Chinese Leader Visits Boeing Plant

EVERETT, Wash. – Chinese President Hu Jintao called Wednesday for fewer trade barriers and closer ties between his country and the United States, while defending China's heavily criticized policies on trade, currency and energy.

The meaty speech followed a warm welcome at Boeing Co.(BA), where Hu sought to soothe tensions over the U.S.-China trade deficit, telling workers his country would need thousands of new airplanes in the coming years.

Speaking to an audience of Washington state business and political leaders including Microsoft Corp. (MSFT) Chairman Bill Gates, Hu said his country does not seek a big trade surplus with the U.S. He also reaffirmed his government's commitment to crack down on software piracy, which should increase Microsoft's sales in China.

"Strong business ties meet the fundamental interests of our two countries and peoples and will continue to play an important role in stabilizing our relations," Hu said through a translator. He flew to Washington D.C. shortly after the speech.

China's rapid growth and development will increase demand for American products and expertise in areas such as technology, Hu said, and "I hope the American businesses will seize the opportunities."

The comments came just ahead of a summit with President Bush, where the two sides plan to tackle thorny issues including trade.

Visiting Boeing's widebody jet assembly plant earlier, he called his country's long-running relationship with Boeing an example of the potential of China-U.S. trade.

"Boeing's cooperation with China is a living example of the mutually beneficial cooperation and win-win outcome that China and the United States have achieved from trade with each other," Hu said.

He estimated that demand for new aircraft in China will reach 2,000 planes in the next 15 years.

Hu's speech at the company's massive Everett plant came just days after Chinese officials confirmed a commitment to order 80 Boeing 737 jets, in a deal valued at $5.2 billion at list prices. The order has yet to be finalized, and airlines typically negotiate discounts.

The Boeing deal is one of several purchases the Chinese have announced recently as officials try to ease tensions over the massive trade gap between the U.S. and China.

Hu's meeting Thursday with Bush will cover a broad agenda, from China's much-criticized currency and other trade policies, to its aggressive search for oil and its positions on the developing nuclear programs in Iran and North Korea.

At his lunchtime speech, Hu touched on several of those issues, defending Chinese currency and energy policy but acknowledging that there have been bumps in the road.

"Given the rapid growth, sheer size and wide scope of our business ties, it is hardly avoidable that some problems have occurred," Hu said. "However, mutually beneficial cooperation and common development remain the defining feature of our business relations."

Hu said China takes its trade imbalance with the U.S. seriously, and noted that his country has trade deficits with Japan, Korea and some southeast Asian countries.

Hu promised that China will take a firm stance protecting intellectual property. He also said his country has already taken some steps to loosen currency regulation and promote financial reforms, in apparent response to U.S. criticism.

The Chinese president said the two countries should address trade issues through formal dialogue.

"Trade issues should not be politicized," he said.

But Hu said strengthening China-U.S. ties will require both sides to continue promoting global free trade and economic development.

He said opportunities included nuclear energy, natural gas, energy conservation and new forms of environmentally friendly energy.

Despite the political tensions expected in Washington, Hu has received a warm and curious welcome during his visits to Boeing and, on Tuesday, Microsoft. The thousands of Boeing workers, some of whom waited hours for a 10-minute speech Wednesday, appeared eager for a glimpse of Hu.

"China is one of the largest markets for Boeing," said Craig Thompson, an engineer at the Everett plant. "The guy's coming here. I'm going to listen to what he has to say."

Hu began his day Wednesday visiting at his hotel with China scholars and academics, including former Secretary of State Henry Kissinger, former National Security Adviser Brent Scowcroft and former Defense Secretary William J. Perry.

On Tuesday, Hu toured Microsoft's suburban Redmond campus and dined at company chairman Bill Gates' home. Hu said he admired what Gates had achieved.