China Eases Trade Rules, Allows US Fund Sales Today at 4:54 am
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China Eases Trade Rules, Allows US Fund Sales
Published: Tuesday, 10 May 2011 | 6:32 PM ET
China on Tuesday pledged easier access for U.S. companies to key sectors of its economy by removing barriers to its huge market in government contracts and offering a foothold to U.S. mutual funds.
The pledges were made in two days of talks between the world's two biggest economies which ended with both sides hailing progress in their often tense relationship.
"We are seeing very promising shifts in the direction of Chinese economic policy,'' U.S. Treasury Secretary Timothy Geithner said, though he repeated that China needs to let its yuan currency rise more rapidly.
Top officials on both sides of the once-a-year Strategic and Economic Dialogue, though, wanted to emphasize progress.
U.S. Secretary of State Hillary Clinton said they had dealt with an array of issues.
"We discussed everything, whether it was something that was sensitive to us or sensitive to them, all these difficult issues including human rights,'' she said.
A senior Chinese finance official said the talks were a ''win-win'' for both countries. Still, Vice Finance Minister Zhu Guangyao said that while the two sides agree the yuan needs to strengthen, Beijing will move at its own speed.
In a big step forward for U.S. firms seeking more access to China's financial services market, China agreed to let U.S. and other foreign banks sell mutual funds in China and provide custodial services, a U.S. official said.
Where the Growth Is
Geoff Bobroff, a consultant to the U.S. fund industry, said U.S.-based funds hope China's rising middle class will want to invest with established asset managers. China "is clearly where the growth is going to be,'' he said.
The U.S. official also indicated Beijing would look favorably on letting U.S. and other foreign insurance companies sell auto insurance in China for the first time, a potentially significant opportunity in what is expected to be the world's largest car market.
U.S. and European companies have long complained about the difficulty accessing Chinese markets for a broad array of products and services. China's government procurement policies, in particular, have been a focus, with foreign firms arguing Beijing gave preference to Chinese firms as part of an effort to try to spur technological innovation.
During the talks, China hardened a pledge made in January on its "indigenous innovation'' policies, stating explicitly that it extended to purchases by local governments — not only the central government.
Beijing previously said it would consider foreign companies with operations in China as eligible for government contracts, but many U.S. firms saw that as a bid to make them turn over technology in order to compete.
Looking for Business
The U.S. business community welcomed the commitment.
"China's commitments have the potential to bolster the confidence of American investors and exporters,'' said Myron Brilliant, senior vice president at the U.S Chamber of Commerce.
A U.S. official said there had been detailed talks on China's yuan currency and a recognition by China that a stronger yuan was needed to tamp down surging inflation.
However, Geithner made clear the United States was not yet satisfied with the speed at which Beijing was letting its currency appreciate and the U.S. Treasury said the yuan ''remains substantially undervalued.''
"We hope that China moves to allow the exchange rate to appreciate more rapidly and more broadly against the currencies of all its trading partner,'' Geithner said at a closing news conference.
One U.S. commentator was skeptical about China's commitment to open up to U.S. mutual funds.
"They let you in the market under conditions where you cannot be a real competitor,'' Derek Scissors of the conservative Heritage Foundation said. "That's what they've done every single time, so that's what I expect will happen with mutual funds.''
http://www.cnbc.com/id/42980515
panhead
Just4Dinar Member
Posts: 1827
Reputation Points: 391
Join date: 2010-05-31
Location: Coastal Carolina
China Eases Trade Rules, Allows US Fund Sales
Published: Tuesday, 10 May 2011 | 6:32 PM ET
China on Tuesday pledged easier access for U.S. companies to key sectors of its economy by removing barriers to its huge market in government contracts and offering a foothold to U.S. mutual funds.
The pledges were made in two days of talks between the world's two biggest economies which ended with both sides hailing progress in their often tense relationship.
"We are seeing very promising shifts in the direction of Chinese economic policy,'' U.S. Treasury Secretary Timothy Geithner said, though he repeated that China needs to let its yuan currency rise more rapidly.
Top officials on both sides of the once-a-year Strategic and Economic Dialogue, though, wanted to emphasize progress.
U.S. Secretary of State Hillary Clinton said they had dealt with an array of issues.
"We discussed everything, whether it was something that was sensitive to us or sensitive to them, all these difficult issues including human rights,'' she said.
A senior Chinese finance official said the talks were a ''win-win'' for both countries. Still, Vice Finance Minister Zhu Guangyao said that while the two sides agree the yuan needs to strengthen, Beijing will move at its own speed.
In a big step forward for U.S. firms seeking more access to China's financial services market, China agreed to let U.S. and other foreign banks sell mutual funds in China and provide custodial services, a U.S. official said.
Where the Growth Is
Geoff Bobroff, a consultant to the U.S. fund industry, said U.S.-based funds hope China's rising middle class will want to invest with established asset managers. China "is clearly where the growth is going to be,'' he said.
The U.S. official also indicated Beijing would look favorably on letting U.S. and other foreign insurance companies sell auto insurance in China for the first time, a potentially significant opportunity in what is expected to be the world's largest car market.
U.S. and European companies have long complained about the difficulty accessing Chinese markets for a broad array of products and services. China's government procurement policies, in particular, have been a focus, with foreign firms arguing Beijing gave preference to Chinese firms as part of an effort to try to spur technological innovation.
During the talks, China hardened a pledge made in January on its "indigenous innovation'' policies, stating explicitly that it extended to purchases by local governments — not only the central government.
Beijing previously said it would consider foreign companies with operations in China as eligible for government contracts, but many U.S. firms saw that as a bid to make them turn over technology in order to compete.
Looking for Business
The U.S. business community welcomed the commitment.
"China's commitments have the potential to bolster the confidence of American investors and exporters,'' said Myron Brilliant, senior vice president at the U.S Chamber of Commerce.
A U.S. official said there had been detailed talks on China's yuan currency and a recognition by China that a stronger yuan was needed to tamp down surging inflation.
However, Geithner made clear the United States was not yet satisfied with the speed at which Beijing was letting its currency appreciate and the U.S. Treasury said the yuan ''remains substantially undervalued.''
"We hope that China moves to allow the exchange rate to appreciate more rapidly and more broadly against the currencies of all its trading partner,'' Geithner said at a closing news conference.
One U.S. commentator was skeptical about China's commitment to open up to U.S. mutual funds.
"They let you in the market under conditions where you cannot be a real competitor,'' Derek Scissors of the conservative Heritage Foundation said. "That's what they've done every single time, so that's what I expect will happen with mutual funds.''
http://www.cnbc.com/id/42980515