China's "Iron Lady" Wu Yi confirms retirement

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BEIJING, Nov 23 (Reuters) Chinese Vice Premier Wu Yi, known as China's ''Iron Lady'' for her tenacity in trade negotiations, said today that she would retire from government early next year.

Wu, 69 this month, has been responsible for talks with the United States on contentious trade issues and been called on by Beijing to manage a number of crises, from this year's scandals over product safety to SARS in 2003.

Few Chinese politicians command the respect that Wu enjoys internationally, something she earned during the 1990s when she defused a looming trade war with the United States. US Treasury Secretary Henry Paulson, for one, has called her a ''force of nature''.

''When the new Chinese administration takes office next March, I will retire and won't hold any positions,'' Wu said in a speech to the American Chamber of Commerce in China.

''I would like to take this opportunity to bid you farewell and to thank you for supporting my work all along,'' she said, to a standing ovation.

After she was left out of a newly elected Communist Party Central Committee in October, it has been widely expected that Wu would step down from her government post during a cabinet reshuffle next March.

But the acknowledgment of her departure from government, coming ahead of a European Union-China summit next week and the next round of the US-China ''strategic economic dialogue'' in December, could add some uncertainty to the future of such bilateral talks.

In her speech, Wu sought to allay concerns that China could be backtracking on opening its economy.

''China's policy towards using foreign investment will not change; the government's stance of valuing and seeking more foreign investment will not change,'' she said. ''China's door will always be open.'' Wu pledged further steps to improve the business environment for foreign firms, including by enhancing government transparency and the rule of law and beefing up protection of intellectual property rights -- concerns often cited by business groups.

She noted the efforts Beijing had made to deal with the recent product quality scandals and to ease the country's gaping trade surplus, which has fuelled tensions with its major trading partners, especially the United States and European Union.

Wu did not directly discuss China's currency, the yuan, which critics say is significantly undervalued, giving the country's exporters an unfair advantage in global markets.

''We're willing to work together with all involved to make unremitting efforts to address the issues of product quality and the trade imbalance,'' she said.

REUTERS RSA KN2125

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