MercoPress. South Atlantic News Agency

China and US begin round of trade and currency talks

United States and China have played down their differences ahead of a series of high-level trade talks taking place this week in Beijing. China's product safety record, its massive trade surplus and what some in Washington see as Beijing's currency manipulation are high on the agenda.

Some members of the US Congress want forceful action against China. But senior figures from both countries said the two nations had to work together to fight protectionism. China's vice commerce minister, Chen Deming, has stressed how increasingly interdependent on one another China and the US were. In an interview with the China Daily newspaper, he warned that focusing too closely on the value of the Yuan and intellectual property rights could harm trade. "The two sides should clarify the responsibility each side should shoulder, face and resolve structural problems in the economy, and strengthen dialogue and communication," Mr Chen said. Meanwhile, US commerce secretary, Carlos Gutierrez acknowledged that there were protectionist sentiments held by some in both China and the US. "We have to continue opening global markets. America and China must work together to stem the tide of protectionist sentiment in our nations," Mr Gutierrez said. "It is ironic that we have found that protectionism does not protect. The only thing that does protect is innovation and engaging with the world, competing, being more productive." Scandals over problems with products made in China - from toys to food - mean that safety of goods will be high on the agenda of the talks, which also feature treasury secretary Henry Paulson and trade representative Susan Schwab. "How they (China) deal with these issues they've had with product safety is very important," Mr Gutierrez said. "I would have to assume that the brand 'China' is very important to the Chinese." And with China's trade surplus with the US set to break last year's record 233 billion US dollars figure, this is also set to be discussed. Critics have claimed that China keeps the Yuan artificially low in a bid to boost exports to the US while making American products more costly in China. Last month, trade talks between China and the EU again raised concerns that China did not protect the intellectual property rights of European companies. There was also concern about the vast trade surplus between the 27-nation block and China. Trade between the EU and China is expected to top 300 billion Euros (444 billion US dollars) in 2007 but the EU's trade deficit with China is expected to rise to 170 billion Euros. But China also has its own domestic problems partly caused by its huge trade surplues. Annual wholesale inflation reached 4.6% in November, with rising oil prices the reason behind its fastest pace for two years. This compares with a 3.2% annual rate in October and is the fastest rate since August 2005, when wholesale price inflation hit 5.3%. Analysts fear that wholesale prices will feed into consumer inflation, already buoyed by high food prices. Consumer price inflation is at an 11-year high, hitting 6.5% in October. The October consumer figure matched the August figure, both buoyed by rising food prices. Food has a lower weighting in the wholesale index than it does in the consumer index. Oil prices - which jumped 22.6% in November, compared with a rise of 4.2% in the previous month - contributed to the rise in wholesale prices.