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U.S., China Discuss Trade Deficit

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U.S., China Discuss Trade Deficit

Economy

U.S., China Discuss Trade Deficit

U.S., China Discuss Trade Deficit

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U.S. and Chinese leaders are meeting in Washington this week to work on one of the world's most important — and difficult — economic relationships.

But don't expect much progress on the big issue that divides them: the huge U.S. trade deficit.

To many American workers, China has come to symbolize the costs of global competition.

That's how Treasury Secretary Henry Paulson put it Tuesday as he opened high-level talks between the two countries.

He also said China needs to move faster to reduce the trade imbalance and help change that impression.

"Americans have many virtues — we are a hard-working, innovative people — but we are also impatient. It's is up to us, over these two days and in the work that follows to show that words are precursors to action."

The trade deficit with China topped $230 billion last year and Congress is considering sanctions.

But Vice Premier Wu Yi — who leads the Chinese delegation — warned against it.

"Politicizing economic and trade issues is absolutely unacceptable, since it is of no help at all and will make the situation morec omplicated," he said.

Amid the tough opening words, Former Secretary of State Henry Kissinger reminded both sides how far their relationship has come.

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In 1970, as Kissinger was laying the groundwork for establishing relations with China, he recalled that trade between the countries was essentially zero.

"As Vice Premier Wu Yi has pointed out, the scale of our trade is of a magnitude beyond anyone's imagination when this relationship started," Kissinger said.

China now has the world's fourth-largest economy behind Germany, Japan and the United States.