Ross Presses China to Level Playing Field for U.S. Businesses -- Update

By Natasha Khan Features Dow Jones Newswires

U.S. Commerce Secretary Wilbur Ross said he pressed China during his visit to Beijing this week to level a "lopsided" playing field for American companies there.

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Mr. Ross was in Beijing to pave the way for a meeting between U.S. President Donald Trump and Chinese President Xi Jinping, expected in November, when Mr. Ross will also lead a trade delegation to China.

He told a media briefing in Hong Kong on Wednesday that he is optimistic about talks between the leaders of the world's two biggest economies, though neither side had signaled any concessions on the thorny issues dividing them.

Topping the U.S. agenda, Mr. Ross said, is market access for American companies. The U.S. will push China to lower protectionist barriers and improve protection of intellectual property, he said, especially as China is gunning to become a more powerful technology player.

"We do need major change, and I hope that we made it clear because the relationship is too lopsided at the moment," Mr. Ross said.

In Beijing meetings with senior officials, including Premier Li Keqiang, Mr. Ross stressed the need to rebalance bilateral trade, protect intellectual property, lower tariffs and guarantee free and reciprocal investment, according to a Commerce Department statement, which said the U.S. would act to defend its workers and businesses if cooperative efforts don't bear fruit.

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But the U.S. is also looking for smaller, more concrete gains to announce at Mr. Trump's visit in November, and Chinese companies gave a different account of Mr. Ross' trip.

Beijing-based tech company Cheetah Mobile Inc. said it was invited to a meal with Mr. Ross this week to discuss deeper investment in the U.S., along with other Chinese companies from different sectors.

"The meeting focused on the circumstances for innovation tech companies investing in the U.S., the problems they face in the investment process, and how the U.S. government can help," said Cheetah Mobile in a statement.

The U.S. government has also asked American companies to submit China deals they can announce in November as part of the trade mission, with projected dollar value, said industry executives who had received the request.

The U.S. Embassy in Beijing didn't immediate reply to a request for comment on Mr. Ross's meeting with Chinese companies and the request to U.S. companies.

Beijing's push for self-sufficiency in high-technology sectors by 2025 is understandable, Mr. Ross said, noting that China is the world's largest importer of semiconductors.

"If the way they get there is through fair and open playing fields, we are fine with that," he said. "We would not be comfortable if it was achieved through disrespect for intellectual-property rights, through forced localization and forced tech transfer."

Tensions between the two economic powers were highlighted earlier this month when Mr. Trump rejected a Beijing-backed fund's attempt to acquire a U.S. semiconductor company, saying that the $1.3 billion transaction could have risked U.S. national security.

Asked at the daily Chinese Foreign Ministry briefing on Tuesday about Mr. Ross's call for fair, reciprocal treatment of U.S. companies in China, a ministry spokesman said only that "quite good" talks were held during the commerce secretary's visit, and that "economic and trading ties between China and the U.S. are mutually beneficial."

Beijing wants Washington to lift controls on sales of high-tech products to China, Chinese Vice Finance Minister Zhu Guangyao said in recent remarks reported by the official Xinhua News Agency.

What the U.S. is seeking from the meetings later this year are "specific things" to reduce the U.S. trade deficit with China, Mr. Ross said. He added that if the U.S. resolved the trade deficit with China along with the one in the automotive sector, the U.S. "wouldn't have a trade deficit at all."

"We need to move the needle on trade," Mr. Ross said, stressing that he doesn't "want to give the impression we made any concessions on the trip. We did not. Nor did the Chinese."

Still, he said he is "really optimistic" that the good personal relationship between Messrs. Trump and Xi will make for smoother negotiations. The two met in Florida in April.

"The very fact that the two presidents are meeting again, this time in Beijing, is an important fact and important development in and of itself, " Mr. Ross said.

--Chao Deng, Yang Jie and Eva Dou in Beijing contributed to this article.

Write to Natasha Khan at natasha.khan@wsj.com

(END) Dow Jones Newswires

September 27, 2017 10:02 ET (14:02 GMT)