China to ink $15 billion in trade deals with US
CHINA could sign up to 15 billion dollars in trade contracts with the United States as part of a buying spree ahead of Chinese President Hu Jintao's visit this month, state press reported Friday.
A Chinese trade delegation headed by Vice Premier Wu Yi that left for the United States on Monday has already signed four billion dollars worth of deals, the Chine Business News reported.
More contracts are expected to be signed in the lead up to and during Hu's visit, with potential airplane purchases from Boeing among the most significant.
Hu is expected to hold a summit with US President George Bush during an April 18-22 visit to the United States that will include a stop over in Seattle, where Boeing planes are manufactured.
Separate Chinese press reports said that Beijing was in talks to purchase up to 80 Boeing aircraft. It was not clear whether the purchases had been previously announced or were an entirely new order.
China signed a deal for 70 Boeing 737s worth four billion dollars during US President George W. Bush's visit to Beijing in November.
The buying spree is being seen as a bid by Beijing to placate US concerns over the huge US trade deficit with China, which last year hit a record 202 billion dollars, according to the US government.
Washington has maintained steady pressure on China in the lead up to Hu's visit on trade issues such as market access, intellectual property rights protection and Beijing's alleged efforts to keep its currency undervalued.
Wu's trade delegation, which includes about 200 Chinese businessmen representing 110 enterprises, has already signed 27 contracts, according to the China Business News.
They include a one-billion-dollar deal with auto-electronics maker Flextronics and a software contract worth 300 million dollars with Qualcomm Inc., the report said.
Other deals reportedly signed included one worth 560 million dollars with telecommunications giant Motorola and a 350-million- dollar contract with General Electrics for power equipment and other machinery.
Major US car manufacturers were also awarded purchase contracts including one worth 300 million dollars for General Motors and a 110-million- dollar deal with Ford Motor, the report said.
Meanwhile, India must exercise "great caution" in negotiating free-trade agreements (FTAs) with more developed neighbours, Finance Minister P. Chidambaram said in remarks published in Singapore Friday.
In an interview with Singapore's Straits Times, Chidambaram also said India was not yet prepared to consider a free-trade pact with China, preferring to allow trade volumes to grow first.
FTAs are necessary despite complaints from Indian industries about uneven playing fields but care should also be taken in assessing their overall impact, he stressed.
"We have to divide FTAs into two categories: One with our immediate neighbours' concerns as the the largest economy in the region," he said.
"And another will be how we treat FTAs with developed countries ... ASEAN, Japan, South Korea, Singapore. There we have to exercise great caution," he said.
Asked if India was prepared to consider a free-trade pact with China, he said: "I don't think we should jump from a situation where trade has picked up immediately to an FTA. Let trade improve."
Last month, Indian Commerce Minister Kamal Nath said China should overtake the United States as India's biggest trading partner in two years.
Chidambaram, commenting on ASEAN's poposal for a "meaningful" FTA with India, said this was under the commerce ministry but added that the matter was being "approached with great caution."
ASEAN is the Association of Southeast Asian Nations, a 10- member regional bloc boasting a combined market of more than 500 million people.
Chidambaram denied that India was dragging its feet on an application by Singapore banking giant DBS Group to expand its branch network in India, which was supposed to have been facilitated under a comprehensive economic agreement between the two nations.
On the other hand, State Bank of India, the country's biggest lender, and two other banks are awaiting approval from Singapore regulators to get qualifying full bank status in the city-state.
"When the three Indian banks are given full banking status and rights in Singapore, on the same day, the Reserve Bank of India will fulfill the reciprocal obligations that India has undertaken."