China plans purchase of $12bn in US agricultural and industrial goods

Although details have yet to be finalised, the buying mission is to be led by Ma Xiuhong, a vice-minister of commerce, and take in the cities of Atlanta, Chicago, San Francisco and Washington. Chinese businesses are expected to announce the purchase of $12bn in US agricultural and industrial goods as a result. Read original article

High-profile buying missions, from Japan and more recently China, have become a feature of trade diplomacy in Asian countries that run large surpluses with the US.

Its short-term impact will be complemented by potentially more significant changes that Beijing is due to announce about reductions in export subsidies and tax rebates.

Wang Xinpei, a commerce ministry spokesman, said this week: “To improve China’s growth model, the commerce ministry is studying China’s export structure, the adjustment of export tax rebate for some products, including steel, and policies aimed to increase imports.”

A “detailed plan” would come out soon, Mr Wang said.

Such changes would affect trade with Europe, which also has a large and growing deficit with China.

China, mindful that its trade surplus is likely to continue to rise this year, has warned that the measures will take some time to have an impact.

On top of further cuts in the steel sector, its government is expected to announce reductions to export rebates for textiles and chemical fibres, the Chinese media reported on Friday.

The anticipation by Chinese industry of such cuts helped propel the trade surplus to a record high of $46bn in the January quarter, double the amount for the same period last year.

China exported 14.1m tonnes of steel products in the first three months of this year, up 118.4 per cent from a year earlier, driven both by overproduction at home and good prices offshore.

Bilateral tensions have risen in recent months as the US has filed successive complaints against China in the World Trade Organisation concerning piracy and subsidies.