Little to show for two days of talks between U.S. and China

It is not surprising that no land- mark agreements came out of two days of high-level talks in Washington between the United States and China.

For one thing, it wasn’t advertised as an exercise designed to solve any long-standing disagreements, but more of a session at which each side would define or redefine its position.

For another, while the United States may have invented baseball, the Chinese in recent years have shown themselves to be better at playing economic and trade hardball.

And while the Silicon Valley has been taking a beating from intellectual-property thieves in China (where even state-owned companies have routinely run their offices on pirated software), the Mahoning Valley should worry about what’s coming next.

Connect these dots:

China has long been developing a model that requires foreign companies to enter into joint ventures for domestic production of consumer goods, rather than importing products, and is now aggressively requiring foreign makers of electric cars, nuclear power, high-speed rail and green energy to transfer their technology to their Chinese “partners.”

U.S. automakers have been enjoying relatively modest sales of their products in China — even some imported products such as 2,550 Cadillacs sold in April. But still, China complained recently that support from the U.S. federal government and the state of Michigan to U.S. car makers might constitute a violation of international trade regulations and could be viewed as “dumping” of U.S. products on the Chinese market. This veiled threat comes from a country that exported $15 billion more in goods to the United States in April than it imported from the U.S. And, yes, that was billion with a “B.”

Victor Muller, chairman of Saab Automobile AB, the Swedish automaker, said recently that a Chinese automaker could be selling cars in the United States and Europe priced as low as $10,000 in two or three years using an existing dealership system — such as that owned by SAAB. SAAB, incidentally, is eager to attract outside investors as it struggles to get back into production after shutting down in April because it couldn’t pay its suppliers.

While China complains about other countries subsidizing production, it has a stable of state-owned companies and it is unabashedly using restrictions on trade and investment to nurture what it calls “national champion” companies

The game plan

A picture emerges of a country that is aiming for supremacy — at whatever the cost and without apology. Steal intellectual property from the unwilling or extort it from the more compliant. Exploit the fact that virtually every company in the West is afraid of being shut out of the Chinese market, and that most are willing to give up their seed corn in exchange for short-term profits. Complain about other countries providing marginal assistance to their industries, while demanding that your state-owned companies have unfettered access to open markets. Manipulate the currency market to keep your currency low (and the cost of your exports cheap). And invest some of those hundreds of billions of dollars received through unbalanced trade with the United States in U.S. Treasury notes, then lecture the Americans on their lack of fiscal discipline.

Under the circumstances perhaps we should be elated that a few modest agreements were reached to increase sales opportunities for U.S. companies in China — including a promise that state-owned companies will stop running their computers on bootlegged copies of Microsoft Office.

We suspect they’ll make up for that concession by prying new technology out of “partners” like GE and Boeing that will some day be used by China to build its own aircraft to compete with Boeing and Airbus .