Posted on 03/23/2006 3:57:28 AM PST by John Filson
-- Beijing politely rolled out the red carpet this week as two leading U.S. senators began a fact-finding mission to determine how to punish China for manipulating its currency. But half a world away in Geneva, China's delegate to the World Trade Organization lobbed a rhetorical bomb at the United States, accusing Washington of hyping national security concerns to restrict foreign investment on its home turf.
"By interpreting and applying WTO national security clauses in an excessive way, [the United States] has again seriously undermined the credibility of the multilateral trade regime, over which China is highly concerned," Chinese WTO envoy Sun Zhenyu told his fellow ambassadors yesterday.
The comments appeared to be directed at U.S. political backlash that helped kill a bid last year by China's CNOOC Ltd. to acquire Unocal Corp., a Houston-based U.S. oil and gas producer.
"Recently the United States exerted pressure and imposed restrictions on inward [foreign direct investment] on account of national security, which prevent foreign companies from seeking mergers and acquisitions [there]," Mr. Sun added.
The verbal attack, which coincides with the release of a WTO report on U.S. trade policy, marks the latest flashpoint of an increasingly strained relationship between the two economic and military giants.
China wasn't alone in warning about rising protectionist tendencies in the United States. In comments filed yesterday with the WTO, the European Union urged the United States to strike "a better balance" between security concerns and avoiding "unnecessary and costly burdens" to legitimate business.
Responding to the criticism, U.S. Trade Representative Rob Portman said the Bush administration is "cognizant of the potential for protectionism in the U.S. and we are actively communicating the real world benefits of trade at home." But he pointed out that United States hardly has a monopoly on anti-trade tactics.
"Economic isolationism . . . is not just a phenomenon in the United States," Mr. Portman said in a statement released in Washington.
The recent furor over the proposed takeover of several East Coast ports by Dubai Ports World of the United Arab Emirates has caused concern that the United States may be turning increasingly inward as it wages a global war on terrorism.
In the United States, critics blame China for stealing U.S. jobs and pushing the trade deficit to record levels by keeping the value of its currency, the yuan, artificially low. Last July, China raised the value of the yuan by 2.1 per cent and introduced a system to gradually move the currency away from its peg to the U.S. dollar. But the currency has barely moved since.
In Beijing, Republican Senator Lindsey Graham said the next couple of months could be a defining period in U.S.-China relations.
"Our goal is to let the Chinese government realize that the politics of this issue is about to get out of hand," warned Mr. Graham, co-author of a bill with Democrat Charles Schumer that would slap a 27.5-per-cent tariff on all Chinese imports. He said the senators are stressing to leaders in Beijing that "if you think the relations between our two countries are good, you're misreading the tea leaves back home [in the U.S.]. They're not good, and they're getting worse."
Mr. Graham and Mr. Schumer have said they want to push for a vote on the widely popular legislation as early as this month. The senators were slated to meet yesterday with Zhou Xiaochuan, governor of the People's Bank of China.
The Congressional vote could be the first dust-up in the prelude to next month's U.S. visit by Chinese President Hu Jintao. The White House confirmed yesterday that Mr. Hu would meet U.S. President George W. Bush on April 20.
That's just five days after the U.S. Treasury Department is slated to release a report on whether to officially brand China a currency manipulator -- the first step in imposing sanctions.
Although largely drowned out by the politicians, U.S. business leaders have appealed for calm in the escalating dispute. Caterpillar Inc. chairman Jim Owens warned Congress not to be seduced by tariffs and other retaliatory measures against the Chinese.
$35 billion (not including services) is not "chump change." Feel free to argue that it is "comparitively small," etc.
s/b "comparatively"
Time to quit WTO?
Good links.
Unfortunately, if a $345B trade deficit isn't enough for "free traders" to reconsider their position, I doubt 20% vs. 1.6% tariffs will.
Much better, thanks.
Yeah, you won't find many "free-traders" wishing to emulate the tariff regime of, say, Zimbabwe.
The yuan is now based on a basket of currencies not pegged to the dollar. Currency trading determines its value not US congress men. However Pacific Asian countries are meeting to consider one currency for all including Japan, S. Korea, China, Indonesia, Taiwan, and other Asian countries. It would function like the Euro and the Yuan is the currency most favored.
THEN JUST DON'T TRADE WITH THEM. AMERICAN COMPANIES WILL SIMPLY MOVE THERE.
Boeing 787 Highlights $600 Million in Contracts with Chinese Suppliers
Click image to view Photo Release.
These images are available for editorial use by news media on: boeingmedia.com
NOTE: BCA photo release images are available on boeingmedia for 12 months from their release date. BEIJING, June 02, 2005 -- Boeing [NYSE: BA] today announced agreements with Chinese suppliers worth an estimated US$600 million for production of commercial airplane parts and components, including the first firm contract with such suppliers to build parts for the all-new Boeing 787 Dreamliner.
Boeing Commercial Airplanes Vice President and General Manager, Airplane Production Carolyn Corvi represented Boeing in Beijing to finalize contracts for the 787 composite rudder, the 737 forward entry door and the 737 automatic over-wing exit door with Chengdu Aircraft Industrial (Group) Co. Ltd. (CAC), a China Aviation Industry Corporation I (AVIC I)-affiliated company. Also completed were contracts for the 787 wing-to-body fairing panels between Boeing and Hafei Aviation Industry Co., Ltd. (Hafei), an AVIC II-affiliated company.
Additional announced agreements further reflect the expanding role by China in the production of airplane components for Boeing.
Shenyang Aircraft Corporation, an AVIC I-affiliated company, signed memorandum of agreement with Boeing to build the 787 leading edge assembly for the vertical fin. BHA Aero Composite Parts Co. Ltd. signed memorandums of understanding to build the interior panels for the 777 control cabin, as well as the wing-to-body fairing panels and tail cone for the Next-Generation 737. BHA is an equity-share joint venture between Boeing, Hexcel Corp. and AVIC I.
"Today's agreements, in full compliance with U.S. and Chinese export regulations, offer a continuing example of the important and growing role in China on the 787 and participation in the 777, 747 and 737 airplane programs," Corvi said. "China's aviation industry is providing outstanding technological capabilities and resources that help us meet quality, cost and delivery imperatives in our programs -- particularly on the new 787. China has been a reliable partner to Boeing for many years and we are honored that they are part of our future with the 787 airplane."
Also at the signing event, Boeing announced the decision to substantially increase 737 component production rates at Shanghai Aviation Industrial Corp., Xi'an Aircraft Company and Shenyang Aircraft Corporation for the manufacture of 737 empennages, including the vertical fin and horizontal stabilizer.
Joining Corvi at the event were Liu Gaozhuo, president, AVIC I; Luo Ronghuai, chairman and president, CAC; Xu Zhanbin, vice president, AVIC II; Hu Haiyin, chairman of the board, Hafei; Ian Chang, general manager, BHA; Li Fangyong, chairman and president, Shenyang Aircraft Corporation; Fu Shula, president, CATIC; and David Wang, president of Boeing China.
Liu Gaozhuo said AVIC I and its facilities have 30 years of working together with Boeing.
"The 30 years has resulted in an increasing understanding and trust between AVIC I and Boeing, and a win-win cooperative spirit," he said. "All of our efforts have paid off, and we are happy to see the cooperative relationship between us getting more solid every day. AVIC I will work hard toward becoming a world-class supplier and one of the more outstanding aviation companies in the world."
Xu Zhanbin said: "This is the very first time an AVIC II company has worked with Boeing. We look forward to seizing this historical opportunity to enhance and extend our working-together relationship with The Boeing Company. I believe our cooperation will be mutually beneficial and a complete success."
Luo Ronghuai of CAC expressed pleasure in becoming a supplier-partner on the all-new 787 airplane.
"The contract signing signifies a new era of Sino-Boeing cooperation," he said. "It is an honor to be one of the first supplier-partners in China to finalize a contract for work on the Boeing 787 Dreamliner, as well as receive new work on the best-selling 737 airplane."
Hu Haiyin said Hafei is looking forward to working with Boeing on the wing-to-body fairing panels for the 787 Dreamliner.
"We are very excited to be selected as Boeing's partner to help build the structural components for this exciting new airplane," he said. "This opens the first page of a positive Hafei-Boeing relationship."
Ian Chang said this is a great expansion of work statement for BHA.
"BHA has been selected by Boeing as a supplier-partner for additional statements of work on the 777 and 737, and we will be working together to finalize contracts for these parts and assemblies," he said.
Li Fangyong of Shenyang Aircraft Corporation said there has been a very long and trusted relationship working together with Boeing on the 737 airplane, which his company intends to expand on the 787 airplane.
"Building for the future, SAC has constructed a new commercial machine shop and has nearly completed a new composite manufacturing center," he said. "It is our goal to support all future Boeing programs."
Commercial aviation is crucial to the advancements that will sustain continued economic growth and development in China. Boeing has worked with China's aviation industry for more than 33 years. With these announcements today, Boeing now holds contracts valued at $1.6 billion with China's aviation industry.
Today, more than 3,500 Boeing airplanes -- one third of Boeing's world fleet -- have major parts and assemblies built in China. Examples of major parts and assemblies built for Boeing by the Chinese industry include the 737 horizontal stabilizer from Shanghai Aircraft Corporation, 737 vertical fin from Xian Aircraft Corporation and 737 tail section modules from Shenyang Aircraft Corporation.
Boeing is China 's largest commercial aviation partner. Over the next 20 years, Boeing forecasts that China will need 2,300 jetliners, becoming one of the world's largest airplane markets. Boeing has offered free training to more than 27,000 Chinese aviation professionals since 1993 including pilots, maintenance, flight operations, quality and manufacturing personnel, executives and managers.
Yeah. Some folks need explaining that 35,000,000,000 is a small number. Low IQ and all that.
Big words from a guy who can't count.
China regularly violats its treaty that says it won't dump goods at below-market prices. These goods are made by lsave labor, in violation of another treaty. China has nuclear warheads aimed at us. The Red Chinese murderers are in no position to lecture anyone about anything. They should be toppled, not coddled.
We shoudl ban all Red Chinese goods from this country.
I fail to see why we are looking at the average in the first place, and why countries such as North Korea, Venezuela, Cuba, and Belarus should be included in its calculation.
I think it is too late. Are you aware that our yellow-bellied congresscritters were forced to vote on China as most favored nation by non other than the WTO?
Free trade is a joke.
In order for the WTO agreements to fully apply between the United States and China, the United States must grant permanent normal trade relations (PNTR) status to China (currently, that status is renewed on an annual basis). Legislation (H.R. 4444) granting PNTR status to China passed the House on May 24, 2000, and in the Senate
Boy, that WTO really gets around.
Anywhere you find the WTO you find free trade. HAHHAHAHAHA
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