US gearing up for trade war with China?
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People's Daily, November 2, 2011
The U.S. House Ways and Means Committee recently held a hearing on China-U.S. trade relations. At the hearing, the RMB exchange rate issue again became the focus of intense debate, and certain Congress members even threatened a trade war with China.
The long-running RMB exchange rate issue has been central to Washington's most recent political struggles since the U.S. Senate passed the Currency Exchange Rate Oversight Reform Act of 2011 on Oct. 11.
In order to win the 2012 presidential election, presidential candidates of both the Republican and Democratic parties are competing to show off their tough stance. Former Massachusetts Governor Mitt Romney, who is regarded as the Republican Party’s frontrunner for the 2012 presidential race, promises to designate China as a currency manipulator if he is elected to the presidency.
Demetrios Marantis, deputy U.S. trade representative, said that since China joined the World Trade Organization, the U.S. exports to China have been growing faster than its exports to any other country, making China the third biggest export market of the United States, only after Canada and Mexico. Moreover, the United States sold 113 billion U.S. dollars worth of products and services to China in 2010.
The U.S. Department of Commerce has estimated that every 1 billion U.S. dollars worth of goods exports can create 6,000 job opportunities for the United States and China’s continued rapid economic growth will undoubtedly bring the United States more job opportunities. U.S. President Barack Obama once said that the success of one country should not be at the price of other countries, and they could achieve win-win results. Marantis noted that the precondition for the United States and China to achieve win-win results is that both must reach a strong consensus on challenges and opportunities in their bilateral ties and work together to deal with them.
Speaker of the US House of Representatives John Boehner recently reaffirmed his opposition to the bill passed by the Senate on China's alleged RMB exchange rate manipulation and stressed that it would be "a very dangerous policy." Boehner said that Obama ought to "stand up and take a position" in terms of the RMB exchange rate issue.
Former U.S. Treasury Secretary Henry Paulson recently said in Washington D.C. that it was not a right approach to threaten other countries through legislation. He said that the United States and China are two major engines of the world and the exchange rate issue is a sensitive political and trade topic rather than the greatest cause behind the huge deficits between the United States and China. He stressed that the two countries should continue to explore a mutually beneficial and win-win strategy to expand the economic cake, which is just the right approach to benefit the people of the two countries and the world economy.
