the contrary, it will directly hit American companies in China.
China could gradually allow its currency to float in a wider band and pegged with the dollar, the euro and the yen together instead of with only the dollar.
Talking about IPR protection, Zhou said this is a very urgent question considering continued US pressure. The China tour of US Secretary of Commerce Donald Louis Evans before his resignation is actually not one invited by Beijing, but a "punitive expedition" by himself. The Chinese government has been engaged in a year-long crack down on IPR violations, but this remains a long-term and arduous task. The two sides should make all efforts to avoid serious trade conflicts caused by IPR disputes as seen in the mid 1990s.
As for quota setting on textile and counter actions, Zhou observed that the quota system, which had controlled world textile trade for more than 40 years, has come to an end, thus offering huge opportunity for China's textile export. For the United States, however, this means a loss of 650,000 jobs, so a series of measures including anti-dumping and temporary quota setting must be taken. This hard battle between the two countries has actually begun, when in last year the Untied States slapped quotas on imports of China-made hosiery, bras and socks.
If the United States imposes quotas simply on its one-sided judgments, China may well appeal to the WTO for a fair resolution, Zhou suggested. On the other hand, Chinese enterprises
