The Real Problem With China

New York Times ^ | january 11, 2011 | David Leonhardt

[lbryce]

When China’s president, Hu Jintao, visits here next week, the exchange rate between Chinese and American currency will inevitably become a big topic of conversation.

China has been holding down the value of its currency, the renminbi, for years, making Chinese exports to the United States cheaper and American exports to China more expensive. The renminbi’s recent rise has been too modest to change the situation, and Mr. Hu’s state visit is sure to highlight the real tensions between the countries.

Yet the focus on the currency has nonetheless become excessive. The truth is that the exchange rate is not the main problem for American companies hoping to sell more products in China and, in the process, create more jobs in this country. The exchange rate does not need to be the focus of next week’s meetings.

For the United States, the No. 1 problem with China’s economy is probably intellectual property theft. Technology companies, for example, continue to notice Chinese government agencies downloading software updates for programs they have never bought, at least not legally.

No wonder China has become the world’s second-largest market for computer hardware sales — but is only the eighth-largest for software sales..

[lbryce]

The Real Problem With China........

...... is the time still left in O's one-term presidency.