Posted on 09/26/2003 7:53:32 PM PDT by maui_hawaii
US ups ante on China
People with clout in the US want more aggressive measures - like China-specific trade tariffs - invoked against Beijing
By Roger Mitton
WASHINGTON - A string of senior figures in the United States political and business community has voiced vehement criticism of China's unfair trade practices and demanded stern action be taken to rectify the situation over the past week.
The verbal assault was based on claims that China has sucked away much of the manufacturing base in the US and has skewed its trading rules to ensure that it continues to run a huge trading surplus with the US.
Testifying before the US-China Economic and Security Review Commission on Sept 25, Congressman Donald Manzullo thumped the table and roared: 'I am hot! The United States has been bled by the Chinese. And that's got to stop!'
Other senators, congressmen and trade experts echoed the passionate lamentations of Mr Manzullo and called for drastic steps, including the imposition of trade tariffs on Chinese imports to the US.
Even officials from the administration of President George W. Bush got into the act.
Referring to the alleged underhand tactics of the Chinese, Deputy Assistant Secretary of Commerce Henry Levine said: 'Americans are willing to compete on even terms with any country in the world, but we will not stand for unfair competition. We will not look the other way or wait idly.'
Most of the complainants waxed indignant about how China has not lived up to its obligations under the World Trade Organisation, which it joined on unique terms in December 2001.
Said Deputy Assistant US Trade Representative Charles Freeman: 'Rather than completing the process of implementing its WTO commitments as a pre-condition of membership, China was admitted to the WTO by committing to implement them.'
Many in the US assert that China has not come anywhere near to living up to these commitments.
In a clear barb against Beijing, the US Secretary of Commerce Donald Evans said: 'American manufacturers can compete against any country's white collars and blue collars, but we will not submit to competing against another country's choke collars.'
The most problematic areas in the impending trade war with China concern agriculture, services, enforcement of intellectual property rights and transparency.
As well, said Mr Freeman, 'China's use of certain tax policies to favour domestic production or provide incentives to increase exports has developed into a significant source of concern'.
Many US legislators repeatedly pointed out how thousands of jobs in the agricultural and manufacturing sector have been lost to China.
They said China was reaping a huge windfall in exporting its manufactured goods to the US, while making it difficult for US businesses to break into the Chinese market.
Last year, the trade imbalance between the US and China was a staggering US$103 billion (S$178.6 billion) and it is predicted to be even higher this year.
China's refusal to allow its currency, the yuan, to float freely according to normal free market practices came under sustained attack during last week's congressional hearings.
Said Senator Charles Schumer: 'Economists suggest that China's currency is undervalued by anywhere from 15 per cent to 40 per cent relative to the American dollar.'
He told the hearing that this gravely disadvantaged US companies.
'It means that American goods are artificially expensive for Chinese buyers,' he said.
'More importantly, it means that Chinese goods are artificially cheap.'
That meant fewer US goods are being sold in China and more Chinese goods are being sold in the US.
That has resulted in the whopping trade imbalance in China's favour.
Legislators claimed that this situation has gone on for far too long and they proposed a series of measures to fight back against China.
Mr Schumer and a group of his colleagues plan to introduce a Bill in the Senate that will impose a 27.5-per-cent levy on all imports to the US from China.
Senator Schumer said: 'There is no doubt that such a tariff is a blunt instrument, but previous experience shows that playing hardball works wonders in the world of international trade.'
While President Bush's administration would balk at such a measure, it must show sympathy for the need to take action against China and thereby stem the loss of jobs and revenue.
The economy will be a major issue in next year's presidential election and Mr Bush must be seen to be acting firmly to try to bring jobs back home.
Accordingly, the US Commerce Department will set up an Unfair Trade Practices Team to track, detect and confront unfair competition. Its principal target will be China.
Referring to Beijing's unfair practices, Mr Manzullo said: 'It's got to come to an end.'
If it does not, US legislators said that more aggressive measures like China-specific trade tariffs will be invoked.
And there are deep concerns that could spark a trade war between two of the world's trading giants.
In other words, some jobs won't come back... but a lot, a WHOLE lot will. And when they come back because of our comparative advantage there will be many new jobs created that were not in existence before.
The idea of globalization is to find out who has comparative advantages and invest in those countries. China is playing so that they have a comparative advantage in everything and its not working for us or anyone else.
Until equilibrium is restored the former of those two will not come back. There is no painless way to do it. China is going to have to just take it. The corporations that invested up to their eyeballs in China will have to take it too.
The latter of the new jobs I referred to will not happen until the former come back to where they belong. We are looking at long term problems otherwise.
BZZZ! Wrong again...
Respectful or not its simply wrong.
We sold $22.5 billion dollars worth of goods in Korea last year alone.
Here is the link to a US Census dept breakdown of what we exported to Korea for a 5 year term.
In fact, we exported more stuff to South Korea alone than we did to all of China.
Go to this list and pick the country you want to know about.
We sold 2.5 times as much stuff to Japan as we did to China.
Between S. Korea, Japan, and Taiwan...just those 3...we sold about $92 billion worth of goods in 2002.
If it is just corn then I do not mourn.
Its not just corn.
Between those three, thats more than double what we exported.
There is MUCH room for improvement.
Check out this table. According to the US Census Dept 78% of our imports from China are from non-related party trade.
Here is the definition of non related party trade:
Related party trade:
Imports: As defined in Section 402(e) of the Tariff Act of 1930, related party trade includes transactions between parties with various types of relationships including "any person directly or indirectly, owning, controlling or holding power to vote, 6 percent of the outstanding voting stock or shares of any organization."
According to them...your assessment isn't true. It would be something to look into though.
Secondly, the trade imbalances are calculated as follows: If a US corporation owns and operates a company in China, the profits remitted back to the US are deducted from total amount we import.
So if we import $100 billion in goods, then our corporations in China remit $5 billion in profits from their companies in China.... the imbalance is stated as $95 billion.
I feel that often these China trade discussions continue to focus on China and not on the Corporations that are get rich at both ends at the expense of Chinese cheap laborers and American unemployed.
I will agree with a lot of that.
Yes, so you've said. Like 20 times now.
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