President Hu just concluded his state visit with President Obama in Washington, DC as of this writing. Considering his first visit came prior to the global economic crisis, it is worth noting a few comparisons.
In 2006, Hu was invited by President George W. Bush for a non-state-designated lunch at the White House. The US-China trade deficit ran 234 billion USD that year, and China’s economy grew at around 11%. Hu reaffirmed a promise to lead a more consumer-driven economy, but made no concession on currency revaluation of a quasi-pegged CNY (then 8.02 per USD).
Yet CNY slowly appreciated. And China’s promised domestic demand developed. When the global crisis struck, domestic consumption helped China recover quickly.
This year Hu was welcomed back to a fully designated state dinner, complete with all the formality of a global political dialogue. Over the past 4 years, the two nations’ annual trade deficit has increased a relatively modest 8%, to 252 billion USD, though China’s GDP still grew close to 10%. China’s booming consumer-driven economy and strengthened currency (now 6.59 CNY per USD) suggest steady progress for both nations.
Obama quipped to Hu that the US still wants “to sell you all kinds of stuff”. And though obstacles continue to stand in the way of free trade, economic indicators point up.
For commentary on trade developments with China, please read through this month’s Economy, Feature Story on protectionism, Press Reviews and Legal Assistance columns.
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