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Pressure rises on Bush to curb China imports
(chinadaily.com.cn)
Updated: 2006-03-10 11:28
The US Congress is increasing pressure on the Bush administration to toughen
its stance on Beijing's trade practices in the lead up to President Hu Jintao's
Washington visit late next month.
The slower than hoped for rise of the Chinese yuan against the US dollar is a
particualar cause for concern.
The US Commerce Department reported Thursday that its trade deficit with
other countries is continuing to climb, leaping to US$68.5 billion in January,
5.3 percent higher than in December.
In January's trade figures the US-China deficit jumped by 9.9 percent, to
about US$17 billion. The deficit with Canada, America's largest trade
partner,increased by 11.1 percent, and the US-India deficit shot up 61.3
percent.
New York Democrat Senator Charles Schume is pushing legislation that would
impose a tariff of 27.5 percent on all Chinese imports unless China allows the
yuan to appreciate considerably. His proposal has attracted Senate support.
According to analysts, President Bush is likely to veto any such legislation.
But Schumer is confident that his proposal would gain enough votes to override a
presidential veto.
US lawmakers from states with major agriculture
industries have long been the most reliable supporters of trade with China,
viewing China as a large and expanding market for American-grown food.
Despite China's official statistics showing a 2005 US trade surplus of US$114
billion, trade officials say China is not deliberately pursuing a trade surplus
with the United States but rather a balance in imports and exports.
On July 21 last year, China's central bank, the People's Bank of China,
raised the value of the yuan against the US dollar by 2.1% and adopted a
market-sensitive currency exchange policy. The policy allows the yuan's daily
rate to float in line with major world currency changes. The yuan has since
climbed 1 percent against the US dollar.
Li Zhaoxing, China's Foreign Affairs Minister, said Tuesday China not only
wants to import American Boeing planes, grain, citrus and other fruit, it also
wants to import high-value, high-tech computers and equipment. America has
refused to export such items to China since 1989, citing national security
reasons. Li noted inexpensive Chinese goods have helped America maintain high
living standards and helped reduce inflationary pressures.
Some American economists have blamed the American enlarging deficit on
American consumerism.
R. Glenn Hubbard, former chairman of the Council of Economic Advisers to the
White House and now the dean of Columbia Business School, told the New York
Times that even a sharp revaluation of the yuan by 15 percent or 20 percent
might not make much of a difference in the overall trade deficit of the United
States as long as the United States has a very low savings rate.
"If we don't have a deficit with China," he said, "we'll have a deficit with
someone else."
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