Economy

STEVE INSKEEP, host:

NPR's business news starts with low expectations from talks with China.

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. There is not much progress on the big issue that divides them - the huge U.S. trade deficit.

Here's NPR's Frank Langfitt.

FRANK LANGFITT: To many American workers, China has come to symbolize the costs of global competition. That's how Treasury Secretary Henry Paulson put it yesterday as he opened high-level talks between the two countries.

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

Secretary HENRY PAULSON (U.S. Department of Treasury): Americans have many virtues - we are hard-working, innovative people - but we are also impatient. It's up to us now, over these two days and in the work that follows, to show that the words - our words - are precursors to actions.

LANGFITT: 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.

Vice Premier WU YI (China): (Through translator) Politicizing economic and trade issues is absolutely unacceptable, since it is of no help at all but will make the situation even more complicated.

LANGFITT: The last person to speak was a guest of Paulson's: Henry Kissinger. Amid the tough talk the former secretary of state reminded both sides how far their relationship has come. In 1970, as Kissinger was looking to establish relations with China, he recalled that trade between the two countries was essentially zero.

Mr. HENRY KISSINGER (Former U.S. Secretary of State): As Vice Premier Wu Yi has pointed out, the scale of our trade is of a magnitude beyond anybody's imagination when this relationship started.

LANGFITT: China now has the world's fourth-largest economy, behind Germany, Japan and the U.S. The economic talks in Washington wrap up today.

Frank Langfitt, NPR News.

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