Economics, Trade, and the Hu Jintao Visit

Q1: What economic and trade outcomes are likely from the upcoming visit of President Hu Jintao of China?

A1: The Obama administration completed a round of the U.S.-China Joint Commission on Commerce and Trade in December. The outcomes from that exercise (see http://www.export.gov/china/policyadd/JCCT_outcomes.asp) were largely designed to clear at least some of the path on economic matters so that President Hu’s visit was not so complicated by trade frictions. But the overwhelming public attention to the putative connection between trade with China and U.S. joblessness makes ignorance of these issues politically perilous for the administration. Part of Chinese messaging will be directed at highlighting the positive contribution China makes to U.S. economic stability, so (according to advance reports) Hu Jintao will tour a Chinese-invested auto parts plant and a joint U.S.-China clean energy project while in Chicago. In advance of the trip, a series of Chinese business delegations has and will come through the United States to scout investment and trade opportunities, again with a targeted message that the U.S.-China economic relationship is not completely about a $250-billion trade deficit.

The incoming class of congressmen and women are somewhat restive on Chinese trade issues, particularly the currency matter. A strong statement from the Obama administration and assurances from President Hu are the minimum necessary to keep Congress from taking matters into its own hands.

Charles W. Freeman III holds the Freeman Chair in China Studies at the
Center for Strategic and International Studies in Washington, D.C.

Critical Questions
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Charles Freeman
Senior Adviser (Non-resident), Freeman Chair in China Studies