The fourth Sino-US Strategic Economic Dialogue (SED) will be held today and tomorrow in Annapolis, Maryland, in the US. As usual, a large purchasing team organized by the Chinese government has followed the Chinese delegation to the US bent on a spending spree among US commodities dealers among others. The throwing around of Chinese cash in pursuit of domestic products suits the US down to the ground.
 Unfortunately, that same attitude does not hold with Chinese investment.
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Yesterday at the US Chamber of Commerce, Chinese and American enterprises signed 35 agreements and contracts on trade and investment cooperation, totaling $8.36 billion, in 11 areas, including plane engines, machines, telecoms and network equipment, semiconductors and electronic components. Chinese Vice Premier Wang Qishan and Commerce Minister Chen Deming attended the contract signing ceremony.
　　
The Chinese team plans to carry out a series of trade and investment promotions in 11 states and 14 cities during its stay in the US, and is expected to sign over 70 purchasing and investment contracts adding up to more than $13.6 billion. Over 200 people, mostly officials from the Chinese government and companies and from American companies such as GM, IBM and Motorola, attended yesterday’s signing ceremony.
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Changes have occurred in the attitude of US business towards China’s rapid economic development. Ten years ago, the business mainstream, ranging from import and export companies to manufacturing and agriculture, scrambled to develop trade relationships with China, and beseeched the government to grant China most favored nation status. In recent years, however, as the US has suffered a deepening trade deficit and an economic slowdown, a growing call for protection is being heard from export companies and small and medium-sized companies, among others.
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It is true that many US states yet regard China more as an opportunity than a threat. The Chinese delegation signed 32 sourcing contracts in St. Louis, Missouri, involving soybeans from seven states in the US Midwest, energy-saving products and telecoms equipment. The soybean contract is worth $3 billion. Missouri’s soybean production ranks fifth in the US. In 2007, China imported $100 million worth of soybeans from the state, and naturally Missouri values its trade relationship with China.
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Sino-US trade exceeded $300 billion in 2007, and the US investment in China reached nearly $60 billion. China’s direct investment in the US is a pittance, by the end of June, 2007, totaling only $1.036 billion. Yet when China Investment Corporation, China’s sovereign wealth fund, seeks to acquire assets on Wall Street, political alarms and sirens go off.
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Commerce Secretary Gutierrez declared repeatedly that the US warmly welcomes Chinese investment, and that the US government was preparing a series of promotion projects for Chinese investors in ten cities to introduce direct investment opportunities in the service industry, especially hotels, and other areas such as technology, manufacturing and consumption goods. The financial industry, in which China is particularly interested, is not included.