China is once again the country the U.S. Congress loves to hate.
After a lull last year, U.S. politicians jockeying ahead of crucial November elections have stepped up attacks on China as a way to win support from voters worried that the Asian power is taking American jobs.
China-bashing eased during President Barack Obama's first year in office, partly as a nod to the administration's attempts to get Chinese help settling nuclear standoffs with North Korea and Iran and important environmental and economic initiatives.
Now with little to show from Obama's charm offensive and a looming make-or-break election, lawmakers want tough action against what manufacturers say is a Chinese currency policy that hurts millions of American workers by making Chinese products cheaper and U.S. products more expensive.
In the latest example of seeking a more forceful approach to China, four senators on Monday sent Obama a letter urging him against giving Beijing special treatment in Iran sanctions legislation that the House and Senate are now putting together.
The letter was in response to reports that the administration, now trying to get China and other U.N. Security Council to go along with a new round of international sanctions against Iran, wanted to exempt the five permanent members of the Security Council from legislation being crafted by Congress.
China, one of the five, is a main investor in Iran's energy sector and “such exemptions would also make it easier for countries like China to undermine international efforts to sanction companies that support key sectors of Iran's economy,” wrote Sens. Charles Schumer and Barbara Mikulski, both Democrats, and Jon Kyl and Richard Burr, both Republicans.
U.S.-China ties are already battered following the recent announcement of a multibillion dollar U.S. arms sale to Chinese rival Taiwan and a meeting between Obama and the Dalai Lama, revered by millions but accused by Beijing of pushing for Tibetan independence. Attacks on China might add more irritation to a relationship the White House portrays as the world's most important, and most complicated.
U.S. politicians, however, have calculated that raising China as an economic boogeyman can help them connect with voters afraid of losing work to foreign competitors.
“They take our markets and take our jobs,” Democratic Sen. Arlen Specter said of China when he confronted Obama at a public meeting last month. Specter, who is in a tough primary race in the industrial state of Pennsylvania, said Chinese subsidies and what he called dumping are “a form of international banditry.”
China bristles at U.S. complaints.
Wang Baodong, spokesman for the Chinese Embassy in Washington, said his country's currency policies “are above blame.” He urged Americans to make a “fair and objective assessment on this and not mix things up with domestic politics.”
Despite the anger in Congress and Beijing's furious reaction over the Taiwan arms sale and the Dalai Lama, China appears eager to ease tensions with Washington.
For instance, China recently allowed five American warships to dock for a port call in Hong Kong. China also announced last week a 7.5 per cent increase in military spending, the lowest level in more than 20 years.
The Chinese Embassy has also expressed confidence that its lobbying efforts can help U.S. lawmakers recognize that the two countries have common interests more important than their divisions.
In tough economic times, U.S. lawmakers often lock onto a foreign country they can blame. In the 1980s and 90s, it was Japan. Over the last decade, China has become a reliable punching bag, especially during election season. As China continues to boom and America continues to hurt, the congressional urge to punish Beijing will grow.
“There's nothing off limits when election-time comes around, and China makes themselves an easy target,” Ralph Cossa, president of the Pacific Forum CSIS think-tank , said.
Lawmakers have called on Obama to investigate China's currency practices and have advocated penalty tariffs on Chinese imports if Beijing doesn't make changes.
Obama has responded by vowing to get tough with China, saying that currency manipulation “puts us at a huge competitive disadvantage” and pushing for Chinese movement “to a more market-oriented exchange rate.”
Lawmakers will want to see action to back up those words. So far, however, Obama has followed the Bush administration's lead by declining to name China as a country that manipulates its currency to gain unfair trade advantages. Such a designation would trigger negotiations and could lead to economic sanctions if the United States took a case before the World Trade Organization. Congress will be watching closely next month, when the Obama administration must submit another report on Chinese currency manipulation.
Beijing broke its currency's link to the U.S. dollar in 2005 and allowed it to rise by about 20 per cent through late 2008. But it has been frozen since then in what was seen as an effort by Beijing to keep its exporters competitive as global demand plunged.
China once was able to count on U.S. business leaders to support economic engagement in booming China and to urge Congress to avoid protectionist measures, Michael Green, an Asia adviser for the Bush administration, said.
“That unanimity is starting to crack,” Green said.
China is once again the country the U.S. Congress loves to hate.
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