U.S. Department of the Treasury

(Archived Content)

HP-419 

The SED is a management tool for the U.S.-China economic relationship, not merely a biannual event. Under the SED, interaction between the U.S. and China is frequent and ongoing. Progress will occur and be announced throughout the year, such as the following actions by the Chinese Government which occurred between the first and second meetings of the SED:

• Transparency and accountability: In April, China's State Council issued new regulations to promote government transparency. This is an important priority for the U.S. business community.
• Protecting private property: In March, China's National People's Congress approved landmark legislation to protect property rights. This legislation is an unprecedented, significant step towards China becoming a market economy and the development of legal rights.
• Market access: The conversion of bank branches to subsidiaries under foreign bank regulations has been a smooth and quick process. In March, four banks had their applications approved, including one U.S. bank, Citibank. In April, these banks began accepting RMB deposits, a first in decades. In December 2006, Citibank purchased a 20 percent stake in Guangdong Development Bank.
• Construction and engineering services: In March, China issued implementing regulations that relaxed residency requirements, allowing regulators to recognize the foreign qualifications of license applications of technical experts.
• Reducing export subsidies: In March, China agreed to terminate the subsidy that allowed major Chinese exporters to receive discounted loans not available to other companies.
• Reduction of Value-Added Tax Rebates: In April, China announced the reduction of export tax rebates on textile and apparel products, the elimination of the VAT on some chemical and steel exports, and a reduction of the VAT rebate to 5 percent on higher-value steel.
• Tax rebates for imports: In April, China announced tax rebates on imported components for advanced equipment. These rebates apply to imports by 16 industries, including large power-generating plants and transmission equipment.
• Energy Security: In April, officials from China's National Reform and Development Council (NDRC) visited the national renewal energy lab in Colorado and the Strategic Petroleum Reserve in Texas as they continue to develop their strategic petroleum reserves and engage in international cooperation.
• Reducing Tariffs: China announced on May 21, effective June 1, that it will raise export taxes on 142 goods and cut import tariffs on 209 goods to rein in its trade surplus, improve energy efficiency, and promote domestic consumption, effective June 1.