U.S-China Deals Focus on Manufacturing

WASHINGTON (TheStreet) -- The $45 billion in trade deals between U.S. and Chinese firms, announced alongside President Hu Jintao's state visit to the nation's capital Wednesday, were aimed at easing economic tensions between the two superpowers.

President Obama and his counterpart held a joint news conference Wednesday afternoon to discuss U.S.- China trade. The conference is a precursor to a high-level summit this week that will attempt to tackle a slew of flash-point topics. On the business front, those issues include charges from U.S. government and corporate officials that China has kept its currency artificially low in an effort to erect barriers for the sale of U.S. goods into the world's most populous nation.

More than 70 agreements between U.S. and Chinese companies were announced Wednesday, deals that were prepared weeks in advance and horded up for the simultaneous data dump meant to coincide with Hu's state visit. A platoon of Fortune 500 chieftains also met with Hu at the White House on Wednesday, including executives of Boeing ( BA), General Electric ( GE) and Goldman Sachs ( GS).

Announcement of the deals was clearly meant to alleviate concerns over the widening trade gap between the world's biggest export economy and the world's most voracious consumer economy. But, taken in aggregate, the contracts also highlight a shift that U.S. companies hope to continue.

"A lot of the deals play to our country's strengths, which is high-end, sophisticated machinery," said William Reinsch, president of the National Foreign Trade Council, which represents U.S. corporate interests on global trade issues. "The largest share of our exports to China has always been agricultural products and raw materials. To the extent we can increase exports from the manufacturing sector, it's an important announcement."

Much of the $45 billion sum came from the headliner deal, Boeing's $19 billion pact to supply 200 jumbo jets to Chinese airlines. Another 70 contracts between U.S. and Chinese companies will generate about $25 billion in American exports, the White House said.

The deals focused to a great degree on clean energy and other green technologies. Cummins ( CMI) and a Chinese manufacturer will develop hybrid bus engines, for instance, which Cummins said could generate more than $500 million in annual sales. General Electric and China Shenhua Energy will form a joint venture to build coal-gas plants using GE equipment. CBS ( CBS) unit Westinghouse signed a contract to provide equipment for nuclear power plants in China. And Alcoa ( AA) agreed to collaborate with the state-owned electrical giant China Power Investment Corp. to develop "a broad range of aluminum and energy products" -- an investment it estimates at $7.5 billion.

American manufacturing blue-chips that have long sought to plumb Chinese markets were also on the list. Caterpillar ( CAT) said it will ship $1.4 billion in mining and construction equipment to China. The chemicals concern Celanese ( CE) will help build an ethanol plant in a deal valued at $815 million. And Peabody Energy ( BTU) said it signed an agreement with a Chinese partner to develop clean-coal power-generation technologies.

-- Written by Scott Eden in New York

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