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US and China agree on trade deals worth $45 billion

The world's two leading economic powers have announced they signed trade agreements valued at $45 billion during meetings in Washington. Despite lingering tensions, China and the US said the agreements would lead to a new era in cooperation.

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AFP- The United States and China have announced a raft of trade deals worth $45 billion, as the two powers tried to narrow disputes by tethering their economic fortunes.

Lauding 70 trade agreements with exporters in 12 US states, presidents Barack Obama and Hu Jintao edged away from the fevered rhetoric of recent months to stress mutual dependency, despite lingering tensions.

Obama expressed hope that relations could be recast, setting aside "old stereotypes" and allowing US firms to more easily benefit from China's breakneck development.

"I absolutely believe that China's peaceful rise is good for the world, and it's good for America," Obama insisted Wednesday.

Obama -- facing domestic suspicions that China has ridden roughshod over trade rules and US manufacturers -- stressed the package, worth $45 billion dollars to US exporters, would support 235,000 US jobs.

But he also insisted on a "level playing field" for US companies, referring to disputes that have often bubbled to the surface as China's economic clout has grown.

Obama also renewed calls for the yuan to strengthen faster against the dollar -- a move that could curb artificially low prices for Chinese exports.

Hu stopped well short of supporting that call, stating simply that China would focus more on domestic-led growth.

Later Chinese deputy foreign minister Cui Tiankai said Beijing's currency policy had "not been substantially changed" during the meeting, pointing to a continued policy of gradual and cautious appreciation.

But faced with a far-reaching power shift between the two countries and an uneasy rivalry, Obama and Hu chose to focus on deals rather than divisions, including a massive order for 200 Boeing aircraft worth an estimated $19 billion dollars.

While foreign leaders frequently bring a fistful of trade agreements on trips to the White House, the scope of Wednesday's deals were seen as evidence of the rapidly deepening business links between the United States and its emerging rival.

"It's par for the course, but it is very important given the political context between China and the United States," said Yukon Huang, an Asia expert with the Carnegie Endowment for International Peace, commenting on the deals.

"The trade imbalance and frictions in terms of jobs and market access are the biggest concerns for both sides right now. Both sides are trying to stress the common ground."

Chinese businesses have descended on the United States to coincide with Hu's visit, inking agreements with US titans Alcoa, General Electric, Honeywell, Westinghouse and Caterpillar among others.

The deals span sectors as diverse as agriculture, gasification, railways and hybrid buses.

"These will inject fresh momentum into our bilateral cooperation," Hu said.

The meeting did however touch on US complaints that China does not adequately protect copyright and unfairly discriminates against foreign firms in competitions for lucrative government contracts.

Obama said the leaders had made some toward resolving each of those issues.

Hu was said to have agreed to make it easier for US firms to tap procurement contracts issued outside the central government, a market worth more than $88 billion dollars each year.

"I welcomed his commitment that American companies will not be discriminated against," Obama said, referring to the Chinese leader.

Obama also welcomed promises to curb the theft of intellectual property.

According to Carnegie's Huang, Hu's promises were a "positive step," but implementation will be closely watched after several false starts.

"Whether (the promise) is substantive depends on how the tone permeates through the bureaucracies on both sides," he said.

China's Cui meanwhile indicated Hu and Obama had discussed Beijing's massive holdings US debt, which have become more controversial amid growing fears that US debt levels are unsustainable.

"The issue of the safety of Chinese assets in the United States has been repeatedly been discussed between leaders and competent departments, but that does to mean it is a pressing or major issue," he said.
 

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