Business

OVERNIGHT MONEY: US-China high-level talks begin

by Vicki Needham - 07/09/13 10:28 PM ET

A bipartisan group of trade-focused lawmakers told top Obama administration officials on Tuesday that they want commitments from Chinese leaders that they are willing to move forward.

House Ways and Means Committee Chairman Dave Camp (R-Mich.), panel ranking member Sandy Levin (D-Mich.), Senate Finance Committee Chairman Max Baucus (D-Mont.) and the committee’s top Republican, Rep. Orrin Hatch (Utah), sent a letter to U.S. officials calling for progress on major issues such as intellectual property protection and the undervalued Chinese currency.

{mosads}”We will be paying close attention to the outcomes of this year’s S&ED — and implementation of past outcomes — to determine the strength and seriousness of China’s commitment to reform and the resolution of U.S. trade concerns,” the lawmakers wrote.

They argue that while there has been some progress in certain areas, “China has failed to fully implement its past commitments” including better protection and enforcement of intellectual property, as well as a comprehensive software legalization program that applies to all levels of government.

The meetings with China’s new leadership presents “an important opportunity to address China’s barriers to U.S. trade and investment, encourage China’s efforts to rebalance its economy and establish a clear path to achieve market-based reforms,” they wrote.

On Tuesday, Sen. Sherrod Brown (D-Ohio) also wrote a letter urging the Obama administration to take the “opportunity to push China toward addressing these very serious challenges.”

“The numbers speak for themselves: American workers and companies can’t afford more talk with China without action,” Brown said.

“Congress should act on issues like currency manipulation and intellectual property theft, and we need to improve China’s capacity to tackle serious environmental problems,” he said.

China’s currency policies are a top irritant for lawmakers who have sought ways, including economic punishment, to pressure China to let the yuan’s value rise at a faster rate.

“China must stop intervening massively and in one direction in the foreign exchange markets, and move more rapidly toward allowing the renminbi exchange rate to be set by market forces,” the wrote.

Let the talks begin.

WHAT ELSE WE’RE WATCHING

Gimme a minute: On Wednesday, Fed watchers will await the rundown of minutes from the latest Federal Reserve meeting. Fed Chairman Ben Bernanke has suggested that the central bank could begin to taper its unprecedented economic stimulus in the coming months. After Friday’s jobs report, market analysts say they now expect the central bank to begin pulling back on its $85 billion in monthly bond purchases in September. We’ll see if there are any more hints in the report that can determine the Fed’s intentions.

Delay debate: A House Ways and Means subcommittee will take Wednesday to discuss the Obama administration’s decision to delay the employer mandate portion of the healthcare reform law for an entire year. The move has prompted congressional Republicans to push for a permanent delay of the much-maligned healthcare law and to question whether the White House can legally make the change to 2015. The hearing will feature health and legal experts, along with business leaders.

Spending bill momentum: A couple of House Appropriations subcommittees will take up two more fiscal 2014 spending measures on Wednesday. The financial services measure should get the most attention because it calls for slashing the IRS budget by $3 billion as punishment for its targeting of conservative groups seeking tax-exempt status. The proposed $9 billion allocation is also $4 billion below President Obama’s budget request.

Appropriators also will take up the $47.4 billion Commerce, Justice and Science bill that is $2.8 billion less than last year’s level and is nearly $5 billion below the Senate’s proposed level.

Conjuring capital: A House Financial Services subcommittee on Wednesday will explore ways that Congress can help businesses boost capital with a variety of experts.

Veterans for hire: The Joint Economic Committee will discuss on Wednesday ways to get veterans back into the workforce after they leave the military. The hearing will examine new employment trends for veterans in the private sector workforce and explore potential solutions for helping more returning service members find good jobs with of business and veterans groups.

Keeping track: The House Oversight and Government Reform Committee will chat with Comptroller General Gene Dodaro on Wednesday about several reports tracking how the federal government manages and keeps an eye on spending in its programs.

For sale: The Senate Agriculture Committee will take a look at China’s acquisition of Smithfield Foods with the company’s chief executive Larry Pope, among other experts.

A bipartisan group of senators has expressed a desire for greater oversight of Shuanghui International’s $4.7 billion takeover of the nation’s largest pork producer.

The lawmakers want the U.S. Department of Agriculture and the Food and Drug Administration to be involved with the vetting of the Chinese company’s acquisition of Virginia-based Smithfield.

“We need to take a look at this,” Sen. Debbie Stabenow (D-Mich.) said last month. “There’s serious implications — broad implications — because food security really is national security.”

ECONOMIC INDICATORS

MBA Mortgage Index: The Mortgage Bankers Association releases its weekly report on mortgage application volume.

Wholesale Inventories: The Commerce Department will release its May wholesale trade report that includes sales and inventory statistics from the second stage of the manufacturing process. The sales figures say close to nothing about personal consumption and therefore do not move the market.

WHAT YOU MIGHT HAVE MISSED

— Senate panel moves Labor, HHS bill with 25 percent higher funding than House

— Senate leaders remain wary on tax reform

— Acting IRS chief looks to cancel staff bonuses

— House to target IRS with series of bills

— Federal regulators propose leverage-ratio increases for big banks

— GOP lawmakers charge consumer watchdog with ‘veil of secrecy’

— Tax revenue up 14 percent this year, CBO says

— Small-business optimism falls slightly in June

— Treasury staffers brief House tax writers on derivatives

— GOP moves closer to splitting farm bill

— IMF lowers global economic growth forecasts