Evans defended the policies of the Bush Administration with respect to China as he noted that, despite "sustained and intense domestic pressure to criticize China" during the months leading up to the presidential elections, President Bush refused to "allow domestic political tensions to threaten the vitality of the deepening spirit of cooperation between our countries." Evans highlighted the importance of IPR protection of US products and copyrights in China and, while he openly expressed his optimism about recent developments in this area, he also asked the Chinese government to tighten IPR enforcement in months to come. Evans acknowledged that China is eager to complete its transition to a free-market economy but reminded his audience that "countries aspiring to be treated as market economies must end government intervention and allow market forces to drive their economies." The US currently considers China to be a non-market economy in the context of AD investigations. This designation requires the DOC to assume a rebuttable presumption that all Chinese companies are under governmental control. As a result, Chinese exporters are typically assigned a single country-wide AD rate, which is often so high that it makes continued exports to the US virtually impossible.

Evans noted that US companies are particularly concerned with the effect that China's fixed exchange rate policy has on fair competition and conveyed the opinion of the Administration that exchange rates determined by market forces are "the key to a well-functioning financial system." In addition, he criticised a prevalent practice whereby state-owned banks extend loans to failing state-owned enterprises. He also spoke briefly on several other issues, including: (i) the potentially negative impact that the forthcoming direct selling regulations will have on China's recent liberalisation of distribution services; (ii) the need for transparent, open, and competitive procurement decisions by Chinese officials; and (iii) the need for a stronger and more transparent rule of law in China.

IPR issues were discussed in more depth at the China-US IPR Roundtable held on 13 January. Chinese Vice Premier Wu Yi observed that there has been constant progress and advancement of IPR protection in China over the past several years and summarised some of the most recent developments in this area in his remarks to the Roundtable:

• The State Council has established an IPR Protection Working Group (PWG) tasked with leading and coordinating IPR protection work throughout China. Among other things, the PWG has taken steps to enhance communication between different departments and has made arrangements to enhance training and publicity for IPR issues nationwide.
• The State Council launched a campaign for IPR protection from September 2004 to August 2005 under the auspices of the PWG. During October-November 2004, the PWG sent six teams to twelve different provinces in China, namely Hebei, Shanxi, Zhejiang, Fujian, Shandong, Henan, Hunan, Guangdong, Sichuan, Yunnan, Gansu, and Ningxia, for "focused supervision and inspection." Within two months of the launch of the campaign, authorities throughout the country investigated more than 9,800 trademark infringement cases, confiscated over ten million infringing trademarks, and forfeited and destroyed over ten million infringing commodities.
• The Supreme People's Court of China has issued a revised judicial interpretation designed to make it easier to prosecute those accused of violating IPR laws. The new interpretation specifies the criteria for conviction and sentencing and considerably lowers the threshold for the application of criminal penalties, from 100,000-200,000 yuan to 50,000 yuan with respect to the total value of the illegal business and from 50,000 yuan to 30,000 yuan with respect to the total amount of illegal gains.
• The Chinese government has established fluid communication channels with the US, the EU, and other countries to resolve outstanding IPR issues. These channels include the JCCT and the China-EU IPR Dialogue.

Wu reiterated that the Chinese government places special emphasis on IPR protection and enforcement and expressed its commitment to resolve any outstanding issues. Wu also asked the US government and business interests to be patient because, as he put it, a full-fledged IPR protection system cannot be developed overnight in a country of "1.3 billion people where the economic and scientific development level is not high at the current stage."

Evans also had the opportunity to exchange views with China's Minister of Commerce Bo Xilai during his visit. Bo stressed his concern over the twelve safeguard petitions filed against Chinese-origin textile and apparel products last year. Bo acknowledged China's growing trade deficit with the US but contended that the deficit was not as large as reported by the US Census Bureau due to a "big difference" in the way trade statistics are calculated by each side. Finally, he highlighted China's efforts to push ahead with domestic market reform initiatives but advised that China "would obviously not rebuild its economy in accordance with the standards for market economy status set by a certain country itself," in obvious reference to the US.?/font>