Some United States officials' paranoia over high-tech exports to China, which the US sees as a key reason for bilateral trade imbalances, seems to have abated a bit.
In a welcome move that could improve Sino-US trade relations, US President George W. Bush earlier this week certified that some potential high-tech exports to China by Honeywell and Boeing will not hurt US interests.
It is hard to predict whether the US will delink more high-tech shipments to China from its security concerns. At least, the US is not imposing new restrictions.
At a time when both sides are eager to curb trade surpluses that favor China, such a move is more constructive than pressing China to sharply appreciate the renminbi exchange rate.
It is unrealistic to expect China to implement radical changes in its exchange rate to resolve problems in the trade sector. This will not only damage the Chinese economy a key engine for global growth but will have little effect in reducing the US trade deficit.
China has a genuine need to achieve more balanced trade with its trading partners. A colossal and rising trade surplus is causing trouble at home as the money earned by Chinese exporters is adding to funds available for investment, which in turn leads to risks of an overheated economy.
The country has been intensifying its efforts to control exports and increase necessary imports by significantly adjusting tariffs for related imports and exports, among other measures.
Before the latest decision by Bush, the US had long been reluctant to reduce the barriers for bilateral high-tech trade. Reducing high-tech trade barriers with China is a key area where the US government can take steps to help US companies earn more money in China and help narrow the US-China trade deficit.
In 2006, the US revised rules for the control of technology exports to China. But the revisions were at least as stringent as the previous rules. In fact, the US government fined Boeing for selling China what it believed was sensitive technology.
Bush's decision this week does not necessarily herald a new era for Sino-US trade. But it is an encouraging move.
(China Daily February 15, 2007)
