U.S. - China Economic Issues

[Guest LAW]

The United States and China share one of the most important trade and economic relationships in the world. The U.S. exports $100 billion of goods and services to China, making China our largest trading partner after Canada and Mexico. Those exports support more than half a million U.S. jobs. China’s GDP growth is expected to have reached 10 percent in 2010, and U.S. goods and services exports to China are growing almost two times as fast as overall U.S. goods and services exports. We seek to base our relationship on mutual prosperity, respect for the rules-based trading system, and a deep commitment to resolve outstanding economic issues. President Obama and President Hu took note of the following commitments to strengthen the U.S.-China trade and economic relationship.

 

Strengthening Intellectual Property Rights Protection

 

China committed to strengthen intellectual property rights enforcement to protect innovative industries and the jobs they create.

 

* Private sector experts suggest decreasing China’s software piracy rate by 50 percent could increase legitimate software sales by $4 billion. The United States supports China’s commitment to assess and ensure its government’s use of legal software, by, among other measures, 1) allocating government budget funding for legal software purchases, 2) auditing the use of legal software and publishing the results of those audits, and 3) promoting the use of licensed software in private companies and in state owned enterprises through software asset management programs.

* The United States welcomed China’s agreement to hold accountable violators of intellectual property on the internet, including those who facilitate the counterfeiting and piracy of others, and to strengthen IPR protections in China’s libraries. China has also agreed to clarify the IPR liabilities of relevant third parties, like landlords, managers, and operators of markets that sell counterfeit products.

 

Eliminating Discriminatory Innovation Policies

 

* The United States and China committed that 1) government procurement decisions will not be made based on where the goods’ or services’ intellectual property is developed or maintained, 2) that there will be no discrimination against innovative products made by foreign suppliers operating in China, and 3) China will delink its innovation policies from its government procurement preferences.

 

* China agreed to eliminate discriminatory “indigenous innovation” criteria used to select industrial equipment for an important government catalogue prepared by the Ministry of Industry and Information Technology, to ensure that it will not be used for import substitution, the provision of export subsidies, or to discriminate against American equipment manufacturers in Chinese government programs targeting these products.

 

* The United States welcomed China’s commitment to let its “3G” third generation and future technologies develop free of discriminatory technology or standards preferences. China’s 3G infrastructure investment is expected to reach $10 to $12 billion in 2011.

 

* The United States supports China’s commitment to allow foreign companies equal opportunities to participate in the development of the country’s “smart” electric power grid. China committed that purchases of smart grid products and technologies will be made solely on commercial considerations with no discrimination against foreign companies. China also will ensure that foreign stakeholders have full opportunities to participate in an open, transparent process for establishing smart grid standards. China also committed to make purchases solely on commercial considerations. China plans to spend $10 billion annually on smart grid investments.

 

Expanding Market Access for U.S. Manufactured Goods, Agricultural Products and Services

 

China committed to submit this year a robust revised offer to join the Government Procurement Agreement (GPA).

 

* China committed that its revised GPA offer would include not just commitments for central government purchases, but also purchases by sub-central entities. The Chinese central government has indicated that it alone procures more than $88 billion in goods and services annually; sub-central entities’ procurement is even more significant.

 

The United States and China are building on their successful and growing agricultural trade relationship. U.S. agricultural exports to China last year exceeded $12 billion, including soybeans, cotton, and wheat.

 

* The United States welcomed China’s December 2010 lifting of Avian influenza-related bans on U.S. poultry products from Idaho and Kentucky, and urged prompt action to lift the four remaining U.S. state-level bans.

[Guest somesam]

Unlike the transformation of Japan, China coupled with India involves nearly 3 billion people striving for parity with the U.S.A. and the West. Japan created a similar trade imbalance but with much shorter and much less dramatic impact. Today U.S.A. corporations are sending not only manufacturing jobs but also call centers, help desks and airplane heavy maintenance work overseas. Anything that can be done at a lower labor cost overseas is considered as long as it creates the revenue for the big bonus for the corporate executives.

 

Obama, Clinton, Bush and Reagan have all talked of creating jobs with various trade agreements, when in fact all they did was cost us our jobs. As long as a Chinese or Indian worker can and is will ing to perform an American job at a fraction of the American hourly rate, where do you suppose the job will go?

 

Obama keeps talking about creating jobs and the need for higher education, this will not work. He needs to stop the jobs from leaving and return the jobs that have left. Just look at the jobs IBM and GE have sent overseas.

 

With real U.S. unemployment at 20%;

1. The unemployed are a burden

2. The unemployed don't spend

3. The unemployed don't pay taxes

4. The unemployed don't pay sales tax

5. The unemployed don't buy houses

 

Our economy depends on full employment. Our local, state and federal taxes depend on full employment.

[Guest Ron]

The things we sell to China are from the biggest companies in America. Boeing and GE suck technology from our military complex for free. These companies then offshore the manufacturing to low wage workers in China. The US taxpayer funds it, the CEOs and Wall Street keep the profits. You need to tell these companys to manufacture 100% in America or the free ride is over.

[Guest Juan]

Your right. None of these trade agreements is worth a damn. China has an industrial policy to subsidize their workforce and take out market sectors one by one. The U.S. has a global trade policy that believes the market will work it out. We make concessions all the time, yet the other side does nothing. The proof is in the pudding.

[Guest Al]

In January 2005 - 1 USD Dollar = 8.3 Chinese Yuan

 

In January 2011 - 1 USD Dollar = 6.5809 Chinese Yuan

 

We have seen a 21% increase in value in 6 years. That comes to a 3.5% increase per year.

 

The average Chinese worker makes $0.63 USD per hour = 4.15 Chinese Yuan.

 

If President Obama is successful by the end of the year the average Chinese factory worker should make at 8 - 12 Chinese Yuan. If the average Chinese worker is making 4.30 Chinese Yuan then nothing has changed.

 

I state this, because every person in China knows that the country will not raise its rates, otherwise manufacturers will go somewhere else.

[Guest Ralph Perez]

1-We spend trillions on our military to keep oil & gas costs under control, the Chinese appear to be spending similar amounts on developing solar and other renewable energy.

 

2-The Chinese are beginning to use internet/online education as a basis for learning, we are sending our children to a large babysitting center called public school.

 

3-Anything we build here will be shipped to China, so it can be torn apart and manufactured for a lower cost. Watch the speed that electric cars are mass manufactured in China, while the American auto companies hold back this technology, so they can empty their shelves.

 

China has a 5 year plan, we have lifelong politicians. By the way, they are doing this with free health care for their citizens....

[Guest Scipio]

Breakers of the law, in truth, and lecherous folk, after they die, shall ever be whirled about the earth in torment, until many an age be passed; and then, all their wicked deeds forgiven, they shall come to that blessed region, to which may God send you His grace to come.

[Guest Andrew]

The global toy industry is estimated to be USD $75 billion. In 2009, U.S. retail sales of toys generated $21.47 billion.

 

We need to move the toy manufacturers back to the United States.

[Guest Eli]

Hopefully China's raising of worker wages will make the United States more competitive in the market.

 

http://www.google.com/hostednews/canadianpress/article/ALeqM5hAPXkfN8n8y0k5NHTsvVIHRq5VGw?docId=5761594

 

Many Chinese cities are raising minimum wages for workers, fanning inflationary pressures while also seeking to soothe frustrations over price hikes.

 

The double-digit increases in major manufacturing centres like Guangdong, and the cities of Shanghai, Tianjin and Beijing follow wage hikes last year that have further raised labour costs, accelerating a shift by makers of inexpensive goods to lower cost places like Vietnam and Indonesia.

 

Shortages of workers in some areas and strikes and other protests by disgruntled young workers have also prompted authorities to push minimum wages higher, with most localities expected to follow suit.

 

A report released last week by the American Chamber of Commerce in Shanghai said that 85 of the companies responding believed that rising costs are hurting China's competitiveness compared with other developing countries.

 

China retains massive advantages such as the standard of its infrastructure and its own huge market, which increasingly is the focus of foreign companies manufacturing there. But surging costs for labour, land, energy and materials have prompted many making low-cost items such as toys, shoes and clothing to move some production to other parts of the developing world.

 

Tianjin's labour bureau, in a statement seen Wednesday on its website, said it is preparing to raise the city's minimum monthly wage to 1,070 yuan ($160) from the current 920 yuan ($140).

 

Shanghai's mayor, Han Zheng, confirmed last week that the city was preparing for an April 1 increase in the city's minimum wage, by more than 10 per cent over the current monthly 1,120 yuan ($170).

 

Han described this as an effective way to ensure a "rational income distribution."

 

"It is our responsibility to raise wages in Shanghai because people living on those wages are having a really hard time," he told reporters during an annual news conference. "It is important for every worker to share the fruits of progress and harmonious labour relations are conducive to healthy businesses," he said.

 

Beijing has announced its minimum wage will rise by 20.8 per cent this year. Jiangsu, an affluent region adjacent to Shanghai, is hiking its minimum monthly pay by 15 per cent and Guangdong, by about 19 per cent in March to 1,300 yuan (about $200) — the country's highest.

[Guest Love2All]

China's juggernaut economy is the envy of the world, but at what cost to the country's people and environment? 101 East investigates.

[Guest Jeenyus1983]

I feel HORRIBLE for the poor Chinese people that have to endure this...But--WE Americans are also to blame...We've allowed and supported CHEAP CHINESE made goods for decades now..the Chinese have little to NO regulations regarding employee safety standards! They pay their workers a SLAVES wage to lower the price that makes Americans UNCOMPETITIVE - We CANT live off 75 bucks a month here! and WE SUPPORT SLAVE LABOR in the US (in God we trust)

[Guest Dr. Jerome Corsi]

China has decided to invade the United States, not with tanks and airplanes, but with an army of workers to develop what are being called "free-trade zones" within the United States.

 

In an article published in the Idaho Statesman, Rocky Barker reported that officials of the China National Machinery Industry Corporation have suggested developing a technology zone occupying 10,000 to 30,000 acres south of the Boise airport for industry, retail centers and homes.

 

A key argument of "America for Sale: Fighting the New World Order, Surviving a Global Depression, and Preserving USA Sovereignty" is that China will not long continue to subsidize the Obama administration's trillion-dollar annual federal budget deficits without demanding U.S. assets in return.

 

"This ambitious, long-term proposal would start with a manufacturing and warehouse zone tied to the airport, and could signify a shift in the economic relationship between the two superpowers," Barker wrote.

 

Other Chinese companies are already active in Idaho, according to Barker.

 

* Hoku Materials Inc., a subsidiary of a Chinese energy firm, has 500 people building a $400 million plant to make polysilicon for solar panels, in Pocatello, Idaho; Hoku expects to begin production this year, employing 250 people;

 

* Simomach, China's third-largest contractor with more than $14 billion in sales last year, told Southeast Idaho Energy, which is planning to build a $2 billion fertilizer plant in Power County, it wants the contract for engineering, procurement and construction in the fertilizer plant; Southeast Idaho Energy plans to turn goal into gas to produce nitrogen fertilizer and sulfur, hiring 700 to 1,000 people during construction, with 150 permanent workers.

 

Simomach has sweetened the deal by offering to finance the development of the fertilizer plant with Chinese-government provided funds.

 

"Simomach officials met with Boise city and airport officials – including Mayor Dave Bieter – to discuss developing a first phase for the technology zone that would set up a base of operations for Chinese companies doing business in the United States," Barker reported.

 

Barker reported Simomach has also sent delegations to Ohio, Michigan and Pennsylvania to talk about setting up research and development bases and industrial parks.

 

Foreign-Trade Zones, or FTZs, designated throughout the U.S.

 

Quietly, the United States government has created 257 foreign trade zones, or FTZs, throughout the United States, designed to extend special U.S. customs treatment to U.S. plants engaged in international-trade-related activities.

 

The FTZs tend to be located near airports, with easy access into the continental NAFTA and WTO multi-modal transportation systems being created to move free-trade goods cheaply, quickly and efficiently throughout the continent of North America.

 

There is nothing in the U.S. government's description of FTZs that would prevent a foreign government, like China, from operating a shell U.S. company that is in reality owned and financed by the Chinese government and operated through a Chinese government-owned corporation.

 

China demands half in worldwide ventures of U.S. trade partners

 

China is demanding that U.S. companies wrap parts of their worldwide operations into new joint venture companies in which Chinese interests own 50 percent, as a condition of doing business with China, the Wall Street Journal reported.

 

The Journal noted that General Electric is finalizing plans for a 50-50 joint venture with a Chinese military-jet maker to produce avionics, the electronic components of aircraft.

 

In a similar deal, General Motors established a joint venture this year with SAIC Motor Corp., its longtime Chinese partner, to produce and sell micro-vans in emerging markets including India and Southeast Asia.

 

"To make the GE deal happen, GE Chief Executive Jeffrey Immelt made an extraordinary concession, agreeing to fold into the venture all of GE's existing world-wide business in nonmilitary avionics," the Wall Street Journal reported. "GM, in its deal, contributed technology, its manufacturing facilities in India and the use of its Chevrolet brand name in that market."

 

Along with the joint ventures, the participating Chinese companies get the full benefit of U.S. technological advances, which the Chinese are then able to use in other nonrelated business applications.

 

China leases oil rights in Texas

 

In October, China announced state-owned Chinese energy giant CNOOC is buying a multi-million dollar stake in 600,000 acres of South Texas oil and gas fields.

 

In her report, Monica Hatcher of the Houston Chronicle suggested China was "testing the political waters for further energy expansion into U.S. energy reserves."

 

That China is buying U.S. oil and natural gas rights in the continental United States will strike millions of Americans as paradoxical, especially since the U.S. continues to be a net importer of approximately 60 percent of the oil consumed in the United States.

 

The Houston Chronicle reported China paid $2.2 billion for a one-third stake in Chesapeake Energy assets, with CNOCC laying a claim to a share of the energy resources in South Texas that have the potential to produce up to half a million barrels of oil per day.

 

As part of this deal, CNOCC agreed to pay approximately $1.1 billion for a share of Chesapeake's assets in the Eagle Ford, described as a broad oil and gas formation that runs from the southwest of San Antonio to the Mexican border.

 

The Chronicle also reported that the deal with China could create as many as 20,000 jobs in the United States, as well as provide the capital Chesapeake needs to increase its rig count in South Texas from 10 rigs to 42 rigs by the end of 2012.

 

Five years ago, the Bush administration blocked China on grounds of national security concerns from a $18.4 billion deal in which China planned to purchase the California-based Unocal Corp.

 

China has the cash. U.S. corporations need the business. And the Obama administration has no plans to reverse the debtor relationship in which China has become one of the U.S. government's needed lenders.

[Guest EnronEx]

Good discussion. Here is a link to all the United States Foreign Trade Zones.

 

http://www.ia.ita.doc.gov/ftzpage/letters/ftzlist-map.html

 

[Guest Ron]

Capital flows to some larger emerging market economies—for example, Brazil, China, India,

Indonesia, Mexico, Peru, Poland, and Turkey––are all within the range of or above precrisis levels. The recovery has been led so far by portfolio and bank flows, with a falling share of foreign direct investment inflows. These developments mark a departure from earlier experience and may raise the risk of future instability, including capital outflows.

 

Dobbs and Spence (2011) argue that the global economy will soon have to cope with too little capital, not too much, as rapid urbanization in emerging and developing economies boosts demand for infrastructure, while demand rebalancing in China and demographic change in advanced economies lower the supply of savings.

 

Current account balances of key surplus economies—for example, China, Japan, and oil

exporters—have receded, as have those of deficit economies—for example, the United States, Spain, and eastern Europe. However, this has taken place mainly via declining demand growth in deficit economies rather than stronger demand growth in surplus economies.

 

The currency of China still appears substantially weaker than warranted by medium-term fundamentals.

 

Accumulation of official foreign exchange reserves in the major surplus economies presents an

important obstacle to global demand rebalancing. During 2008–10, surplus economies in Asia––

mostly China––used infl ows on current and private capital accounts to accumulate reserves

 

Although these economies understandably want to have an adequate buffer against the volatility of capital flows, a key motivation for the acquisition of foreign exchange reserves seems to be to prevent nominal exchange rate appreciation and preserve competitiveness.

 

During 2003–07, China contributed two-thirds of the increase in world consumption of aluminum and copper and almost all the increase in world consumption of lead, tin, and zinc.

 

Since 2008, China’s contribution has exceeded even net world consumption growth for all metals, with consumption of copper, lead, and nickel increasing by more than 50 percent. Reflecting this strong growth, China’s share in global base metal consumption has doubled to about 40 percent during the past 10 years

 

China’s metal consumption is currently higher than that of other countries at a similar stage of

development, likely refl ecting the exponential growth in its manufacturing sector over the past

two decades.

 

China’s metal consumption growth is expected to moderate during 2011 and subsequent years, given recent efforts to restrain bank lending and infrastructure investment and the potential

for a gradual rebalancing of the economy away from metal-intensive sources of growth.

 

The moderation in base metal consumption growth in China is expected to be partly off set by increased demand from advanced economies, where base metal consumption still is some 15 percent below precrisis levels despite ongoing recovery.

 

Demand growth in China is expected to moderate, but there is potential for upside surprises given continued large-scale infrastructure construction and public housing projects in the pipeline.

 

China as an importer in global grain markets, especially corn, after many years of self-sufficiency.

 

China remains the world’s largest oilseed importer by a large margin.

 

After growing by 10¼ percent in 2010, China’s growth is expected to remain robust at 9½ percent

this year and next, with the drivers of growth shifting increasingly from public to private demand. Consumption will be buttressed by rapid credit growth, supportive labor market conditions, and continued policy efforts to raise household disposable income.

 

China is now the largest energy consumer in the world (International Energy Agency—IEA, World Energy Outlook, 2010).

 

In China, price pressures that started in a narrow range of food products have broadened into other items, including housing, and inflation is projected to reach 5 percent this year.

 

http://www.imf.org/external/pubs/ft/weo/2011/01/pdf/text.pdf

[Guest Rodney Dunn]

I read this story. It is really sad.

 

http://caffertyfile.blogs.cnn.com/2011/04/25/what-does-it-mean-that-chinas-economy-could-surpass-u-s-s-in-5-years/

 

The year 2016… Mark your calendars.

 

It's the year the International Monetary Fund projects China's economy will overtake the U.S. economy. Or as Brett Arends, a columnist for MarketWatch writes, "The moment when the 'Age of America' will end." He says if the IMF is right, whoever wins the presidency in 2012 will be the last U.S. president to preside over the world's largest economy.

 

Kind of sad... and kind of scary.

[Guest HUMAN]

Obama Administration Votes Against England, Supporting Argentine-Backed Resolution on the Falkland Islands " http://www.openmarket.org/2011/06/10/obama-administration-votes-against-england-supporting-argentine-backed-resolution-on-the-falkland-islands/".

 

 

China in Latin America ARE Securing resources " http://seattletimes.nwsource.com/html/businesstechnology/2015279900_chinalatin12.

 

Now why is the Obama Administration helping China to defeat us? IT IS ECONOMIC AS WELL AS RESOURCE WARFARE.

[Guest HUMAN]

So why is this so important for the United States as well as Britain? 60 Billion Barrels of oil.

-----------------------------------------------------------------------------------------------------

Obama Administration Votes Against England, Supporting Argentine-Backed Resolution on the Falkland Islands " http://www.openmarket.org/2011/06/10/obama-administration-votes-against-england-supporting-argentine-backed-resolution-on-the-falkland-islands/".

 

 

China in Latin America ARE Securing resources " http://seattletimes.nwsource.com/html/businesstechnology/2015279900_chinalatin12.

 

Now why is the Obama Administration helping China to defeat us? IT IS ECONOMIC AS WELL AS RESOURCE WARFARE.

[Guest Fedup]

Obama Administration Votes Against England, Supporting Argentine-Backed Resolution on the Falkland Islands " http://www.openmarket.org/2011/06/10/obama-administration-votes-against-england-supporting-argentine-backed-resolution-on-the-falkland-islands/".

 

 

China in Latin America ARE Securing resources " http://seattletimes.nwsource.com/html/businesstechnology/2015279900_chinalatin12.

 

Now why is the Obama Administration helping China to defeat us? IT IS ECONOMIC AS WELL AS RESOURCE WARFARE.

 

The link does not work on the first one. We have known that China is making deals all over the hemisphere. This has been going on since 9/11.

[Guest August]

The United States is neutral, but favors negotiation between Argentina and the United Kingdom. I think we are looking to get some our companies working that huge oil deposit. The side that promises to do business with us will be the one we support.

 

Question of the Malvinas Islands

 

On the topic of the Malvinas Islands, the Minister of Foreign Affairs, International Trade, and Worship of Argentina, Héctor Timerman, asked the member countries to support Argentina's claim. He said that "at no time has Argentina failed to express its willingness to negotiate in search of a peaceful settlement to the dispute," but stated that, "unfortunately, Britain still declines to resume bilateral dialogue, in violation not only of repeated resolutions of the United Nations and this Organization." He then urged the member countries to support his country "with the conviction that your voice will have to be heard, because, in embracing this cause, you will be the voice of those who forged our history."

 

In their statements, the delegates of the member countries expressed their support to the Government of Argentina, endorsing "the legitimate rights of that country," and advocated a resumption of negotiations between the two countries involved in the prolonged dispute.

 

http://www.oas.org/e...Codigo=E-722/11

 

Members of the Legislative Assembly respond to the Organization of American States statement – regret but no surprise, and nothing new

 

The people of the Falkland Islands have a right to self-determination, enshrined in international law. We fully support the UK government's current resolute position, which confirms that the issue of sovereignty is non-negotiable. We seek nothing more than neighbourly relations with Argentina and regret that this issue should once again be raised on the regional stage. The OAS maintains a longstanding declaration on the Falkland Islands but we note that the wording in this year's declaration is the same as in previous years – it has not changed, and nor has anything else.

 

http://www.falklands...nd-nothing-new/

 

 

A North Sea oil and gas exploration rig is on its way from Scotland to the North Falkland Basin to explore reserves. Scientists believe that the territory could have up to 60 billion barrels of oil underneath its coastal waters.

 

Areas to the north and the south of the islands are being explored by four British companies – Rockhopper Exploration, Desire Petroleum, Falkland Oil and Gas and Borders and Southern Petroleum.

 

The estimated amount of oil has already led to the British financial sector pouring around £327 million into the off shore projects.

 

http://www.telegraph...sh-economy.html

[Luke_Wilbur]

Here is the link that Human gave.

 

Click Here

 

After reading this article I can believe that the British are worried about their control of the area. I also hope that negotiations can be done to avoid another conflict. The islanders should consider gaining independence from both sides. The oil reserve is huge. They should be the ones to benefit from it. But, we should be worried that China is making deals in an area that we used to control. Energy independence is still far off. We need all the oil we can get.

[Guest J.H. Murdick]

While protecting resources is very important, more than 60% of counterfeit goods seized by U.S. agents last year came from China, which has a sizeable pool of highly skilled labor and is increasingly the source of legitimate luxury goods manufacturing. Brand names are becoming less valued.

 

http://online.wsj.com/article/SB10001424052702304791204576401534146929212.html

 

To add to our nightmare, fake parts are starting to effect the safety of our armed forces.

 

http://www.dailytech.com/US+GOA+40+Percent+of+Defense+Supply+Chain+Damaged+by+Chinese+Parts/article21937.htm

[Guest SinoUSWatcher]

Former US Congressman Les AuCoin published a great article on China's rise and the future of the bilateral relationship. http://chinausfocus.com/foreign-policy/us-china-two-paths-to-the-future/

[Guest China Labor Watch]

There are fears in the United States that the soaring unemployment rates are in direct correlation with the rising dependency on China's manufacturing. Between 2001 and 2008, of the 2.4 million manufacturing jobs lost in America, China represented 70% of those displaced jobs. By taking over many companies' product innovation and manufacturing, China is now able to support many more middle class jobs that are being eradicated in the US. After 1997, significant numbers of manufacturing jobs collapsed due to the competitive advantage of cheap labor in China.

 

 

 

http://www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1102&MainCatID=&id=20110823000042

[Guest LAW]

Congresswoman Shelley Berkley today spoke on the House floor in support of legislation that will protect American jobs by targeting China’s continued manipulation of its currency. A transcript of her remarks appears below:

"Mr. Speaker, I rise today to talk about an issue that should be the top priority for every Member of the House and Senate. Jobs, jobs, jobs. Unfortunately too many of my colleagues here in Washington just don't get it.

"Yesterday the Senate courageously voted to stand up to the Chinese government on behalf of the working families in Nevada and across the country.

"The Senate said no to China's unfair currency manipulation that has cost our nation nearly three million jobs in the last 10 years, including over 14,000 in Nevada. However, 19 U.S. Senators voted to protect China's interests instead of the interests of the workers of the State of Nevada.

"I have one thing to say to those Senators, shame on you.

"Now is not the time to cower to bullying tactics of the Chinese. With unemployment in Nevada so high, we need leadership, we need to be creating jobs here in the United States of America, not in China.

"From voting to kill Medicare by turning it over to private insurance companies to bowing to Chinese bullying tactics, the American people should start asking themselves: when will Washington Republicans start making job creation their top priority? I know it is mine."

[Guest AAM]

A staggering 2.8 million jobs, largely in manufacturing, have been lost as a result of the growing U.S. trade deficit with China since that country’s entry into the World Trade Organization (WTO) in 2001, according to a study released last Fall by the Economic Policy Institute (EPI).

 

The growing U.S. trade deficit with China has cost jobs in every one of the nation’s congressional districts, the study reported, including the District of Columbia and Puerto Rico. Between 2001 and 2010, the computer and electronic parts industry was hit the hardest, as more than 909,400 jobs were displaced. The rapidly growing number of imports of computer and electronic parts, including semiconductors and audio-video equipment, accounted for more than 44 percent of the $194 billion increase in the U.S. trade deficit with China during that time.

 

The report, written by EPI’s Director of Trade and Manufacturing Policy Research Robert E. Scott, cites illegal currency manipulation as a major cause of the rapidly growing U.S. trade deficit with China. Unlike other currencies, the Chinese yuan does not fluctuate freely against the dollar, but is artificially pegged in order to boost China’s exports.

 

“This report offers conclusive evidence that immediate action by the Administration is needed to curb China’s currency manipulation, which, along with China’s blatant trade violations, are having the same devastating impact on high-tech production that they’ve already had on the nation’s longstanding industrial base,” said Scott Paul, executive director of the Alliance for American Manufacturing (AAM), a partnership of America’s leading manufacturers and the United Steelworkers union.

 

“And if President Obama won’t name China a currency manipulator,” Paul said, “then Congress will have no choice but to pass legislation that will hold them accountable.

 

“We urgently need a national strategy for restoring America’s global leadership in manufacturing,” he added. “Challenging China’s currency manipulation would be an important first step toward developing such a strategy. It would not only cut unemployment, it would result in a much-needed increase in federal revenue.”

 

The 10 states that suffered the biggest net losses were California (454,600 jobs), Texas (232,800), New York (161,400), Illinois (118,200), Florida (114,400), North Carolina (107,800), Pennsylvania (106,900), Ohio (103,500), Massachusetts (88,600) and Georgia (87,700). These losses comprise more than 2.2 percent of total employment.

 

“Global trade in advanced technology products—often discussed as a source of comparative advantage for the United States—is instead dominated by China,” the report concludes.

 

A total of 453,100 jobs were lost or displaced from 2008 to 2010 alone—even though imports from China and the rest of world collapsed in 2009 during the height of the global financial crisis. In fact, the report notes the U.S. trade deficit with China increased $8 billion during the great recession, despite a collapse in world trade at that time.

 

“The United States urgently needs more manufacturing jobs to put people back to work, but our out-of-control trade deficit with China makes that impossible,” said Paul. “Reducing our trade deficit and stopping China's unfair trade practices will grow jobs, lower our trade deficit and put the U.S. on a more sound fiscal footing.”

 

The report cited other industrial sectors hit hard due to the growth in the trade deficit with China between 2001 and 2010, including apparel and accessories (178,700 jobs), textile fabrics and products (92,300), fabricated metal products (123,900), plastic and rubber products (62,000), motor vehicles and parts (49,300), and miscellaneous manufactured goods (119,700).

 

China’s currency manipulation, state-owned enterprises, heavy industrial subsidies, intellectual property theft and piracy, indigenous innovation policies, rare earth mineral export restrictions and other trade-distorting practices have caused China’s share of the total U.S. non-oil goods trade deficit to soar from 69.6 percent in 2008 to 78.3 percent in 2010.

 

“Unless China raises the real value of the yuan by at least 28.5 percent and eliminates other trade distortions,” the report concludes, “the U.S. trade deficit and job losses will continue to grow rapidly.”