U.S. and Chinese officials conclude two days of talks in Washington Wednesday, after Treasury Secretary Henry Paulson Tuesday urged China to expedite economic reforms while Beijing warned the U.S. about politicizing economic issues.
CNBC.com continues its live coverage, starting with closing statements at 11 a.m. EDT. (See complete coverage below)
“Our policy disagreements are not about the direction of change but about the pace of change,” Paulson said in an opening statement Tuesday. In an interview with CNBC before talks began Treasury Secretary Henry Paulson called the Chinese currency a "symbol of reform." He added that "it’s important that the Chinese accelerate the flexibility, the base of appreciation.”
The U.S. is also pushing for greater access for its financial services firms and more foreign investment. The Chinese are expected to announce that they are cutting tariffs on energy services and some technologies. The Bush administration also hopes to expand opportunities for U.S. airlines.
Meanwhile, Chinese Vice Premier Wu Yi said Beijing “firmly opposes trade protectionism," adding that any attempt to pressure China “can only make the situation more complex.”
In recent moves ahead of the talks, China reduced duties on some imports and raised the amount its currency can appreciate.
The currency issue is closely tied to trade tensions between the two countries. U.S. manufacturers say China’s yuan is undervalued by as much as 40%, making U.S. goods significantly more costly in China, and Chinese exports artificially cheap. As a result, the U.S. has been running an enormous trade deficit with China. In the first-quarter alone, the gap was $57 billion. In 2006, it hit a record $232.5 billion.
On the other hand, China has been making strategic investments in the U.S. for years and American firms actively court its capital. China, for instance, is set to acquire a $3 billion stake in the Blackstone Group, a move the private equity firm's CEO called good for the U.S. economy.
Since previous talks in December, the U.S. filed two complaints with the World Trade Organization against Chinese copyright piracy and barriers to U.S. music, movies and books. In March, the U.S imposed duties on Chinese imports for the first time in more than two decades.
Go to CNBC.com for this live coverage:Wednesday:
11 a.m. EDT- Joint Closing Statements
11:45 a.m. EDT - U.S. Delegation News Conference