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US Treasury Secretary Henry Paulson has named a new deputy specifically to oversee strategic talks with China and will further establish a telephone hot line between himself and Vice Premier Wu Yi.

These announcements were made on Tuesday following US reports that it had suffered a record trade deficit of US$232.5 billion with China last year. The matching figure from the Chinese customs was US$144.27 billion.

Alan Holmer, a pharmaceutical company executive and a former trade official under President Ronald Reagan, was named Paulson's deputy.

Beijing and Washington are set to hold the second round of their strategic dialogue in May, following the first meeting held in Beijing last December.

Paulson announced it was too early to predict the results of the May meeting but that the US Congress was urgently anticipating results.  

Chinese experts see Washington's blame game with China over the trade gap as unfair. According to customs statistics, China has become the US' fastest growing export market. For example, China now annually purchases a quarter of all US cotton exports and one-third of its soybean exports. Another major coup came last year when China further signed contracts for 80 Boeing aircraft, a deal valued at US$6 billion.

In a positive sign of easing trade relations, US President George W. Bush reportedly eased conditions for technology exports from Honeywell International Inc and Boeing Co to China, certifying that these "will not measurably improve the missile or space launch capabilities of the People's Republic of China."

Earlier this week, certifications were issued for 20 Honeywell model QA 750 accelerometers, set to update the Ministry of Railways' track geometry measurement systems, and for equipment and technology linked to the production and testing of composite components for Boeing commercial aircraft.

Both companies were unavailable for comment although the move is set to bolster US high-tech exports to China, widely considered a major reason for the trade imbalance.

China, the fastest growing economy in the world, is in need of high-tech products but faces obstructionist US export control policies.

When compared to other global trade partners, from 2001 to 2005, China's high-tech imports from the EU and Japan leapt 71 percent and 151 percent respectively, while US imports lingered at only 38 percent.

(China Daily February 15, 2007)