U.S. puts the heat on China

WASHINGTON — In advance of sending a high-level U.S. delegation to Beijing, the Bush administration on Friday said China must move faster on reforms addressing America's soaring trade deficit or run the risk of a protectionist backlash.

Treasury Secretary Henry Paulson said the message of the U.S. team will be that China must make quicker progress in economic reforms such as boosting the value of its currency and tearing down barriers to foreign trade.

The administration is pursuing those goals to deal with a U.S. trade deficit expected to top $780 billion this year, with the trade gap with China accounting for over $200 billion of that amount.

Paulson is leading a team that includes Federal Reserve Chairman Ben Bernanke and Cabinet secretaries from the departments of Commerce, Labor, Energy, Health and Human Services as well as the head of the Environmental Protection Agency and U.S. Trade Representative Susan Schwab.

The delegation will meet with Chinese counterparts for two days of discussions Dec. 14-15, capped off with meetings with Chinese President Hu Jintao and Premier Wen Jinbao, under a new process dubbed the Strategic Economic Dialogue. The hope on the American side is to win support from the highest levels of the Chinese government that the country must:

—Move faster on reforming its currency system.

—Crack down on piracy of American goods.

—Tear down barriers that keep U.S. farm products and other exports out of the Chinese market and make it difficult for U.S. banks and other service firms to do business in China.

"A big part of the dialogue is to persuade the Chinese to accelerate the pace of their reform," Paulson said in an interview Friday on CNBC. "The case we are making to them is that there's more risk in going too slow than in going too fast."

Paulson said that because of the growing size of China's economy, the U.S. and other countries believe China must do more to lower its trade surpluses.

"They're a global economic leader and the rest of the world isn't going to give them a lot more time," Paulson said, citing rising protectionist pressures in many countries.

Paulson's comments came on a day when the Bush administration previewed a report it will send to Congress next week that contends China is failing to live up to a number of the market-opening commitments it made when it joined the World Trade Organization five years ago.