The United States will review granting the market economy status and loosening controls on exports to China, visiting Secretary of Commerce Gary Locke said on Wednesday.

"We continue to discuss what it will take for China to declare as a market economy," he said in Hangzhou, Zhejiang Province.

His remarks came after Chinese media claimed that the world's largest economy is set to recognize China as a full market economy during US President Barack Obama's visit to China next month.

Locke was in China to attend the 20th China-US Joint Commission on Commerce and Trade, to be co-chaired by Vice-Premier Wang Qishan and US Trade Representative Ron Kirk, in Hangzhou today.

Locke, the top US commerce official, was quoted by foreign media during his visit to Guangzhou on Tuesday as saying that Obama's visit to China next month will see "some major breakthroughs" in bilateral trade relations.

Chinese experts said the breakthroughs might include the US' recognition of China as a market economy.

Many countries such as New Zealand have recognized China's status.

However, at least one researcher says the status may not be given anytime soon.

He Weiwen, council member of Chinese Societies for American Economy Studies, said: "It is not easy for the US to give a nod to China's market economy status so soon, as the two nations still have many conflicts."

When it joined the World Trade Organization in 2001, China agreed that members could deny its market economy status until 2016.

Without market economy status, Chinese traders have fallen victim to anti-dumping charges launched by trading partners, He said.

That is part of the reason why China faced a surge of protectionism measures amid the financial crisis since late last year, He said.

But He added that the "breakthrough" referred to by Locke is likely to be about deregulation on US export controls, especially on hi-tech products to China.

Amid the financial crisis, the US is eager to invigorate its economy - green technology is the selling point.

"There is a high possibility that the US will announce a deregulation on exports control soon," He said.

Locke said yesterday that Obama asked federal agencies to review the export-control system a few weeks ago and that the US Congress is re-examining the issue.

As for the commission meeting, Locke listed intellectual property rights protection and enforcement, clean energy, medical devices and pharmaceuticals as priority issues.

He urged China to "do more to strengthen its intellectual property protections" in clean energy technologies during a speech yesterday.

The US official said a memorandum of understanding will be signed today by the US Trade and Development Agency and the Chinese Ministry of Commerce in clean energy development, which will focus on smart grid development, renewable energy, energy efficient buildings and clean energy technologies.

(China Daily October 29, 2009)