“Obviously the trade deficit needs to come down,” Locke told Reuters in an interview ahead of a high-level US-China Dialogue on economic and foreign policy concerns early next week in Beijing. “There are two components to it: more exports from the United States to China and more internal consumption within China so that they’re less reliant on exports,” Locke said.The former Washington state governor said he believed the turbulent economic events of the past several years, including most recently in Europe, has persuaded Chinese leaders they need to find a new model for economic growth. “They recognize that their economy cannot become so export dependent, especially with the crisis within the EU. That’s also a major destination for Chinese products,” he said.
The US trade deficit with China totaled $226.8 billion in 2009, down more than $40 billion from 2008 but still the largest the United States has with any country. The huge imbalance has fueled accusations in the US Congress and manufacturing sector that China is manipulating its currency for an unfair trade advantage by keeping the price of its yuan artificially low against the dollar. US officials have said those concerns will be on the agenda at the two-day US-China Strategic and Economic Dialogue meeting starting on Monday.
Locke, who is in Shanghai leading 24 US companies on a clean energy trade mission, declined further comment on the yuan, saying that was the jurisdiction of US Treasury Secretary Timothy Geithner. A primary purpose of the mission is to help meet President Barack Obama’s goal of doubling overall US exports within five years.
