Playing the blame game
- By Chen Xiangyang
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E-mail Beijing Review, March 19, 2012
Accusations
The United States has long considered itself the rule maker for the world. American lawmakers often hold hearings on other countries' domestic affairs. The U.S. Government regularly releases reports on foreign governments' policies ranging from human rights and religious freedom to monetary policies. But more often than not, its accusations are invalid.
The United States has charged China with breaking international trade rules and dumping products in the United States at low prices. In February, the U.S. Government established the Interagency Trade Enforcement Center to cope with what U.S. officials see as unfair trade practices, including those by China. But WTO Director General Pascal Lamy said China has delivered an "A-plus performance" since entering the WTO in 2001.
"In the past 10 years, overall, China has applied the rules, although not 100 percent," Lamy said in a speech at Sichuan University in Chengdu in October 2011 during a tour of the southwestern city to attend the Western China International Fair.
China's entry into the WTO has resulted in "a win-win situation where China has received a lot from international trade and other WTO members have also got a lot from the opening of China," he said.
While China honors its commitments to the WTO, the United States often resorts to trade protectionism. It imposed a punitive anti-dumping tariff on Chinese tires in 2009 and is deliberating countervailing measures against solar cell imports from China. The U.S. Government also poses barriers for Chinese companies' investments and acquisitions in the United States. Last year, it blocked Chinese telecom firm Huawei's acquisition of U.S. server technology company 3Leaf Systems for national security concerns.
The United States claims that China keeps the exchange rate of the yuan at an artificially low level to run a trade surplus. However, as China's foreign trade becomes increasingly balanced, the accusation drifts farther from reality. A report of The Wall Street Journal in February said China's current account surplus for 2011 shrank to around 2.7 percent of GDP according to government data released, the lowest ratio since 2003. It is also below the 4-percent level suggested by the U.S. Treasury Secretary as a sign of an undervalued currency. The yuan has risen 31 percent against the U.S. dollar since June 2005, close to the 40-percent appreciation often demanded by U.S. lawmakers. Since June 2010, when China said it would let the yuan move more freely, it has gained 8 percent, and factoring in inflation the rise is even higher.
The United States has also fired harsh rhetoric at China as an increasing number of Chinese companies establish a presence overseas. U.S. Secretary of State Hillary Clinton warned during a trip to Africa in June 2011 that Chinese investors may undermine good governance in Africa. She has recently called for "jobs diplomacy" in a bid to support U.S. businesses in the face of competition from China.
It is only natural for powerful Chinese companies to explore international markets for more business opportunities. At the end of 2011, there were about 18,000 Chinese companies overseas with total assets surpassing $1.5 trillion. Unlike what Clinton said, the companies have brought practical benefits to local governments and residents, including increased employment and tax revenues, improvements in living conditions as well as a boost to economic growth.
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