China becoming scapegoat of U.S. ills
By Ken Moritsugu
Knight Ridder News Service
WASHINGTON — From Capitol Hill to the factory floor, China increasingly is being blamed for America's economic woes.
A dozen senators signed on to a bill this month that could slap a 27.5 percent tariff on Chinese imports if it becomes law. Lawmakers and manufacturing lobbyists called this week for the use of tough U.S. trade laws to pressure China.
At issue is a sharp rise in imports from China. The United States imported $125 billion in goods and services from China last year, while exporting $22 billion worth to China. With the U.S. economy losing jobs, the surge in imports has propelled trade with China into the congressional spotlight.
"I am astounded at the speed with which this issue has become a central issue," said Jerry Jasinowski, the president of the Washington-based National Association of Manufacturers, the nation's largest industrial trade association.
Many economists say it's wrong to use China as a scapegoat. They argue that China provides a huge market opportunity for U.S. companies and has made considerable progress in opening its markets. Many of the jobs in China are ones that America lost years ago to countries such as Malaysia and Mexico, they say.
And, they note, the main reason that Chinese exports are growing so rapidly is that U.S. and other foreign companies are building factories in China to take advantage of its lower costs and remain competitive in a global economy.
"The power of the Chinese export machine is more traceable to us than it is to them," Stephen Roach, the chief economist at the Morgan Stanley investment bank in New York, wrote this week in testimony for the congressionally appointed U.S.-China Economic and Security Review Commission.
In addition, China is the fastest-growing large export market for U.S. companies.
But the overseas success of major corporations doesn't do much for lawmakers from industrial states who are worried about jobs for their constituents.
"We have to look after ourselves," Rep. Donald Manzullo, R-Ill., chairman of the House of Representatives Small Business Committee, told the commission at a hearing Thursday. "I'm just tired of American economists taking the Chinese perspective."
The debate reflects a divide between the winners and losers in the global economy. Bigger companies that have been operating overseas for decades are better able to remain competitive. Innovative small companies can succeed, but those stuck in their ways will struggle. The same applies to factory workers: Those who can learn new skills will be the survivors.
China is just one part of this global economic transformation, but it's a natural target for attacks because of its huge size.
The Bush administration is pressuring gently China on trade, but so far has resisted the tougher measures that some in Congress advocate.
