By Michael Martina
BEIJING (Reuters) - A group of U.S. governors visiting China skirted national-level bilateral trade frictions on Wednesday and instead made their best pitches for Chinese investment they hope will spur their foundering economies back home.
Delegation leader and Washington state Governor Christine Gregoire, whose state's top trade partner is China despite the long border it shares with Canada, said a controversial U.S. bill targeting China's currency had taken a back seat.
"Actually, I am surprised that it didn't come up more in our conversation," she told Reuters on the sidelines of the second U.S.-China Governors Dialogue in Beijing.
Last week, the U.S. Senate approved a bill to pressure China to raise the value of its yuan against the dollar, which many U.S. lawmakers contend is undervalued by as much as 15 to 40 percent, giving Chinese companies a price advantage in international markets.
The bill is sitting in the House of Representatives, where Speaker John Boehner, the top Republican in Congress, has called the legislation "dangerous" because of its potential to start a trade war.
Beijing says the bill violates World Trade Organization rules and could spur a trade war that would jeopardize global economic recovery if it became law.
"There was a recognition that there are economic issues but that there is also a layer of politics that we are going to have to understand over the course of the next year, and not let politics interfere with what we are trying to create here," Gregoire said.
What they are trying to create are jobs -- American jobs.
The visit, which grew out of Chinese President Hu Jintao's visit to the United States in January, marked something of a reversal of decades-old dynamics, when Chinese delegations crossed the Pacific to sell their manufacturing capabilities.
U.S. lawmakers are wrangling over U.S. President Barack Obama's job bill, which was designed to ease stubborn unemployment figures and create an estimated 2 million jobs with a mixture of stimulus spending and tax cuts for the middle class and small businesses.
On Wednesday, Gregoire and the governors from Hawaii, Georgia, North Carolina and the U.S. territories of Guam and the Northern Mariana Islands, had the ears of their counterparts from Chinese provinces.
Gregoire said the United States needed to work harder to "dispel all of the misinformation" that Chinese investment was not welcome in the United States.
"We welcome those who want to do business, those who want to invest, and the people of China to come as tourists to our country. And we are going to do everything that we can in the months and years ahead to make that clear," she told the forum.
China's foreign direct investment, which involves buying or setting up businesses rather than simply investing in financial market assets such as U.S. Treasuries, has been growing at a phenomenal pace.
It jumped from $12 billion in 2005 to $57 billion in 2009, despite the global recession and financial crisis that year, according to a report from a Columbia University think tank.
Wednesday's talks let U.S. governors make their best pitches to Communist Party officials and governors from eight Chinese provinces.
"First of all, our home prices are very low, our cost of living likewise is very low," Georgia Governor Nathan Deal said, adding that creating jobs was his top priority in office.
"Our manufacturing labor costs are lower than those of most of our competitors, and the cost of utilities are also lower than most other states. Georgia is a right to work state, and labor union membership is extremely low," he said.
North Carolina Governor Bev Perdue made a hard sell on her state's educated work force, biotech industry and its tourism industry.
The Communist Party boss of the wealthy eastern province of Zhejiang, Zhao Hongzhu, requested U.S. technology that China needs and that American businesses have been hesitant to sell over security and intellectual property concerns.
"The products that the United States needs, so long as they are made in Zhejiang, we will sell them without hesitation. The products that we need, we hope that the United States will not hesitate to sell to us, especially in high-tech industries," he said.
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