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The thlrd round ot 5mo-U5 textile negotiation has been launched sinceAugust 16.On the eve of the negotiation，China's Foreign Trade exclusively inter-viewed Bruce W. Blakeman， SpecialCounsel to the US Secretary ofCommerce.

When I say the trade relations be-tween China and America， it has prob-ably never been better. Bruce stated toChina's Foreign Trade.

Q.What do you think of the bilateraleconomic and trade relation betweenChina and America?

A When looking at the statistics ofAmerica's export to China and China'strade with America， they are both grow-ing very significantly. As a matter of fact，China is America's fastest growing ex-port market in the world， meaning it'smany times faster than any other mar-kets in the world. America's trade figureshows that in 2004 our export was justabout US$35billion， from America toChina. And now it has grown for 22%over 2003， and we've seen that 20% or30% growth of America's export toChina since China joined WTO. So thisis a very good market for America ex-porters and WTO Agreement. It is verygood for American businesses.

On the other side， WTO Agreementis very good for China. China's exportto America continues to grow. We takearound a quarter of all Chinese exportsto America， so America is a very goodmarket for China. When you look at therelationship overall， you see a lot of co-operation and a lot of mutual benefit， yousee trade is going in both ways， and yousee more and more investment goes inboth ways. Last year， Chinese companiesmade around US$3.5 billion of four in-vestments outside China. America gotUS$1 billion of that US$3.5. At the sametime， China got about US$60 billion toUS$65 billion of import a year， of whichabout 10% came from America. So it isa very significant investment movinginto Chinese market. So， overall， whenyou look at the trade growths， look atwhat is happening with the twoeconomies， China is the fastest growingdeveloping country in the world andAmerica by far is the fastest growingdeveloped and largest market in theworld， doth continue to grow very verystrong in relationship.

Q What kind of contributions hasthe US Commercial Service done to pro-mote the relations during the past years?

A Because China is such an impor-tant market， and the relationship betweenChina and America is so critical to bothour countries， over last 18 months， wehad five visits from Minister ofCommerce. Secretary Gutierrez， who hasonly been Minister of Commerce forseven months has visited China twice.That shows how important we feel theeconomic and trade relationship is forour senior leaders， and they had a dia-logue on mutual cooperation with theChinese council parts， and we found thatChinese government especially the se-nior government officials very acceptivewhen meeting with American officials.We meet with Premier Wen， Madam WuYi， Minister Bo Xilai， and so on fromChinese Ministry.

In last year we had two very success-ful meetings， that's called JCCT(JointCommission on Commerce and Trade).Madam Wu Yi chaired Chinese side andthe American side was jointly chaired bySecretary Gutierrez and also the US TR(US Trade Representative). In last twoyears we were to be operated byparticipation， both American side andChinese side see that this has provided agreat platform for us to discuss our mu-tual issues and to talk about any kind ofdisagreements we had in our tradedialogues， it is very successful， veryfruitful for the both sides. American sideis very appreciated of what Madam WuYi has done to chair Chinese side， shewas very cooperative in the dialogue.

The US Department of Commercealso signed an agreement with CCPITin July， according to which， in 14 dif-ferent Chinese cities across the country，CCPIT employees are going to workwith the US Commercial Service to helpAmerican businesses be successful inthose 14 different cities. So the CCPITwill do in cooperative with CommercialService in helping set up the meetingsfor American business people， set up theappointment for government official， setup appointment with business partners，helping us understand what the marketis like， helping us identify thedistributors， this is an opportunity forAmerican companies to participate incooperating in building the plan. InsideChina we are very excited about theagreement. We brought CCPIT repre-sentatives from these 14 towns toBeijing， and provided two-day training，we gave them computer， very nicebranded computer， to each office， sothey can work on our computers andhelp us do the process. So we are veryexcited about it.

Other things we do to assist the traderelationship are very focused on Ameri-can businesses. We have accounted thatin last year over 1000 Americanbusinesses， mainly small and medium-sized enterprises(SMEs) did trade andinvestment in China， or looking for op-portunities in the Chinese market. Welearned that 250 American enterprises arein difficulties and problems in the Chi-nese market and we would like to pro-vide assistance to them.

Another thing we have done in help-ing the trade relationship is we have donean Advocacy Program， according towhich we help American businesses putin tenders when the Chinese governmentis buying something， for instance， whenChinese airlines are buying airplanes， orwhen the Chinese government buysnuclear powers plans， they put out acourse of bids， we help American com-panies know the bids and help the Ameri-can businesses get in the door to be suc-cessful in the bids. Last year， we helpedsecure sales of over US$4 billion in con-tracts in China for American businessesthrough the program to double what wedid in 2003. So we work with the Chi-nese government and at the same timework with the American business andChinese businesses to help them partnerthe bilateral cooperation and mutualcooperation.

Q Will RMB appreciation affect thebilateral trade and narrow the tradedeficit?

A In reality， China wins huge tradesurplus with America， and that's growing.Nobody disagree that America's tradedeficit is big and getting bigger whenlooking at the Chinese statistics andAmerican statistics. In November of 2003，Premier Wen and President Bush sat downtogether to make an agreement for the wayto solve the problem. It's not for Americato limit the Chinese export but for Chinato import more American products. Sothat is the platform we are working on.Last year， according to Americanstatistics， China sold US$162 billion-more than America's sold to China. SoChina benefits dramatically from the tradedeficit. This year the trade deficit willprobably be US$200 billion. And accord-ing to the Chinese statistics which justcame out， it looks like over last 4 or 5years China was running US$25 billionto US$30 billion trade surplus for thegrowth globally.

Q The third round of textile nego-tiation will be started soon， are there anyspecial significance ?

A The revalue of RMB is somethingwe get that China has set the day theyneed to do that to manage the economybetter， they need to get the way from thepegged US dollars， so that is China's in-ternal decision that the Chinese leaderstalk about the long time and at the sametime the American provided a lot tech-nical experience and technical exporteesand highest market-based evaluation ofRMB.

China is still exporting 40%-more invalue textile goods to America in 2005than 2004 even for the safeguards， so themarket for China's export to Americawill continue to grow. And even the safe-guards doesn't stop China's export toAmerica but just capture the growth.China still sells more textile to Americain 2004 and in 2005 and even in thefuture.

This negotiation is to happen in SanFrancisco and is to come up with theagreement that we will allow China togo beyond the safeguard caps and couldthe safeguard set a 7.5% growth， andwhat the negotiation will do is that wewill look at what kind of growth we canexpect in the market place to providepredictability for both sides. So the Chi-nese exporters know what they are ableto export to America since now to 2008and the American purchasers can knowwhat they can reasonably expect to buy.We think we will have competition inSan Francisco and through the dialoguewe will have the predictability in themarket placethat. So we can plan for thenext few years. But I do want to stressthat China sells more and more textile toAmerica， it will be about 40% growth ofthis year. China will have 40%of all tex-tile export to America， compared to 2004and what we will try to do is manage themarket distruction in America for 2006，2007 and 2008， so we can provide pre-dictability in the market place and get inour safeguards.

Q What do you think of the signifi-cance of the Sino-America trade relations，both for China and for America?

A This is the most important eco-nomic relationship in the world， both forAmerica and for China. We believe thatwe operate in that way. We have goodeconomic and goods trade relations. Wewant to see more dialogue， morecooperation. Before China's entry toWTO， in 1995 our trade wasUS$57million in total， but last year， thathas been US$230 billion. So in the pastthree years， we saw a dramatic tradeincrease. China's economic is growingfor 9% a year， and has consistently grownin the past years. At the same time， therelationship was good for America，America's economic continued to growfor3% to 4%， it is a very strong and sig-nificant growth in the world. And bothsides have participated in the growth. Atthe same time， as China has opened mar-ket to American companies for direct in-vestment and for American exports， wesee America benefits from it. So are theChinese companies. There are 43000American investment companies inChina. That means more new jobs forChinese， more opportunities for Ameri-can companies to provide technology andexportees for Chinese economy， at thesame time， the American companies canbenefit from the exportees of thiseconomy. This is a very critical relation-ship for President Bush， for SecretaryGutierrez， etc.

Q For absorbing investments， whatadvantages does America boast? Is thereany preferential policies offering to Chi-nese investors?

A The American economy is one ofthe most opened economy in the world， ithas encouraged China to became the No.1 destination for investment over the last2 or 3 years. America is the No.1destination. Around US$50 to US$60 bil-lion we continue to have a year from for-eign companies and countries coming intoAmerica. Besides， China is the top of that，taking US$65 billion a year. We have seenChinese companies coming to America，for example， they have made a huge in-vestment in South Carolina， where theygot operations， distribution networks， andhave been very very successful. China buyAmerican companies， buy Americanexportees， buy American technology. Thatwill be very successful.

America is very different from Chinain how we attract foreign investment. USgovernment will do much work on attract-ing foreign companies， Each of the 50American states has an economic devel-opment office， some of American statesattract foreign investment very veryaggressively， they give foreign investmenttax payments， meaning that they don'thave to pay the property taxes for fiveyears， they also give training educationfor the workers， so the companies do nothave to pay for the training， the local uni-versities and colleges will provide com-puter training， machine training， so thecompanies do not have to take up thatexpense.

We have some other forms of assis-tance on helping them on how to operatetheir companies if they decide to move toparticular areas， for instance， mainly inmanufactury fields.

Q In what convenient ways Chinesecompanies could invest in or cooperatewith local companies?

A You have got to take a look of themarket. Much like China， America is abig market. We have got to think about alot of things， for instance， the No.1 iswhere is the market， in the east， west， orin the middle of the country? The No.2 isyou have got to think about the cost in aparticular market place to operate becausein different states have different taxpolicies， so you have to examine what isthe cost of the taxes according to theregulations. You also have to take a lookat the infrastructure， for instance， thecoastal ports where we ship a lot of goodsin from China.

The other thing is America is verytransparent， you can know the lawsvery well， you know exactly the pro-cess of getting business licenses with alot of assistance that the governmentwill give you， so you can know step 1，step 2， step 3， etc.， you will know whatkind of taxes you have to pay， so youknow exactly what they are， so you canplan it.

Q Do you have any suggestions forChinese government on how to promotethe bilateral economic and trade relationsand on how to encourage the investmentin China?

A The first I want to say is the im-provement in ability for American com-panies to do businesses in China sinceChina's entry into WTO. We'd like to seethat China will continue to open up itsmarket place， continue to provide accessto foreign investment so that Americancompanies can benefit from it. So weurge China to continue to move on in lib-eralizing its economy for every one'sbenefit.

Another point is we take to have istransparency. The predictability in trans-parency is very very critical.

Another issue we want is the Intel-lectual Property Rights protection. Chinahas gone a long way over the last years indeveloping a legal regiment， and courtsystem of prosecuting IRP violation. Sowe congratulate China for what they havedone. However， we even to talk with Chi-nese leaders that more improvements areneeded. At the same time， we expectChina to develop a better law enforcementand spend more money on the lawenforcement.

Another advice I also want to give isChinese government should continuetheir fight against corruption. I thinkChina should be proud in fighting againstcorruption and against people who areinvolved in corruption. I hope that Chinacan continue to move on that way.