Tag Archives: Wu Yi

Dialogue And Departures

A couple of notes ahead of the U.S.-China chinwag later this week that goes under the rubric of the two countries’ biannual Strategic Economic Dialogue.

The first is that this looks likely to be the last of these meetings for Vice Premier Wu Yi. China’s most powerful woman is due to retire shortly. At 68 she was not reelected to the Central Committee in October. Stepping down from government posts follows as night follows day.

Wu was a proponent of the policy of depoliticizing economic disputes and had been in charge of both the contentious trade talks with the U.S. and with cleaning up the product-safety scandals. She also struck a good working relationship with her U.S. counterpart in these meetings, U.S. Treasury Secretary Hank Paulson.

Paulson, too, could be gone within the year following the 2008 presidential elections in the U.S. Which brings me to the second note: China may be waiting for a change of administration in Washington before doing anything serious about revaluing the yuan, a topic that again is likely to be high on the agenda at this week’s talks.

Nicholas Lardy of Peterson Institute for International Economics raises the point that the Chinese expect the next U.S president to be a Democrat. With the Democrats already controlling a Congress unfriendly to Beijing, Washington is likely to become more hostile to China after the election. So the plan would be to hold back from making an more reforms — or concessions depending on your point of view — and to keep them in Beijing’s back pocket until the tenor of the new regime in Washington is clear.

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Peeved Peter, Icy Yi

Peter Mandelson, the E.U.’s Trade Commissioner, touched a couple of raw nerves in his speech at the opening of a two-day international food-safety forum in Beijing on Monday: product safety and counterfeiting, saying that China, can’t solve the problems of the former without dealing with the latter first.

Mandelson said about half of the 1,000 product safety violations registered last year by the E.U.’s monitoring system were for non-food products made in China, a number that looks set to rise by 50% this year. Eight out of 10 fake products — including medicines — seized at Europe’s borders are made in Chin, he says.

He also brushed aside China’s progress on product safety issues, saying “Some Chinese officials pointed out that less than 1% of China’s exports to Europe had alleged health risks. But Europe imports half a billion euros worth of goods from China every day, so even 1% is not acceptable”.

Mandelson’s words got any icy reception from Vice Premier Wu Yi, who is heading up China’s task force on product safety and declared hereself “dissatisfied” by the speech.

Mandelson is known for not mincing his words but his speech reflects the frustration in Brussels over the E.U.’s growing range of issues with China beyond product safety, including a ballooning trade deficit, restrictions on access to the Chinese market for European firms and the slow pace of revaluation of the yuan against the euro.

With the regular China-E.U. meeting due to be held in Beijing on Wednesday, the tone is starting to sound a lot like the discussions between China and the U.S. — by no means a wholesome turn of events.

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