SPEND MORE, BUSH TELLS CHINA CONSUMERS

6 September 2007 (TODAY)

SYDNEY - United States President George W Bush yesterday urged China's
consumers to spend more to help close a yawning trade gap with the US, as
he prepared to meet his Chinese counterpart Hu Jintao today.

While trade will likely top the agenda at the talks, the leaders are also
expected to include prickly issues such as exchange rates and reported
Chinese cyber-attacks on the Pentagon, reflecting a relationship Bush
termed "complex".

"We certainly hope that China changes from a saving society to a consuming
society," Mr Bush said, ahead of the Asia-Pacific Economic Cooperation
(Apec) forum.

"Right now, because of the lack of a (social) safety net, many Chinese
save for what we call a rainy day," Mr Bush said. "What we want is the
government to provide more of a safety net so they start buying more US
and Australian products."

Most American criticism of the surplus is focused on the value of China's
currency - said to be kept artificially low - but Mr Bush focused on
China's high savings rates ahead of his meeting with Mr Hu.

China's enormous trade surplus with the US is a regular bone of contention
in bilateral relations, with widespread American claims that jobs are
being lost to the massive Chinese exporting machine.

The gap with China, which has the lion's share of imports into the US,
expanded to a record US$21.2 billion ($32.3 billion) in June from US$20.02
billion in May, according to US official data. - AFP