U.S. Commerce Secretary Carlos Gutierrez on Monday called on China to open its markets to foreign goods and settle currency disputes, warning it could face protectionist sentiment in the United States if its record trade surplus keeps growing.
Gutierrez visited this industrial center in China's southwest en route to Beijing for talks ahead of a possible Senate vote this week on proposed sanctions to punish China for manipulating its currency.
In a speech to university students, Gutierrez said Washington wants to see China give foreign competitors the same market access that its companies enjoy abroad, to adopt a more flexible currency and to stop piracy of intellectual property.
"The trade deficit worries people, and we don't want it to become so big that what happens is that people who want to isolate the U.S. and who want to be protectionist may find a welcoming ear in the American people," Gutierrez said in the speech at Chongqing University.
The U.S trade deficit with China hit $202 billion last year, the highest amount ever recorded with a single country.
In an interview later, the secretary also called for more aggressive Chinese efforts to stamp out rampant product piracy, saying Washington isn't satisfied with progress in stopping illicit copying of movies, music and other goods.
"We want to see more results. We're not there," he said. "I don't think there are enough criminal prosecutions. I believe penalties are still on the light side."
China promised on Monday to tighten a crackdown on piracy and improve enforcement cooperation with foreign governments ahead of President Hu Jintao's trip to the United States.
The government shut down 17 production lines making pirated DVDs and CDs last year and six this year, said Yan Xiaohong, deputy commissioner of the National Copyright Administration of China.
"We are very tough in our measures," Yan said at a news conference. "Of course we need to speed up the process, but we can't expect that the problem will go away overnight," he said.
China is widely regarded as the world's top source of illegal copies of music, movies, software, designer clothes, medicines and other products despite repeated government crackdowns. U.S. officials contend unauthorized goods cost legitimate producers around the world billions of dollars a year in lost potential sales.
Gutierrez is due in Beijing this week for talks ahead of a U.S. Senate deadline of Friday to vote on a proposed bill to impose 27.5 percent tariffs on Chinese imports to the United States unless Beijing moves to resolve the currency dispute.
Supporters of the measure say they hope it will push Beijing to raise the value of its currency, the yuan, which some U.S. manufacturers say is up to 40 percent too low and gives Chinese an unfair price advantage at the expense of foreign competitors.
Chinese authorities set the yuan's value against a basket of world currencies and have allowed it to appreciate by only about 1 percent against the U.S. dollar since it was revalued last July.
President Bush's administration faces growing pressure from Congress to deal with a U.S trade deficit with China that hit a record $202 billion last year, a record with any country.
Chinese President Hu Jintao is due to visit the White House on April 20, and Chinese officials reportedly are preparing initiatives to ease tensions, including possible purchases of Boeing Co. aircraft.
Gutierrez began his trip to Chongqing with at the Chongqing Children's Welfare Institution. Donations from U.S. companies help support a program that provides reading, dancing and painting teachers.
Gutierrez said last week that he would be "very candid" about U.S. expectations in meetings with Chinese officials and said Washington expects Beijing to be a "responsible stakeholder" in the global economy.