Envoy-to-be Gary Locke aims to rebalance U.S.-China trade

Reuters News
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Posted: May 26, 2011 4:09 PM
Envoy-to-be Gary Locke aims to rebalance U.S.-China trade

By Paul Eckert

WASHINGTON (Reuters) - Commerce Secretary Gary Locke, tapped to be the next U.S. envoy to China, vowed on Thursday to win more access to Chinese markets, press for a flexible yuan currency and push for more action against counterfeiting of American products.

Locke told the U.S. Senate Foreign Relations Committee he would also raise concerns about China's human rights record and convince the Chinese to be more helpful in curbing the nuclear ambitions of North Korea and Iran.

A former governor of Washington state and lawyer long involved in trade with China, Locke has played a key role in the Obama administration's efforts to cut a trade deficit with that fast-growing economic power that now looks on pace to exceed last year's record of $273 billion.

"The commercial relationship between our nations stands at a crossroads, a relationship that can no longer be characterized by China making and the United States taking," he said in a prepared statement to the committee.

China must follow through on commitments to protect intellectual property, stop using government procurement policies to force foreign companies to transfer technology and to make its regulations more transparent, Locke said.

"Rebalancing our economic relationship will require the type of market opening that the implementation of these commitments will bring," he told senators.

Locke, nominated by President Barack Obama in March, made his remarks during a confirmation hearing before the committee, which is expected to support Locke. The full Senate is then expected to confirm him.

If confirmed, Locke would become the first Chinese-American to serve in the critical post of U.S. ambassador to China, where his parents were born.

He would replace John Huntsman, a former governor of Utah who may run for the 2012 Republican presidential nomination to face Obama, a Democrat.

'FLOAT MORE AND FASTER'

A key element of U.S.-China economic rebalancing, under which the United States reduces consumption and debt and China boosts consumption and reduces its reliance on exports, is getting Beijing to stop suppressing the yuan and allow its currency to reflect market value, Locke said.

"We are seeing movement on the currency," he said, referring to a roughly 5 percent increase since China slightly loosened the yuan peg to the dollar in June 2010.

"We believe it should float more and faster," Locke said.

Locke said he would also pursue other American goals, including deepening military-to-military relations with China and trying to get Beijing to improve its human rights record after disappearances and arrests of activists, artists and lawyers since last year.

"The administration is troubled -- and I am troubled -- by the well-documented deterioration of the human rights environment in China," he said.

Both Democratic and Republican senators urged Locke to push China to help rein in the nuclear ambitions of North Korea and Iran. China has supported U.N. nonproliferation sanctions against North Korea and Iran but Chinese firms have been sanctioned for illicit trade with them.

"We need to convey to the Chinese people and to the leaders of China that it's also in their national security interest to avoid proliferation of weapons of mass destruction and nuclear capability of both North Korea and Iran," Locke said.

The risks to international peace and security outweigh "whatever commercial benefits some of their companies may obtain by continuing to sell or transfer technology to North Korea or Iran," he told the hearing.

(Editing by Will Dunham)