China agrees to $45B trade investment, policy changes

By Howard Schneider

China has agreed to $45 billion in trade and investment contracts with U.S. companies and has made a series of other trade-related concessions as part of Chinese President Hu Jintao's visit, a senior administration official said Wednesday.

The agreements, which come as Hu and President Obama prepare to speak with American business leaders in Washington on Wednesday, include the purchase of 200 Boeing aircraft and contracts with a broad range of manufacturing, agriculture and technology companies, the official said. The ventures include a broad strategic cooperation agreement between Honeywell and Chinese congolomerate Haier, and the development of a hybrid bus by Cummins Engine Co. and Zhengzhou Yutong Bus Company

The official, who spoke on condition of anonymity because the deals have not, said the deals are estimated to support some 235,000 U.S. jobs.

In addition to the deals, China has agreed to a series of policy changes that respond to some of the central concerns that U.S.companies have expressed about the business climate in China, the official said. They include an agreement to perform and publish audits to confirm government agencies at all levels are purchasing legal software. U.S. companies have complained about widespread software piracy in China, and to Beijing officials recently promised to tackle the problem and said they had budgeted money throughout the government to pay for software licenses

China also said it would allow the use of more imported technology and give foreign companies a more even playing field to compete for government contracts at both the national and provincial levels.

The official said the steps addressed some core concerns of the U.S. business community, and presented a "major opportunity" to boost U.S. exports to China. It is also, he said, a sign China is moving on its promise to rebalance its trade relations with the rest of the world and the U.S. in particular. China runs a large trade deficit with the U.S., and has accumulated nearly $3 trillion in foreign reserves through its exports.

"We view this as a major opportunity and these contracts as a step in that direction," the official said.

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