Evans sees need for China to work on copyright, exchange rate

Asian Economic News, Jan 18, 2005

BEIJING, Jan. 13 Kyodo

U.S. Commerce Secretary Donald Evans urged China on Thursday to ensure a ''level playing field'' in trade, saying he still sees room for work in the areas of intellectual property rights and the exchange rate mechanism.

Evans, in Beijing for talks with Chinese officials, said China's work on commitments to toughen up on copyright violations and piracy is ''well under way'' but emphasized that the United States will be focusing not on the process but on results. ''Results are what matters,'' Evans said.

China, where sales of pirated goods ranging from software to clothing are rampant, faces complaints not only from the United States but also from Europe and Japan seeking strengthened protection of intellectual property rights in the country.

Evans also renewed Washington's call for China to unshackle the yuan's tight peg against the dollar.

''We continue to talk about the importance of China moving to a flexible exchange rate,'' he said.

''We happen to believe that economies around the world perform best when there is free trade, when there is a free flow of capital and free market forces determine exchange rates,'' he said.

China linked the yuan's rate to the dollar in 1994. That peg has remained at around 8.28 to the dollar since the 1997-1998 Asian financial crisis.

U.S. politicians and companies argue the current arrangement keeps the yuan undervalued, giving Chinese exporters an unfair advantage.

Evans called an increase in trade between the United States and China ''a great progress,'' despite the huge U.S. trade deficit with the country, saying that problem can be tackled by ensuring the ''level playing field for trading partners.''

The U.S. merchandise trade deficit with China is about to hit a record high for the second consecutive year in 2004. The latest official data show the deficit is already at $131 billion in the January-October period, topping the record-high $124 billion marked in 2003.