James Moore, former Assistant Secretary of Commerce, told CNBC’s “Squawk Box” that trade talks with China earlier this week have produced “modest” results.
“We were able to increase flights for both passengers and cargo between the United States and China, and there have been some modest returns from all this,” Moore said Friday. “The problem is there is so much more to do – everything from the valuation of the currency to dealing with intellectual property rights and dealing with subsidiaries wholly owned by United States securities firms.”
He said China’s economy is expanding rapidly but the United States “continues to be the engine for economic growth worldwide.” Nevertheless, the economies are becoming more intertwined, creating future opportunities and risks.
“China’s economy is expanding at such a rate that there is absolutely no question – it’s not a matter of if, but when – there’s going to be a burst in the bubble and what happens in China is going to affect the global marketplace,” said Moore, now a professor of International Business at Georgetown University.
Earlier this week, the United States and China announced agreements to increase flights to China and make it easier for American financial companies to enter China, but made no progress on Chinese currency reforms.
U.S. Treasury Secretary Henry Paulson said the talks had produced “tangible results” while China Vice Premier Wu Yi said relations between the two nations were “complicated” and required careful handling in the future.
In an interview with CNBC earlier this week, Paulson said, “We obviously need some concrete progress. The dialog is about long-term structural changes managing the relationship on a long-term basis. You can agree on principles and set the priorities, but then it’s very important to have some sign-posts along the way.”
Erin Ennis, Vice President of U.S.-China Business Council, said on-going discussions are in themselves a sign of progress.
“The most important aspect of this dialog is to continue to talk about these issues and move them forward,” Ennis said Friday. “That’s really important in a time when we have run out the road map that China’s accession to the World Trade Organization laid out. We’re now into new territory and trying to convince the Chinese to continue to open up that market.”
She said some in both the U.S. and China favor protectionism over free trade.
“The Chinese authorities are dealing with the same questions that U.S. authorities are,” Ennis said.