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US losing cool is no way to solve problems

By Yuan Peng (China Daily)
Updated: 2007-04-04 08:56

In fact, what is really behind the US Congress' repeated pestering and Washington's punitive measures is the erroneous interpretation of the development of Sino-US trade ties, its ultra-alarmist response to the growth of China's economic strength, and its attempt to shirk responsibility for failing to make correct policy adjustments.

Three trends in China's economic development in recent years have made the US uneasy. The first is the US trade deficit with China reaching $232.5 billion, accounting for 30 percent of the country's total trade deficit. The second is China's foreign currency reserve exceeding $1 trillion as it holds nearly $300 billion worth of US treasury bonds. The third is the heavy impact on the New York Stock Exchange of the Shanghai stock market's sharp drop on February 28.

Faced with these numbers and facts, few US lawmakers looked for the causes in the fact that American consumers prefer spending to saving and that Washington had lost many opportunities to rebalance bilateral trade because of its insistence on over-politicizing bilateral trade ties, always blaming China. The lawmakers are only too ready to accuse China rather than search for ways to improve US competitiveness.

As China-US economic and trade relations become more mutually dependent, an increase in trade disputes, frictions and even conflicts will occur. This is a normal and natural process. Since China-US trade suffers from structural defects, it would be unrealistic to expect to cure all with one quick fix.

The establishment of the China-US Joint Committee on Economy and Trade and strategic dialogue on the economy were meant to limit friction and resolve differences. Rational dialogue was seen as the way to make bilateral economic and trade ties healthier and more stable. Losing one's cool and jumping to retaliation just because one round of talks failed to solve the problem will only damage normal bilateral trade relations and oneself.

(China Daily 04/04/2007 page10)


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