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Friday, December 08, 2006
Official: U.S., China trade tensions may escalate
HONG KONG (Reuters) - The United States sees potentially escalating trade friction with China next year as Beijing is stepping up restrictions on foreign investment and recent U.S. Congressional elections create uncertainty, a U.S. trade official said on Friday.

"There's potential next year for greater friction in the trade relationship," Franklin Lavin, U.S. Under Secretary of Commerce for International Trade, said during a visit to Hong Kong.

Lavin said the United States' record trade deficit with China was not in itself a problem, but barriers to market access for U.S. companies in China were.

China in the past two years had become much more ambivalent about the role of foreign direct investment in its economy and was becoming more selective and not always willing to let market forces work, Lavin said. Meanwhile, piracy remained widespread in China and a number of items were still subject to high tariffs.
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