Beijing urges US to lift export controls

WASHINGTON, May 10 (AFP): China urged Washington to lift export and investment controls directed against Beijing, saying such a move could go a long way towards conquering the steep trade imbalance between the two powers. But in their annual bilateral dialogue, US officials continued to press Beijing over its allegedly undervalued yuan as a way to redress China's $273 billion trade surplus with the United States. "The way to resolve this imbalance is to ease the export control regime of the United States towards China and to encourage US exports to China rather than restricting Chinese exports to the United States," Chen Deming, the Chinese trade minister, told reporters. Chen said Washington's forex argument over the trade issue between the world's two largest economies "is not founded." Over the past three years, he said, China's overall trade surplus has continued to decline and fell to about $180 billion, or 3.1 per cent of gross domestic product. By international standards, that is "a very healthy share," he said. "We have a balanced trade with all other countries except the United States," he added. Earlier US Treasury Secretary Timothy Geithner opened the two-day US-China Strategic and Economic Dialogue by placing China's need for a more flexible exchange rate and more open capital markets top of a list of things to discuss. President Barack Obama, in an Oval Office meeting with the co-chairs of the Chinese delegation -- Vice Premier Wang Qishan and State Councilor Dai Bingguo -- "encouraged China to implement policies that support sustained and balanced global growth as well as a more balanced bilateral economic relationship," the White House said. Chinese firms seeking to buy sensitive US technologies or invest in US tech firms -- especially those with security- or military-applicable technologies -- must get approval, and denials and delays have angered Beijing. In the past three years, for example, Chinese mobile network equipment giant Huawei has been stymied in two attempts to buy US technology companies, and was also blocked on national security reasons from selling equipment to top US mobile phone provider Sprint Nextel. Both sides emphasised the progress they had made on economic relations, and stressed that cooperation will remain crucial for the global recovery from the 2008-2009 economic downturn. But Geithner called on China to adopt a "new growth model, driven by more domestic demand, with a more market-based economy and a more sophisticated financial system." Separately, Geithner also highlighted the need for China to strengthen intellectual property rights and to be more welcoming to foreign investors. Wang suggested the United States needs to do more on its own to strengthen the world economy. "The key to global economic recovery still lies with the United States," he said. The talks come as the world's two biggest economies grow increasingly intertwined. China is the biggest foreign financier of the yawning US public debt, with US bond holdings of $1.154 trillion in February.