Economy main game for China | The World | The Australian

HU Jintao will arrive in the US this week armed with answers to the inevitable irritating American questions about myriad issues from human rights to the rapid rise in the Chinese military budget.
But the President will attempt to drag every conversation back to what the Chinese Government sees as the core of the relationship.

It is the same focus that Premier Wen Jiabao brought to Australia a fortnight ago: it's the economy, stupid.

For Beijing, maintaining a smooth flow of inward investment, steadily increasing its exports and beckoning ever more Chinese into the consumer society are crucial priorities.

This economic preoccupation is reflected in Hu's program.

After four days in the US - the same time as Wen spent in Australia - the Chinese President will travel to Saudi Arabia, Morocco, Nigeria and Kenya.

China is focused on gaining reliable access to secure sources of the energy and other resources it needs to keep driving its great industrial machine.

Saudi Arabia and Nigeria are key oil and gas producers, and 20 per cent of Morocco's exports are minerals, especially phosphate.

Kenya remains an influential player in Africa, where China's engagements are growing daily, as they are in Latin America - in both cases slowly but relentlessly supplanting the dominant role once played by a US now utterly distracted by troubles in the Middle East.

The arrival of Hu has been framed, handily for the Chinese, by news that the US trade deficit with China - a talismanic figure for US protectionists - shrank in February from $US17.9 billion ($24.6billion) to $US13.8 billion ($19 billion).

This was substantially due to the disruption of Chinese New Year, but the result will still do nicely for Hu.

China used its annual trade talks with the US, on the eve of the visit, to announce it would lift a ban on American beef imports put in place in 2003 to keep out mad cow disease, and to herald the signing of 107 contracts with US firms for $US16.2 billion in American exports, including communications equipment, software and automotive parts.

The purchase of 80 next-generation Boeing 737 aircraft alone is worth $US4.6 billion.

The contracts were finalised during a US tour of about 200 Chinese businesspeople led by Vice-Premier Wu Yi, the most senior woman in the administration and a former trade minister.

Wu said at the conclusion of her visit, trawling across the country, that "the atmosphere in these states is absolutely different to the atmosphere here in Washington, and I think it better represents the willingness of Americans to work with China".

And China's urbane Commerce Minister, Bo Xilai, also doing his bit to help frame the Hu visit, said last Tuesday that the pattern of industrial production had changed in Asia.

Today, most countries send components to China for assembly and export.

He said that, as a result, "the US trade deficit with Japan and South Korea has transferred to China to a large extent".

The overall American deficit with Asia has not changed massively, but it has shifted within Asia to China, which accounted last year for 26 per cent of the US's trade deficit.

It is not hard for Hu to make the case that globalisation is having its biggest impact not on American but on Chinese jobs, with 100 million workers or would-be workers on the move at any one time during the convulsive transition towards a modern economy there, scrabbling to find ways to survive in a tough state whose minimal welfare services are mostly user-pays.

Beyond the economy, Hu's chief goal will be to score some points on Taiwan.

At the weekend, he was using as his main ally the recently retired head of Taiwan's Kuomintang (Nationalist) Party, Lien Chan, who was given red-carpet treatment during his third visit to China within a year.

In welcoming Lien to Beijing, Hu called for talks between China and Taiwan as soon as possible to maintain peace in the region.

Throughout his speech yesterday, Hu stressed the importance of peace between the mainland and the self-ruled island Beijing claims as its own and has threatened to retake by force if it formally declares independence.

Lien, a rather pedestrian political figure naturally described as "a statesman" by the Chinese official press, is aiding the process on which Beijing has been relentlessly engaged since Chen Shui-bian was elected as President of Taiwan for the first time in 2000 - marginalising Chen internationally as an extremist hell-bent on formalising Taiwan's independence.

Any supportive words from US President