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China's Xi sells U.S. trade elixir, personal chemistry

Chinese VP Xi and his U.S. counterpart Biden address a meeting with governors and Chinese provincial officials in Los Angeles
Chinese VP Xi and his U.S. counterpart Biden address a meeting with governors and Chinese provincial officials in Los Angeles

By Chris Buckley and Edwin Chan

LOS ANGELES (Reuters) - China's leader-in-waiting Xi Jinping on Friday swiped away fears that his country's economic growth could stumble, and turned to courting American companies, film-makers and governors hungry for a slice of that growth on the final day of his U.S. visit.

At the end of Vice President Xi's five-day trip, his U.S. counterpart Joe Biden announced China had agreed to make it easier for Hollywood to distribute movies to China's expanding audiences. Xi (pronounced "shee") told a business forum in Los Angeles that China would promote greater domestic demand and turn more to the United States to buy imports and send investment.

Despite recent economic slowing and persistent price pressures, Xi told the gathered business executives that China's economic momentum would not falter as some economists warn.

"China's economy will maintain stable growth," he said "There will be no so-called hard landing."

Xi is almost sure to succeed Hu Jintao as Chinese president in just over a year, and the final day of his tour of the United States featured commercial deals and reassuring talk intended to blunt American ire about the trade gap between the countries.

"We will further increase imports from other countries in the light of our economic and social development and consumer demand. We will actively expand imports from the United States," Xi later told a midday meeting.

Biden, who accompanied Xi to Los Angeles, praised the Chinese Vice President's efforts to reach out to often wary Americans, but reminded him that rancor over trade imbalances and barriers had not evaporated in all the sunny goodwill.

"The crux of our discussion is that competition can only benefit everyone if the rules are fair and followed," Biden told the midday reception for Xi.

The U.S. movie industry has long complained about China's restrictions on the number of foreign films allowed into the country each year, a limit that they say boosts demand for the bootleg DVDs that are widely available in China.

The film announcement does not remove China's quota system, but it might ease some of the ire.

The agreement allows more American exports to China of 3D, IMAX, and enhanced-format movies, and also expands opportunities to distribute films through private enterprises rather than the state film monopoly, the U.S. Trade Representative's office said.

GETTING READY FOR NEXT DECADE

The two vice presidents both suggested that Xi's diplomacy, deals and folksy public displays could pave the way for steadier ties between the world's two biggest economies.

Xi said that he felt from his visit that "mainstream American opinion" supports stronger ties. "I can now say that my visit has been fully successful," he said.

"We've established a personal friendship and a healthy working relationship," he said of himself and Biden.

Xi is poised to become China's next leader after a decade in which it has grown to become the world's second-largest economy. Beijing wants to avoid tension with Washington while the Communist Party leaders focus on the power handover.

Xi's visit to the United States was also intended to get both sides more familiar with each other for the decade that he could be in power. He will most likely succeed Hu Jintao as party chief in late 2012 and as president in early 2013.

Under Xi, China's economic size and military capabilities are likely to grow closer to U.S. levels.

Washington and Beijing have often jostled over economic, political and foreign policy disputes from human rights to Taiwan and most recently Syria.

The U.S. trade deficit with China expanded to a record $295.5 billion in 2011, and many U.S. lawmakers complain China's yuan currency is significantly undervalued, giving its companies an unfair advantage.

The Obama administration has also accused China of distorting trade flows by ignoring intellectual property theft, putting up barriers to foreign investors and creating rules that favor China's state-owned behemoths.

Xi's stop in Los Angeles was choreographed to blunt those complaints and make China's case that its rapid growth presents the U.S. economy with opportunities, not threats.

Scores of executives from major U.S. and Chinese companies, from Intel to Microsoft, lined up to sign deals after Xi's address at the economic forum on Friday.

They included "Kung Fu Panda" studio Dreamworks Animation's venture to make films from Shanghai, and Chinese telecom giant Huawei's pledge to award $6 billion in contracts over three years to Qualcomm Inc, Broadcom Corp and Avago.

"MISSION IMPOSSIBLE" FAN

More than the publicly stern Chinese President Hu, Xi has tried to put a friendlier face on his government during his U.S. visit, including revisiting the small town of Muscatine in Iowa where he visited in 1985 and stayed two nights with a family.

The 58-year-old also visited the International Studies Learning School in South Gate -- a Los Angeles enclave of mainly Hispanics -- where students learn Chinese.

At the school, Xi recalled his first visit to Muscatine: "They gave me the same impression that, like Chinese people, they are warm-hearted, friendly, honest and hard-working. Twenty-seven years have passed, but that remains my impression, and it has become a deeper one."

Xi also offered a glimpse of his personal life, telling the students he enjoyed swimming and watching sports, including American basketball, baseball and gridiron football.

Showing his familiarity with Hollywood fare, Xi said it was difficult to find time to relax. "It's like the name of that American movie -- 'Mission Impossible'."

After their visit to the school, Biden told reporters the talks with Xi had been very forthright, and was also intensely curious about the workings of the American political system.

"This is a guy who wants to feel it and taste it, and he's prepared to show another side of Chinese leadership," said Biden. "He is intensely interested in understanding why we think the way we do, what our positions are, and the need to actually broaden this kind of understanding."

Xi was due to watch part of an LA Lakers basketball game before he left for the next two countries of his international tour, Ireland and then Turkey.

(Additional reporting by Doug Palmer and Paul Eckert in Washington; Editing by Todd Eastham and Robert Birsel)

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