The more things change, the more they stay the same.
The U.S.-China Economic and Security Review Commission submitted its annual report to Congress last week. It’s a scathing review of our economic relationship with China. To no one’s surprise here at the Alliance for American Manufacturing (AAM), it seems our trading relationship with the world’s second largest economy only worsened in 2014.
And it seems both governments are relying on lip service over action.
China’s leaders, namely President Xi Jinping, promised to reform its economic practices to ones based on domestic consumption rather than fixed investment and exports. In 2014, the country did more of the same.
The [Chinese] government continued to subsidize favored industries and maintain an artificially low value of the renminbi in order to boost exports and inhibit imports. — USCC 2014 Report to Congress
Take a look at the statistics:
- Despite U.S. exports to China growing by 6.2 percent, our trade deficit has grown faster.
- In the first eight months of 2014 as the U.S.-China goods trade deficit grew by 4.1 percent (compared to 2013).
- China exports nearly four dollars’ worth of goods to the United States for every dollar’s worth of imports it purchased from the United States.
Earlier this month, President Obama visited China on the heels of the highest monthly trade deficit on record with China. This also took place after the administration declined for the 12th time to name China a currency manipulator in Treasury’s semi-annual exchange rate report.
Needless to say, it’s time for action.