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Hu in Canada: Will he be part of global economy's solution or remain the problem?

When Chinese president Hu <font class="matchSearch"><font class="matchSearch">Jintao</font></font>arrives in Canada on Wednesday on a rare state visit in advance of theweekend's G20 summit, he will witness something he rarely if ever seesin his homeland - protesters.

When Chinese president Hu Jintao
arrives in Canada on Wednesday on a rare state visit in advance of the
weekend's G20 summit, he will witness something he rarely if ever sees
in his homeland - protesters.

A posse of human rights advocates,
from Amnesty International, to the Falun Dafa group, to free Tibet
supporters, will follow his every appearance, and serenade him outside
his hotel in downtown Ottawa.


China is emerging as an economic
and political superpower, says Alex Neve of Amnesty International
Canada, and it's time the country started behaving that way.


At
a news conference Tuesday, Neve and representatives of three other
advocacy groups recited a litany of Chinese transgressions, from
religious and ethnic repression, to the jailing of dissidents and their
lawyers, to the appalling conditions under which many Chinese work, and
worse.


“How can the dictator get away with it, and the world
pretend this is not happening? We have to raise awareness,” said Lucy
Zhou of the Falun Dafa association.


Hu will hear pressing
concerns of another sort behind the barricades of the G20 summit in
Toronto later in the week as his fellow club members try to persuade
him that China needs to play a more constructive role in rebuilding the
global economy.


The key issue on the table for most of the
leaders is not democracy or humans rights, but whether China's
export-driven currency policies can be changed sufficiently to address
what many consider the key stumbling block to a sustained global
recovery.


In essence, critics say China exports too much to
others, particularly the United States, but also Europe and Canada, and
buys too little. That creates an imbalance that if left unchecked will
bankrupt the West as well as cause massive joblessness as production
heads east.


Sensing trouble, Chinese officials last week at
first attempted to circumvent discussions on the yuan by trooping out
officials to declare that the currency issue was an internal matter, so
butt out, world.


When that didn't work, China announced Sunday
it was willing to introduce more flexibility in the yuan to allow it to
appreciate.


But few were taking the Chinese entirely at their
word. Both Prime Minister Stephen Harper and Finance Minister Jim
Flaherty said Hu would be pressed for details at the summit.


There
was also some praise for China from Harper, however, that signalled a
new era of Sino-Canadian relations - at least under the current
Conservative government - had begun.


“The Chinese have been very
helpful in this crisis,” Harper said in an interview with Bloomberg
news service distributed by his office. “China is increasingly assuming
a broader view of its own interests in the world.”


Hu's visit,
the first to Canada since 2005, is the flip side of Harper's
ice-breaker to China last December, highlighted by a public rebuke of
the prime minister for not having paid proper heed to China's growing
importance.


It is unlikely Harper will return the undiplomatic
slap, especially when so much is desired from China by Canadian
businesses who see the emerging market as a lifeline given the decline
in the American economy.


But whether China is really moving toward a new collaborative relationship with the West remains to be seen, say analysts.


Peter
Morici, a University of Maryland business professor and former chief
economist at the U.S. International Trade Commission, has little faith
that China will allow more than a minor appreciation of the yuan, in
the range of about five per cent. In reality, he says, the currency is
undervalued by about 50 per cent.


The only measure that will work, he argues, is if Washington slaps an equivalent tax on currency conversions.


“Don't
tell me that would set off a trade war, we are in a trade war right
now,” he says. “The entire mid-West is crumbling. You don't think we're
in a trade war when China is subsidizing its exports into Canada at the
rate of 50 per cent and Ontario manufacturers can't grow?”


Morici is among China's harshest and most persistent critics and has seen his views gain acceptance in the U.S. Congress.


Last
week, House Ways and Means chairman Sander Levin, a Michigan Democrat,
put it bluntly. “If China does not act (at the G20) and the
administration does not respond promptly thereafter, the Congress will
act,” he said.


The anger may be understandable in a country that
has suffered the loss of 8.5 million jobs in the past two years, but
blaming China's yuan is simplistic, says Peter Harder, a former deputy
minister of foreign affairs in Ottawa, who is currently president of
the Canada China Business Council.


Global imbalances must be
addressed, he agrees, but it's a two-way street. The U.S. must address
its own self-created imbalances, including Washington's ballooning debt.


Harder
adds it is critical that China not be isolated at a time when the
country is increasingly being seen as a key to a wide range of global
issues, from economic growth to security to nuclear proliferation.


Many
believe China has already come to the realization it needs to make its
domestic-demand economy as vibrant as its export-based factories.


Allowing
the press recently to report on strikes and labour unrest is sending a
signal Beijing wants to grow wages to boost the domestic economy, says
Wendy Dobson, director of the Institute for International Business at
the Rotman School of Management in Toronto.


“It isn't just
appreciation of the yuan, China needs to rebalance its economy for its
own long-term interests,” says Dobson. “It's part of their last
five-year plan and it'll be part of the next one, to pull back
investment-driven growth to a model that requires more household
spending and more domestic consumption.”


Dobson says China needs
time to change. But Amnesty International's Neve cautions that the West
also needs to keep applying the pressure for that to occur.

 
 
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