Nov. 19, 2003
American businessmen and farmers are finally waking up to how they
were sold a bill of goods by those who promised that China would be a
profitable billion-mouth market if we just gave that developing country
Most Favored Nation trade privileges and assisted its admission into
the World Trade Organization (WTO). Like Claude Rains in "Casablanca,"
the Bush Administration is "shocked, shocked" to discover that
Communists don't play by the rules or keep their promises.
Chinese behavior is so blatant that U.S. Secretary of Commerce
Donald Evans just went to Beijing for a week's visit to complain about
China's trade policies in undiplomatically blunt terms. He chided the
Chinese for failing to live up to their market-opening commitments made
in December 2001 when China joined the WTO.
"Time is running out," Evans said. "We need to see results. . . .
We have been patient, but our patience is wearing thin." Evans even
warned that China's exports might be threatened by hardening
protectionist sentiment in the United States.
In September, the Bush Administration announced the creation of a
new Unfair Trade Practices Team in the Commerce Department to address
trade barriers that are costing American jobs. The United States has
lost 2.6 million manufacturing jobs since George W. Bush became
American manufacturers are complaining that China keeps its
exports to the United States low-priced, and its imports from the U.S.
high-priced, by artificially undervaluing Chinese currency up to 40
percent. China's excuse for this currency manipulation is that its
banks have too many bad loans to allow money to move freely.
Evans' rhetoric about China's refusal to open its markets had been
accelerating even before his trip to China. He told the Economic Club
of Detroit in September, "That's not a pretty picture."
In particular, Bush officials are demanding that China clamp down
on counterfeiting and piracy of American films, software and other U.S.
products. The Bush Administration is pressing for greater access to
Chinese markets for U.S. companies and an end to subsidies for
unprofitable state-owned companies.
Trying to criticize China's uncooperative behavior while keeping
faith with free-trade dogma, Evans said, "American manufacturers can
compete against any country's white collars and blue collars but we
will not submit to competing against another country's choke collars."
Evans admitted to the Detroit Club that U.S. manufacturers are
complaining about "rampant piracy of intellectual property, forced
transfer of technology from firms launching joint ventures in China,
trade barriers and capital markets that are largely insulated from
As an example, Evans told how the Chinese steal Wrigley's
copyrights. China sells pirated chewing gum, copies the design of the
Wrigley distribution trucks and drives them over the very same routes.
Some of China's behavior is much more dangerous than refusing to
buy our chewing gum. The Commerce Department says that Chinese
companies refuse to cooperate in allowing checks on whether American
dual-use goods sold to Beijing are diverted to military purposes.
Under Secretary Kenneth R. Juster said that we conduct such "end-
use" verification visits without any difficulties in over 85 countries,
but China restricts our ability to carry out this routine activity. He
said that "exports to China of licensed goods that have military
applications have increased sharply."
Last year, China bought $2.8 billion worth of goods that have both
civilian and military applications. That's up from $515 million in
It's no secret that China wants America's sensitive defense
technology, cutting-edge computer software, and scientific research of
all kinds. The FBI reported in August that China has more than 3,000
"front" companies in the United States whose real purpose is to use
thousands of Chinese business and student visitors to carry out
espionage tasks for the Chinese government.
The FBI ranks Communist China as the greatest espionage threat to
the United States over the next 10 to 15 years. Director Robert
Mueller told Congress that this situation can "greatly undermine U.S.
national security and U.S. military and economic advantage."
China is saying that it plans to buy more goods from the United
States. But don't look for Wal-Mart to start selling made-in-America
goods in China.
When Evans was in Beijing this month, China staged a ceremonial
signing of contracts to buy $100 Million worth of U.S. rail equipment.
That's just 1/10th of one percent of our trade deficit with China now
running at $120 Billion.
Most of that deficit is the result of the movement of U.S.
manufacturing plants and jobs to China. Labor costs are so much
cheaper when U.S. businesses can hire slave labor managed by Communist
I wonder if the 2.6 million Americans who lost their jobs think
that the global economy is worth the price.