China promised on Tuesday to reduce trade friction with the United States by reopening its market to US beef, reducing piracy of American goods and beginning talks by end of next year to open its huge government procurement market to foreign firms.
"We were able to make some clear progress in a number of core areas," US Commerce Secretary Carlos Gutierrez told reporters after a meeting of the US-China Joint Commission on Commerce and Trade, an annual forum aimed at addressing trade problems between the two countries.
The meeting came nine days before Chinese President Hu Jintao will meet with US President George W. Bush at the White House. US business groups, while welcoming the new commitments, want to hear more from Hu on what China will do to reduce its trade surplus with the United States, which hit a record $202 billion last year.
US manufacturers, in particular, hope Hu will announce that China is prepared to move more quickly to a fully flexible exchange rate. They contend China's yuan is undervalued by as much as 15 to 40 percent, giving China an unfair trade advantage that contributes to the massive deficit.
"It would be unscientific and unfair to lay all the blame on China for the US trade deficit issue," Chinese Vice Premier Wu Yi said at a joint news conference with Gutierrez and other top US officials. "But still the Chinese government attaches great importance to solving the US deficit."
She told reporters a delegation of more than 200 Chinese business executive that has been travelling with her would have signed more than 100 contracts with US companies totalling some $16 billion before going home. That included a deal signed on Tuesday at the Commerce Department to buy 80 Boeing 737 airplanes, valued at an estimated $4.6 billion.
China also pledged to reopen its market to US beef, once technical details have been worked out. China, like most other countries, banned US beef after the first case of mad cow disease was found in the United States in December 2003.
US Agriculture Secretary Mike Johanns told reporters he was optimistic the United States and China could agree quickly on terms for restarting beef trade. "I think they're dealing with us in good faith and I'm very optimistic we can work out the protocols ... and start shipping beef," Johanns said.
China imported about $100 million of US beef annually before the ban, making it a relatively small market. But US producers see strong growth potential because of the country's booming economy and Chinese consumers' fondness for beef.
US officials welcomed China's decision to fight high rates of software piracy by requiring Chinese computer makers to preload legal operating system software and to require government agencies to buy only such computers.
China also pledged increased efforts to fight piracy of music and films, similar to recent enforcement actions it has taken against 14 factories producing illegal optical discs.
The United States has been considering a World Trade Organisation complaint against China for failing to stop piracy and Gutierrez said Washington would be watching closely to see if Beijing's latest pledges have any affect.
"The numbers will ultimately tell the story and we will be able to track sales of those products, brands and categories that will be impacted ... by the policies that Madame Wu Yi announced," Gutierrez said.
Wu also said China would begin negotiations by the end of 2007 on opening its government procurement markets to foreign firms. US business groups welcomed the announcement as a step toward fulfilling a pledge China made when it join the WTO four years ago, but said they would push for talks to start sooner.
In another development, Wu said China delivered a long overdue report on the extent of subsidies in the Chinese economy earlier this month to the WTO.
US officials said they had not yet received a copy, but were eager to see how much detail Beijing had provided. They had previously said the report could be useful in challenging Chinese subsidies through the WTO.