Bloomberg News

China Urges U.S. to End ‘Political’ Vetting of Its Firms

December 20, 2012

China wants the U.S. to end its “political background check” of Chinese companies seeking to do business in America, the nation’s vice premier said as economic talks between the two nations concluded.

“Our two countries have to strengthen our economic relationship,” Vice Premier Wang Qishan said through a translator at a dinner in his honor yesterday after the annual U.S.-China Joint Commission on Commerce and Trade meetings in Washington.

Wang said Chinese companies want to ensure that they receive fair treatment in the U.S., regardless of their links to the Communist Party, while acknowledging that checks for national security concerns should continue. He said U.S.-based businesses operating in China also want to ensure that they receive treatment on par with domestic competitors.

Economic tensions between the U.S. and China, the world’s two largest economies, are high amid trade disputes over solar cells, clean-energy programs, autos, rare-earth elements and electronic-payment services. In October, a U.S. House intelligence committee report accused Chinese phone-equipment makers Huawei Technologies Co. and ZTE Corp. (763) of providing opportunities for the country’s government to spy on the U.S. industry. Huawei said at the time the report’s outcome was pre- determined, and ZTE said it was too narrow in scope.

China’s biggest concern in its economic relations with the U.S. is ensuring that the country receives “fair and equal treatment,” Chen Deming, the country’s commerce minister, said at a news conference earlier yesterday.

Intellectual Property

U.S. Trade Representative Ron Kirk and Acting Commerce Secretary Rebecca Blank, co-hosts of the economic summit, said at a separate news conference that the U.S. welcomes foreign direct investment from China and other nations.

China agreed to increase its enforcement of intellectual property laws, with an emphasis on ensuring that government- owned companies use legal versions of software and not pirated copies, Blank told reporters.

The talks took place after China’s ruling Communist Party concluded a once-a-decade leadership change and President Barack Obama was elected to a second term.

“We’re entering a unique moment in which we can work together” because of the political situation in both countries, Blank said.

Wang said at the dinner that recovery from the global economic crisis is still ongoing, and growth may be sluggish for the next three to five years.

Duties Raised

The economic discussions were held a day after Blank’s agency raised import duties on wind towers from Chinese producers and exporters, increasing tariffs announced earlier this year for companies including Chengxi Shipyard Co., Titan Wind Energy Suzhou Co. (002531) and the Chinese unit of CS Wind Corp., based in South Korea.

A U.S. industry complaint last year triggered the department’s action, the latest example of a dispute between the U.S. and China over government support for clean energy.

Kirk said the talks this week are important to improving trade relations between the two nations.

“When we solve problems, that’s what leads to this explosive growth in our trade,” he said at the dinner.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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