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China's Wu says country to seek domestic-led growth

Published 09/10/2009, 09:26 PM
Updated 09/10/2009, 09:30 PM

* China to shift growth patter away from exports

* Clinton stresses shared responsibilities

* Lawmakers question value of bilateral dialogue

By Paul Eckert, Asia Correspondent

WASHINGTON, Sept 10 (Reuters) - China will continue to boost domestic demand and seek growth driven more by consumption to play its part in bringing about global economic recovery, China's top lawmaker said on Thursday.

Wu Bangguo, chairman of the Standing Committee of the National People's Congress, said a joint China-U.S. response to the international financial crisis should be the priority project for the two countries.

"We should increase communication and coordination on macroeconomic and financial policies, and promote trade and investment liberalization and facilitation in earnest," he told an audience of business leaders in Washington.

China "will expedite the shift from investment- and export-driven economic growth to growth propelled by consumption, investment and export working in concert," he said.

U.S. and other Western leaders have been urging China to rely less on exports to fuel its economy and Beijing pledged to rebalance its growth model during high-level bilateral talks with the United States in Washington this summer.

Bubbling below the surface of the U.S.-China Strategic and Economic Dialogue, a bilateral forum the Obama administration and Beijing launched in July, was a set of U.S.-China trade spats, over tires and steel tubes.

Wu, formally the number two leader in China, did not directly address those trade disputes. But he said Beijing and Washington should "properly handle economic and trade frictions between the two sides."

The U.S. Commerce Department on Wednesday imposed preliminary duties ranging from 10.90 percent to 30.69 percent on $2.6 billion of steel pipe from China used to transport oil.

Meanwhile, President Barack Obama must decide by Sept. 17 whether to curb tire imports from China in response to petitions under a law that allows the United States and other WTO members to restrict imports from China in response to a surge that is harming or threatening to harm U.S. industry.

The Sept. 17 deadline comes one week before Obama will host other G20 country leaders for a summit in Pittsburgh aimed at reviving world economic growth and holding the line against trade protectionism.

Secretary of State Hillary Clinton, speaking before Wu addressed the U.S. Chamber of Commerce, also called for bilateral cooperation across a range of issues, from climate change, financial instability, and nuclear proliferation risks from North Korea and Iran .

"Our respective priorities and policies have a global impact and therefore we have a responsibility to ourselves and others to work as effectively as we can meet the threats and seize the opportunities of the 21st century," she said.

Obama, who will meet Chinese counterpart Hu Jintao at the G20 summit in Pittsburgh and visit China in November, has made improving ties with China a "central goal," Clinton said. (Additional reporting by Doug Palmer)

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