Baptism of fire awaits Jack Lew in China

The US Treasury Secretary has a list of difficult issues to address as he arrives in Beijing for his first foreign trip

Jack Lew, America's new Treasury Secretary, has a long record of dealing with domestic economic affairs, having been the budget point-man for both presidents Barack Obama and Bill Clinton. But compared to his recent predecessors in the job, he is a newbie on the world stage. Tim Geithner was a Treasury Undersecretary for International Affairs in the second Clintonadministration, while Hank Paulson, as chief executive of Goldman Sachs, visited China about 70 times before being appointed by George Bush in 2006.

Luckily for Mr Lew, who will be in China today for his first foreign trip as the president's top economic adviser, he arrives just as a new set of leaders assumes the reins of the world's second-largest economy.

He has been at the US Treasury since late February, while Xi Jinping and Li Keqiang formally took over their new posts as China's president and premier last week. The same is true of the country's new finance minister, Lou Jiwei.

"They have a new government that's in place now. We have many new people in our government," Mr Lew said last week. "It's important we engage immediately on a broad range of issues."

He is likely to more specific in his meetings, which conclude tomorrow.Here is a summary of the key issues:

American businesses, particularly in the technology sector, have long complained of losing out on valuable revenues because of piracy and the rampant flouting of copyright norms in China.

Last year, the issue came to the fore in the US presidential election, when the Republican candidate, Mitt Romney, accused the country of stealing the work of American companies.

"There's even a counterfeit Apple store in China selling counterfeit goods," he said in October.

In December, Chinese trade negotiators assured their US counterparts that the country would do more to protect intellectual property of foreign companies and thus foster a level playing field inside its country.

Mr Lew is expected to bring up the concerns again, as he also seeks greater market access for US companies.

The topic has already come up with the new leadership, with President Obama raising the issue during a congratulatory phone call to his new Chinese counterpart, Xi Jinping, last week.

Almost exactly a month ago, a private security firm in the US released a detailed report on the recent spate of cyber attacks on American businesses and media organisations, linking the apparent attempts at digital espionage to an arm of the Chinese military.

While Beijing has consistently denied any link, the US National Security advisor, Tom Donilon, officially pointed the finger of blame at China last week, when he said: "Increasingly, US businesses are speaking out about their serious concerns about sophisticated, targeted theft of confidential business information and proprietary technologies through cyber intrusions emanating from China."

Given its national security and economic implications, the issue of cyber espionage is thus expected to be at the top of Mr Lew's agenda, as he seeks assurances from the new leaders that they will crack down on the attacks.

But recent comments from Beijing don't augur well for Mr Lew. Li Keqiang, the new Chinese premier, has already batted away the accusations, saying: "I think we should not make groundless accusations against each other."

In the past, the US has been vocal about its concern that China was keeping the value of the yuan artificially low to benefit its companies in the international marketplace, hitting American industry and jobs.

While the issue is likely to come up in Mr Lew's meetings – during his Senate confirmation hearings, he said that China's exchange rate would be among his top priorities – tensions have eased recently as the yuan has appreciated.

Over the last two to three years, China's exchange rate has climbed by about 16 per cent against the US dollar, while China's global-trade surplus has dropped. And although imports from China hit a record level last year, the volume of goods travelling the other direction also climbed.

Moreover, the US Treasury chief risks being criticized by the other side if he puts too much emphasis on the value of the Chinese currency, as many countries blame the loose monetary policy regime within the US for keeping a lid on the value of the dollar.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate