CNN 2011-01-24

CARL AZUZ, CNN STUDENT NEWS ANCHOR: It is Friday, and it is awesome 1! Thank you for rounding out your week with CNN Student News. From the CNN Center in Atlanta, Georgia, I'm Carl Azuz. Let's get to today's headlines.

AZUZ: First up, President Hu heads to the Hill. The Chinese leader wrapping up his visit to Washington, D.C. yesterday. The reception he got when he met with congressional leaders on Capitol Hill, not necessarily a warm one. Democratic and Republican leaders raised some of the strong concerns they have about China's policies on human rights and economic issues.

It was a different story Wednesday night at the White House, when President Hu was the guest of honor at a formal state dinner with President Obama you see here. These are special events, these state dinners, for world leaders when they visit the United States. The White House hadn't hosted one for China since 1997.

During his time in Washington, President Hu talked about China's role as one of the biggest economic powers in the world. Some of China's economic policies are frustrating 2 some officials and companies in the United States, and Brian Todd explains why.

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BRIAN TODD, CNN CORRESPONDENT, WASHINGTON, D.C.: At the White House, the dignified 3 pageantry of a state visit for China's president, Hu Jintao. But just under the surface, smoldering 4 resentment 5 towards the Chinese in the halls of American government and business. Accusations 6 of currency manipulation, unfair barriers to American businesses in China, and American products being copied or ripped off. Bootlegged DVDs of the latest Hollywood releases are sometimes available on Chinese streets before they even open in American theaters. American companies developing electronics, prescription 7 drugs and software have similar complaints.

The Chinese government even engages in some of this practice, right?

FRED BERGSTEN, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: The Chinese government has laws that protect intellectual property, but in practice, enforcement is very lax. And in some cases, Chinese government agencies, including military agencies, will sometimes rip off the intellectual property themselves.

TODD: Fred Bergsten of the Peterson Institute says the Chinese steal American intellectual property by reverse engineering: buying American products, figuring out how they're put together. Then they make those parts themselves at a cheaper cost. Then there are complaints about China's trade rules. Take a company like Marlin Steel Products in Baltimore, where 20 percent of revenue comes from exports. Company president Drew Greenblatt says he'd like to export to China, but the Chinese have a rule that many products sold to government agencies there, or which get tax breaks, have to be made completely in China. Known as the "indigenous 8 innovation policy," it stacks the deck against American companies like Marlin Steel. There's a direct impact, Greenblatt says, on American jobs.

GREENBLATT: For every million dollars in new exports I get, I'm going to hire about eight more people.

TODD: Chinese officials say their trade policies are not unfair, and they're stepping up enforcement of intellectual property laws. But the list of American complaints may prompt action from Congress, especially newly empowered Republican leaders in the House.

What are you and other congressional leaders prepared to do to put more pressure on China to level this playing field?

REP. CHARLES BOUSTANY, (R) LOUISIANA: We're going to continue to work, looking at our trade law, what we have to enforce trade agreements. We're going to continue to really pressure Chinese leaders, whether it's coming from Congress or from the administration, on this indigenous innovation policy and meeting their agreements under the WTO, the World Trade Organization agreements.

TODD: But taking action against China is not risk free. Fred Bergsten of the Peterson Institute says, as the second biggest economy in the world right now, the Chinese have a lot of clout 9, that they can and will retaliate 10. They'll block U.S. exports, they'll reduce their investments in American securities. The Chinese are America's biggest banker in the world by far, Bergsten says, and right now, they have a lot of leverage 11. Brian Todd, CNN, Washington.