China on U.S. spending spree

Chinese officials hoping to ease trade tensions before President Hu Jintao's upcoming visit to Washington, D.C., kicked off a coast-to-coast buying spree Thursday in Los Angeles that will include $15 billion in orders for U.S. software, airplanes, electronics goods, auto parts, farm goods and other products.

Although the new bookings will benefit many big names in industry, analysts were quick to express their skepticism about the Chinese trade mission. They characterized the supersize shopping extravaganza — the largest for a Chinese trade mission — as a not-so-subtle effort by Beijing to win over Americans without addressing the significant issues of the ballooning U.S.-China trade imbalance, piracy of U.S. goods and Chinese currency policy.

Even business groups warned that any gains from China's commercial diplomacy would be short-lived unless they were accompanied by concrete action on issues such as stronger intellectual-property protection.

Analysts said China's efforts also could backfire because the timing of the deals was so clearly intended to smooth the way for Hu's April 20 summit meeting with President Bush. Hu will also stop in Seattle on April 18 and 19, where he plans to tour Microsoft's campus and Boeing's Everett plant.

A trade delegation of more than 200 Chinese entrepreneurs, led by Vice Premier Wu Yi, was in Los Angeles on Thursday as part of a 13-state visit. Wu attended a ceremony at which Chinese personal-computer makers TCL Group and Tsinghua Tongfang signed agreements to buy copies of Microsoft's Windows operating system.

The deals are intended to promote the paid use of software in China, which has the third-highest piracy rate of any country at 90 percent, according to a 2004 survey from the Business Software Alliance, based in Washington, D.C.

Tsinghua Tongfang, the No. 3 PC maker in China, will buy Windows licenses worth $120 million in the next three years, while TCL will buy $60 million worth, they said.

The Chinese also announced deals Thursday representing more than $4 billion in purchases from Texas Instruments and IBM.

China's state-run media reported that Beijing would also purchase as many as 80 737s from Boeing. Linda Lee, a Boeing spokeswoman, said the company does not comment on pending orders.

But Richard Aboulafia, an aerospace analyst with Teal Group, said those airplanes were part of an order for 150 next-generation 737s announced last fall by the Chinese government.

As of January, the Chinese had yet to purchase 80 of those planes, which have a list price of $4 billion to $6 billion.

Information from Bloomberg News is included in this report.