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Clinton Calls for `Level Playing Field' for U.S. Companies in China Trade

U.S. Secretary of State Hillary Clinton urged China to work more cooperatively with American companies eager for a larger share of the Chinese market.

“For trade to work in any economy, it needs to be a level playing field where domestic and international companies can compete freely,” she said today at Shanghai’s Pudong Airport after meeting with 15 U.S. aviation executives to discuss the challenges they face operating in China. U.S. companies “want to sell goods made by American workers to Chinese consumers with rising income and increasing demand.”

The Obama administration sees China as central to its goal of doubling exports in five years and creating 2 million U.S. jobs. Clinton and officials including Treasury Secretary Timothy F. Geithner will address trade and investment barriers that could impede that goal at the second annual U.S.-China Strategic and Economic Dialogue that starts tomorrow in Beijing.

Clinton said China should increase its transparency in rule making and copyright protection laws, calling them “vitally important in the 21st century economy.”

China is America’s second-biggest trading partner after Canada, and the largest foreign investor in U.S. government debt.

While there is skepticism in some quarters about how realistic the administration’s export goal is, U.S. officials are confident they can meet it, Commerce Department Undersecretary Francisco Sanchez said yesterday in Shanghai.

“We can do that,” he said.

Overshadowed

Trade and commercial diplomacy were to be the main themes of Clinton’s trip before they were overshadowed by a report finding North Korea responsible for the sinking of a South Korean naval vessel. At the 2010 World Expo in Shanghai, the U.S. Pavilion highlighted American companies including Pepsi Co. and Chevron Corp., whose donations helped build the 6,000-square meter space.

U.S. officials during the Beijing talks will focus on a new Chinese contracting program that could threaten Obama’s export goal. China last year announced an “indigenous innovation” system that proposed to buy only domestically-made software and equipment.

“In the coming days, officials at the highest level in our administration will discuss issues of economic balance and competition with our Chinese counterparts,” Clinton said.

The new rules could significantly disadvantage foreign companies interested in bidding for government procurement contracts worth an estimated $85 billion a year, Commerce Secretary Gary Locke said in a speech in Beijing on May 21.

“Indigenous innovation limits foreign direct investment and imports from abroad that can deliver new products and services to the Chinese people and enhance innovation within Chinese partner companies,” Locke said.

Locke brought with him 24 U.S. companies seeking to expand their presence in China, all involved in clean energy technologies or the storage and transmission of electricity.

The U.S. and China are the world’s two largest energy consumers and greenhouse gas emitters, Clinton noted in an op-ed in the Beijing-based newspaper Global Times. She said discussions at the Strategic and Economic Dialogue in Beijing would focus “on ways that our two countries can expand our cooperation on energy and climate change.”

To contact the reporter on this story: Nicole Gaouette in Shanghai at ngaouette@bloomberg.net.

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