January 19, 2011
Obama and Hu Open Summit, Strike $45 Billion in Deals
The United States and China unveiled $45 billion in export deals on Wednesday as Presidents Barack Obama and Hu Jintao sought to paper over deep rifts about trade, currencies and security
Amid the pomp of a state visit, Obama and Hu vowed to seek common ground as they launched talks aimed at easing the strains of the past year over North Korea, economic imbalances, human rights, Taiwan, Tibet and a host of other issues.
The agreements included China's final approval of a $19 billion contract to buy 200 Boeing [BA 71.70 -0.77 (-1.06%) ] aircraft for delivery between 2011 and 2013, which U.S. officials estimated would support 100,000 American jobs.
Other deals involved Honeywell, Caterpillar, and Westinghouse Electric, a unit of Japan's Toshiba.
In an afternoon press conference with the Chinese leader, President Obama said he believed the United States could both collaborate and compete with the nation's second largest economy.
"As we look to the future, what's needed I believe is a spirit of cooperation that is also friendly competition," Obama said. "That's the kind of relationship I see for the United States and China in the twenty-first century and that's the kind of relationship that we advanced today."
Obama also held to prior statements that the Chinese currency remains competitively undervalued.
"I told President Hu we welcomed China's increasing the flexibility of its currency, but I also had to say that the renminbi remains undervalued, that there needs to be further adjustment in the exchange rate," Obama said. "This can be a powerful tool for China boosting domestic demand and lessening the inflationary pressures in their economy."
Earlier Wednesday, Chinese officials told the Obama administration that Chinese companies had signed 70 contracts worth $25 billion in U.S. exports from 12 states, U.S. officials said.
Altogether, the Boeing and other deals will support an estimated 235,000 American jobs, they said.
The deals appeared at least partly intended to answer U.S. criticism that China does not play by the rules as it amasses economic power and uses a number of policies to maintain a large trade surplus with the United States.
Although China is one of the fastest-growing export markets for the United States, that is overshadowed by imports from China which reached an estimated $370 billion in 2010.
The U.S. trade deficit with China was an estimated $275 billion last year, which would be a new record.
The senior U.S. official, who briefed reporters on condition of anonymity, said there was also progress on several key areas on trade, including intellectual property, indigenous innovation and government procurement.
The $19 billion order for Boeing would be larger than a $15.6 billion deal for Airbus to sell 180 planes to Indian budget carrier IndiGo. That deal, announced on Jan. 11, was touted as the biggest jet order in aviation history.
"So they've trumped Airbus," said Alex Hamilton, managing director of EarlyBirdCapital.
"Obviously there is a huge pent-up demand in China ... This order highlights not only that but it also highlights the health of the overall cycle on the heels of the Airbus order."
Wednesday, January 19, 2011
Obama and Hu Open Summit, Strike $45 Billion in Deals ...
