WASHINGTON - five years and a financial crisis since the United States and China began regular high-level economic talks, Beijing to rapid growth might have the upper hand this week in the latest round of discussions between the world's two largest economies.
China faces threats of sanctions against the goods shipped to its largest foreign market unless it does more to end what American manufacturers are unfair trade practices, including the currency manipulationwhich have cost American jobs.
At the same time, most large foreign creditor of America wants assurances 1.2 trillion in holdings of US Treasury are safe despite uncertainty over Washington to the how much money to the United States can borrow to pay its bills. If Congress fails to increase this limit to borrow before August, which would probably be send to the increase in interest rates and reduce the value of these Chinese investments.
While analysts predict major breakthroughs at the talks Monday and Tuesday, China's economic expansion could give greater influence now.
"The emphasis has shifted to make systematic progress so slow," perhaps reflecting a maturing relationship between the two nations, said Eswar Prasad, an expert from China at Cornell University.
Leading the delegation Dialogue Obama economic and strategic administration are the Secretary of the Treasury Timothy Geithner and Secretary of State Hillary Rodham Clinton. Federal Reserve Chairman Ben Bernanke and representatives of 16 federal agencies attend, too.
The Chinese team is headed by the Vice Prime Minister Wang Qishan, an economic decision maker top and includes representatives of 20 government agencies.
Negotiations have begun in the Bush administration in 2006. Under President Barack Obama, they expanded to cover foreign policy also.
The main U.S. economic objective has not changed: insistence by China to speed up the processing to let its currency to rise in value against the dollar. This would have made us exports cheaper in China products and the most expensive Chinese to the United States. It will also restrict America's deficit in trade with China, the largest with any country.
When the negotiations began, Secretary of the Treasury Henry Paulson, a former head of Goldman Sachs, gave conferences of Chinese officials on how much better their economy would perform if they eased controls on its currency and financial markets.
But the Chinese have emerged from the global financial crisis in better shape than other economic powers, mainly because of their highly regulated markets. In doing so, and much more rapid growth that United States, Beijing has won the economic influence.
"The global financial crisis changed the dynamics of the relationship," said Nicholas Lardy, an expert from China to the Institute of International Economics, Peterson. "It increased confidence of China on economic issues."
While Geithner said last week that the United States would press China to redouble its efforts to revalue its currency, the yuan, it sounds as a conciliatory tone. He noted that the yuan has increased in value by 5 percent since last June, and still more quickly once inflation has been taken into account.
Geithner said it was encouraging that Beijing was starting to approve the American vision that more rapid appreciation of the yuan would help China stifle inflation, which has fueled the growth of the country which intensifies.
A gentle approach on China's currency doesn't seem to please American manufacturers. They argue that the Chinese currency is undervalued by more than 40 per cent, and they want Congress to approve economic sanctions quickly if Beijing no longer moves.
The US trade deficit with China last year was 273 billion dollars, a fifth more than in 2009. The administration is considering filing new cases of trade against the Chinese practices of American companies argue are unfair.
At the meetings, China should raise concerns about the confrontation between the administration and Congress on the rearing of 14.3 billion to limit government borrowing. Geithner told Congress that the United States could default on its debt if the limit is not raised by August 2.
"The Chinese are concerned about this problem because they hold a lot of U.S. debt," said Prasad. "The Chinese are surprised that the Government of the United States would leave the debate to arrive at the stage where there is even a possibility of a default remote."
On other issues, US officials say they want to see more progress on the economic commitments when Chinese President Hu Jintao visited Obama in January. Those who understand the tighter monitoring of purchases by the Chinese Government of the software, a movement intended to stimulate Beijing legal purchase of U.S. software and reduce the use of pirated software. American companies say that such theft is their cost billions of dollars in lost sales.
The Chinese also pledged to reorganize a policy which limits the ability of American firms to compete for projects of the Chinese Government, unless products are designed in China. U.S. companies see this as an effort to force them to put their technology to China or be locked out of the Government market.
US firms say they have seen little progress by China to honour the commitments made during the visit of Hu.
On foreign policy, the officials said Clinton will redouble its efforts to gain the support of China to confront the nuclear threats of the Korea of the North and the Iran, and it will raise the issue of human rights. The Chinese have agreed to have some senior military officials to meet with their American counterparts. This is a first for these discussions and a development seen as an effort to ease tensions.
Chinese officials said Friday they were ready to discuss human rights. Undertaken China recently repression of greater safety in years, apparently motivated by the fear of the Communist leaders of disorders inspired in the Middle East who migrate to China.
Although analysts predict no major breakthroughs in the talks this week, said Prasad which may reflect a maturing relationship between the two nations.
"The emphasis has shifted to make progress orderly so slow rather that... coming to dramatic breakthroughs,"says."
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