Serious Progress Needed to Avert China Trade War : Pacific Rim: U.S. energy secretary announces $4 billion in joint ventures despite Sunday deadline for sanctions.

The top U.S. negotiator in talks with China to avert a trade war over intellectual property piracy said early today that significant progress was needed with just hours to go before bruising sanctions go into force.

“There were meetings that were held last night,” U.S. Deputy Trade Representative Charlene Barshefsky told reporters. “There was no progress made.”

“If there is going to be agreement, there will have to be very significant progress made today,” she said as she left for a final day of talks at the Ministry of Foreign Trade and Economic Cooperation.

“Whether that is possible or not, I can’t predict,” she said.

Tit-for-tat sanctions worth more than $2 billion are due to take effect Sunday if the two sides fail to reach agreement over preventing counterfeiting of copyrights, trademarks and patents in China.

While Chinese and American negotiators labored to avert a trade war, U.S. Energy Secretary Hazel O’Leary on Friday announced joint ventures worth more than $4 billion.

Further underlining the complexity of U.S.-Chinese economic relations, eight U.S. movie studios went to court in Beijing to sue stores for selling pirated versions of their films.

Such pirating is at the heart of the trade dispute over China’s protection of copyrights, trademarks and patents.

But the trade delegation led by O’Leary appears to have managed to insulate its business from the tensions surrounding the copyright talks.

The energy ventures announced Friday, combined with deals signed earlier in Shanghai, total more than $6 billion, about $4.6 billon of which would go to U.S. companies.

“President Clinton sent this delegation to China to forge stronger bonds of friendship between the U.S. and China and produce economic and environmental benefits to both our countries,” O’Leary said.

“We have accomplished our mission.”

China’s desperate need for international financing to meet the dramatic rise in energy demands appears to have outweighed its frustration with U.S. demands for fast improvements in its protection of copyrights, patents and trademarks.

China is expected to need between $200 billion and $300 billion to finance a doubling of electrical output in the next 15 years. U.S. firms are hoping to win a large share of that business.

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The largest deal was a letter of intent to set up a joint venture to build and operate a 1,200 megawatt power station in western Sichuan between the province’s power company and a unit of General Public Utilities, one of the biggest power firms in New Jersey, the U.S. Embassy said.

The plant requires a capital investment of more than $1.2 billion, with the U.S. share of the financing more than $1 billion, it said.