News Center
The China Question
By Scott Paul
Published in the April 14, 2008 Pittsburgh Post Gazette
Every day, America sends the equivalent of $700 million to China. That’s the toll of our imbalanced trade relationship with the regime in Beijing. We ship our manufacturing jobs, consumer dollars, and technological know-how to China. In return, we receive low-cost, under-inspected, and, all too often, unsafe consumer products.
China uses its $256 billion annual trade surplus with the U.S. to fund weapons programs aimed at challenging U.S. military supremacy in the Pacific, build a new electronic “Great Firewall” that limits free speech and dissent, and crush Tibetans who seek to preserve their culture and religion. A small portion of that low, low price you pay at the big box store for a DVD player or pair of pants makes its way back to the communist regime’s coffers, which are now filled with more than $1.4 trillion in foreign currency.
The recent crackdown in Tibet shows just how wrong those pundits and politicians really are who claimed that more trade will open China. As a Senate candidate in 2000, Hillary Clinton supported granting China permanent, unconditional access to the U.S. market, citing its potential for opening China to greater rights. Senator John McCain voted for the bill, which was championed by President Bill Clinton. Barack Obama claims he would have voted against this bill had he been a Senator at the time; only seven Senate Democrats actually did.
Never have so many Senators—83 in all voted for the China trade bill—been so wrong. No one can plausibly make the argument that democracy and human rights are improving in China. No one can credibly make the case that our commercial relations with China have benefited the vast majority of American workers and businesses. China is now the largest unsolved international economic question of our time. So what can be done?
We can start by lowering our record trade deficit with China by addressing currency, subsidy, and dumping issues. China should stop manipulating its currency to gain a trade advantage. It promised to end the practice when it joined the World Trade Organization. At a time when the dollar has plunged against other major currencies, it has adjusted only nominally against the Chinese yuan. The Administration could name China as a currency manipulator, triggering a serious negotiation and revaluation, or bring a WTO case against China. It has done neither. The Congress could pass strong anti-manipulation legislation, but it has refused to act.
China must also stop its subsidies, which gives its industries an unfair advantage over American firms. In the steel industry alone, we estimate that Chinese firms have collected nearly $27 billion in energy subsidies since 2001. These subsidies distort the market, cause harm to American workers and businesses, and are violations of China’s trade obligations. We can all benefit from trade, but only if there is a level playing field. Until China stops its subsidies, we’ll never get there.
China cheats in other ways, as well. It dumps some of its products into our market, causing harm to Americans who make everything from paint brushes to hammers, paper clips to industrial bearings, and tissue paper to steel. China has been cited repeatedly for theft of intellectual property and for producing counterfeit goods. All too often, China merely receives a verbal chiding for this scandalous behavior.
The Democratic Congress and Republican Administration have the power to stand up for American workers and businesses, but so far they have refused to act. China would never risk access to our market if we were willing to make such access conditional on an end to cheating. But Washington is not willing to get tough, at least not yet.
In Pennsylvania, this issue is critical. Pennsylvania has shed 78,000 jobs due to our trade deficit with China. More than 207,000 manufacturing jobs have left the Keystone State since 2000. Manufacturing in Pennsylvania can be internationally competitive; it is still the largest contributor to Pennsylvania’s economy. But if we continue to allow China to cheat, more good jobs, hopes, and dreams will be leaving the Keystone State.
Pennsylvania voters have the power to change this equation. The presidential candidates need your vote to win this month and again in November. So ask them the tough questions, and demand answers. Ask them how we can make sure these new “green jobs” they promise won’t be outsourced to China. Ask them if they will make the tough decisions necessary to enforce our trade laws and defend our workers and domestic industries.
Scott Paul is executive director of the Alliance for American Manufacturing (AAM), a joint partnership of several leading U.S. manufacturers and the United Steelworkers.
