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Wu Paves Way for Hu in US

President Hu Jintao faces a tough job on his trip to the US this month. He faces an aggressive anti-Chinese attitude, fuelled by fears for US jobs, and loss of US influence in Asia. But a cheque-book charm offensive is underway…

A corporate advance party of over 100 Chinese firms, led by Vice-Premier Madam Wu Yi, is expected to offer billions of dollars in sweeteners to US companies, including orders for 80 new Boeing 737s; a US$1 billion hi-tech deal for Flextronics; US$560 million for Motorola; US$300 million for Microsoft; US$350 million for GE Energy; as well as $306 million, US$110 million, and US$80 million contracts for General Motors, Ford and Daimler Chrysler respectively. Quite a tea party!

The PR offensive is not far behind, and Chinese officials have noted that Chinese goods save US companies US$100 billion, and that much of the profit from Chinese exports goes to US companies anyway (though licensing, patents, and offshore manufacturing operations).

But it is not only Chinese officials making the case for China in relation to the US and their trade deficit. An article in the FT notes:

The article goes on to note that a substantial re-valuation of the Renminbi, of the sort demanded in the US, would just move production to other low-cost locations (but not back to the US), while China will move up the value chain.

Specific targets for the visit are reported to include:Creating understanding of challenges and risks (at home and abroad) associated with rapid opening up and reform the Chinese economy; the Promoting US investment in China, US purchase of Chinese goods, and opportunities for Chinese corporate investment in the US; Promoting China’s position on the international political stage; and addressing issues in relation to Taiwan, Japan and North Korea.

The debate will continue, but hopefully it will become better-informed with the help of Hu’s visit.

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