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China blasts U.S. over trade protectionism
Globe and Mail ^ | 23/03/06 | BARRIE MCKENNA

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.


TOPICS: Business/Economy; Extended News; Foreign Affairs; Government; News/Current Events
KEYWORDS: china; freetrade
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To: jec41
Thank you for posting this. It clearly illustrates the one-sided nature of trade with China, and why it is a bad idea:

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. [true enough - but here's the other shoe]

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.


Why is that, you ask? Well, the leaders of China understand something that our leaders do not understand. That is, the world's superpowers have always had a strong domestic manufacturing infrastructure. Boeing transferred this manufacturing to China because the Chinese demand this sort of a transfer of technology and capital on a routine basis holding out the mythical carrot of "a billion consumers" to shortsighted American CEOs.

Of course, more often than not, these companies get their pockets picked and come home the poorer for it (Qualcomm's experience, for instance).
41 posted on 03/23/2006 8:21:44 AM PST by Old_Mil (http://www.constitutionparty.org - Forging a Rebirth of Freedom.)
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To: texastoo

"Free trade?" No. Lower tariffs? Usually.


42 posted on 03/23/2006 8:22:31 AM PST by 1rudeboy
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To: Old_Mil
Of course, more often than not, these companies get their pockets picked and come home the poorer for it

I doubt if Caterpillar Inc. CEO Jim Owens, is coming home. He has been fully "free traitorized" and his allegiance appears to be with China now.
43 posted on 03/23/2006 8:24:08 AM PST by hedgetrimmer ("I'm a millionaire thanks to the WTO and "free trade" system--Hu Jintao top 10 worst dictators)
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To: John Filson

More Bulls*** from China about trade. Notice how they never respond directly when we object to their massive theft of our software, music CDs, and movie DVDs. Instead they make diversionary statements about some insignificant issue to try to change the subject. In China, power talks and Bulls*** walks. It's time to hit them with a 8% tariff on a broad range of manufactured products. They do not respect Americans and they are currently engaged in a deliberate, calculated economic assault on America.


44 posted on 03/23/2006 8:27:33 AM PST by defenderSD (¤¤ Wishing, hoping, and praying that Saddam will not nuke us is not a national security policy.)
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To: Old_Mil
Of course, more often than not, these companies get their pockets picked and come home the poorer for it (Qualcomm's experience, for instance).

You might have a incorrect conclusion. Boeing and China have had a close relationship since the 1930's. Boeing's first seaplane was designed by a Chinese engineer.

45 posted on 03/23/2006 8:29:59 AM PST by jec41 (Screaming Eagle)
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To: texastoo

So repeal the bill. What could be the harm?


46 posted on 03/23/2006 8:30:12 AM PST by TBP
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To: All

Chinese government officials also have a really annoying habit of continuous bald-faced and very obvious lying about trade issues. Hey China, you're not fooling anybody. We know when your government is lying, every time. All you're doing is annoying us and bumping the future tariff up by another 2% with all your lies. It's time for China to show some respect for America and the free world.


47 posted on 03/23/2006 8:32:20 AM PST by defenderSD (¤¤ Wishing, hoping, and praying that Saddam will not nuke us is not a national security policy.)
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To: hedgetrimmer

Seeing that Caterpillar is one of the largest exporters in the U.S., and seeing that you (presumably) do not wish it to sell to China, how many earth-movers are you ready to buy? It'll have some excess capacity if you succeed.


48 posted on 03/23/2006 8:34:25 AM PST by 1rudeboy
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To: TBP

The harm????? We wouldn't be following the mandate of the UN.


49 posted on 03/23/2006 8:37:57 AM PST by texastoo ("trash the treaties")
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To: TBP

The harm????? We wouldn't be following the mandate of the UN.


50 posted on 03/23/2006 8:38:02 AM PST by texastoo ("trash the treaties")
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To: Old_Mil

The US has been getting their pockets picked from China for years.

Table 1. U.S. Merchandise Trade with China: 1988-2000
($ Billions)

Year U.S. Exports U.S. Imports U.S. Trade Balance
1988 5.0 8.5 -3.5
1989 5.8 12.0 -6.2
1990 4.8 15.2 -10.4
1991 6.3 19.0 -12.7
1992 7.5 25.7 -18.2
1993 8.8 31.5 -22.8
1994 9.3 38.8 -29.5
1995 11.7 45.6 -33.8
1996 12.0 51.5 -39.5
1997 12.8 62.6 -49.7
1998 14.3 71.2 -56.9
1999 13.1 81.8 -68.7
2000 16.3 100.1 -83.8

Source: U.S. Department of Commerce.




51 posted on 03/23/2006 8:40:58 AM PST by texastoo ("trash the treaties")
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To: Old_Mil
Speaking of companies getting their pockets picked by China, check out a post by Cowboy Jay on this thread about how his company was ripped off by China. I'm afraid this kind of behavior by China is all too typical. This thread is right here.
52 posted on 03/23/2006 8:43:31 AM PST by defenderSD (¤¤ Wishing, hoping, and praying that Saddam will not nuke us is not a national security policy.)
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To: texastoo
The US has been getting their pockets picked from China for years.

How is buying low priced goods from China equivalent to getting our pockets picked?

Do you think trade deficits are bad? Do you think trade surpluses are good?

53 posted on 03/23/2006 8:43:43 AM PST by Toddsterpatriot (Why are protectionists so bad at math?)
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To: texastoo
The harm????? We wouldn't be following the mandate of the UN.

GOOD!!!!!

54 posted on 03/23/2006 8:44:47 AM PST by TBP
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To: Old_Mil
Sorry, I had a typo in that link. Here's the correct link to Cowboy Jay's post
55 posted on 03/23/2006 8:46:53 AM PST by defenderSD (¤¤ Wishing, hoping, and praying that Saddam will not nuke us is not a national security policy.)
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To: Toddsterpatriot; CowboyJay

He's talking about the way China rips off American companies by tricking these companies into doing largely unpaid R&D work and investment for China without the long-term benefits that China promised when the companies made these deals. Check out the very telling story by Cowboy Jay. Link is posted above.


56 posted on 03/23/2006 8:49:39 AM PST by defenderSD (¤¤ Wishing, hoping, and praying that Saddam will not nuke us is not a national security policy.)
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To: kittymyrib
China is living off our dollars, and they should be grateful they are in better shape than N. Korea because of it.

Not to worry. At this rate, they'll be a completely self-sufficient economy (not to mention military) in a few years and will be able to tell Wal-Mart to go pound sand.

57 posted on 03/23/2006 8:49:58 AM PST by Euro-American Scum (A poverty-stricken middle class must be a disarmed middle class)
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To: Toddsterpatriot

What you're seeing on these theads is the truth emerging about China, without being sanitized by State Department wonks who have a hidden agenda to "maintain good relations with China" and move US manufacturing to China. No wonder there are people in our government who want to shut down FR.


58 posted on 03/23/2006 8:51:55 AM PST by defenderSD (¤¤ Wishing, hoping, and praying that Saddam will not nuke us is not a national security policy.)
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To: hedgetrimmer
How's that for "free trader" logic? A communist country getting market-economy status? "free trade" is worse than a joke, its a catastrophe for freedom.

It's probably safe to say that by 2016, China will be more ofa "socialist dictatorship" than a fully communist nation in the Soviet model. Of course, it's the "dictatorship" portion of that equation which they won't relinquish. Of course, perhaps the reason that free traders are so comfortable doing business with such regimes is that the believe that a socialist dictatorship is the political destination of our own republic.

The difference between the Chinese and the Russians is that when push came to shove, the Soviet Army wouldn't fire on its own people and the Chinese army did.
59 posted on 03/23/2006 8:52:19 AM PST by Old_Mil (http://www.constitutionparty.org - Forging a Rebirth of Freedom.)
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To: defenderSD
He's talking about the way China rips off American companies by tricking these companies into doing largely unpaid R&D work and investment for China without the long-term benefits that China promised when the companies made these deals.

No, he's talking about trade deficits. That's why he included trade figures, imports and exports.

60 posted on 03/23/2006 8:52:26 AM PST by Toddsterpatriot (Why are protectionists so bad at math?)
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