From the Readers

China may misunderstand the US

(chinadaily.com.cn)
Updated: 2010-06-18 16:39

Comment on "US 'wrong' to blame China for own woes" (China Daily, June 18)

There are a lot of problems with the argument this writer is trying to make. Many of the arguments are based on the writer's own misunderstanding of the US and the US economy.

First, the US is thought of as a destination for exports, not a supplier of imports. This pre-crisis mentality led to many nations putting high tariffs on US goods while the US administration, prior to Obama, kept low tariffs on goods from countries like China, Pakistan, India, and many South American countries. This led to a huge imbalance in trade, where companies would be set up in China just for exports to the US. This was mainly due to consumer advocacy groups in the US as well as US corporations pushing for low tariffs in order to line their own pockets. China has benefited from low tariffs in the US while they kept high tariffs on US goods. Now, it is time to change the situation. It would be better if China first lowers their tariffs on US goods, but they do not seem interested in doing that. So, the US is now taking measures to balance the trade, which the Chinese incorrectly label protectionism. Anti-protectionist policies, by definition, are not protectionist.

Second, the article itself mentioned a number of China's protectionist policies, including indigenous innovation. The article forgot to mention China's massive subsidies to exporters and also restrictions on imports of green energy products. The article itself says that China is a protectionist country, therefore the senators are not "China bashing." They are, in fact, speaking the truth.

The article also mentioned Germany doing well in their exports to China. However, the problem with that comparison is that Germany had trade relations in China long before many other nations did. Volkswagen is a good example. They were one of the first foreign car companies in China, and benefited from government relations. On the other side of the argument, China held in place tariffs on imported US cars and car parts for over 15 years, even after it entered the WTO. It is not a matter of understanding China; it is a matter of China discriminating against US businesses.

True, the US can do its part to fix the trade imbalance, including reducing restrictions on high-tech exports to China, increasing the savings rate in the US, and (like the author said) developing a productive export plan to the region. However, it is also true that China has discriminated against US businesses for far too long. If the US is to act on the issue, China needs to also act. If China truly seeks a "win-win" solution, they would take measures that increase dialogue and trade between the two countries. However, so far the Chinese have shown that they are only interested in the US lowering their trade barriers while the Chinese want to keep their own.

Robert, on China Daily Website