China is both an opportunity and an obstacle when it comes to our economy and American jobs. While the Chinese market is a large and rapidly growing destination for U.S. exports, China willfully disregards its international obligations and impedes fair commerce.
Despite benefitting significantly from globalization and a more integrated global economy, China remains stubbornly closed to U.S. companies, farmers, ranchers, and workers. The list of China’s trade abuses is long. The record shows that China blatantly steals the intellectual property of American businesses, grossly subsidizes domestic industries, prevents U.S. farmers and ranchers from exporting through discriminatory regulations and practices that are not based upon science or international standards, blocks exports of rare earth minerals, and intervenes in its currency market, resulting in misalignment.
China has an important role to play in restoring global economic growth. To do so, China must more rapidly rebalance its economy away from export-led growth. This means sustaining meaningful RMB appreciation of its currency and complying with its obligations and commitments to open its the Chinese markets to U.S. exports of goods and services.
Yet some in Congress focus on legislation to address currency manipulation as if it were a silver bullet. In doing so, they miss the many issues we have with China. I look forward to hearing from our two administration witnesses today about the full set of economic issues we face in dealing with China, including currency, and what the Administration is doing and what Congress should and should not do with regard to our economic relationship with China.
There is widespread agreement that part of our China strategy must include resumption of our bilateral investment treaty negotiations. Last year, Secretary Geithner testified before this Committee that he was “very much in favor of moving forward, and I think these agreements have a very good record of protecting the interests of U.S. companies and workers, and it would be good to put one in place with China.”
A year later, the Administration’s lack of action is perplexing. China has more than 70 BITs in place, including with many of our competitors. The EU recently announced that it would negotiate its own investment agreement with China. But the Administration has been unable to
form its negotiating position, allowing special interests to hamstring our ability to create jobs. I expect to hear from the Administration today about when it intends to resume negotiations.
At the same time, I applaud USTR for its recent actions. Two weeks ago, the United States availed itself of WTO procedures to “counter-notify” over 200 Chinese subsidies to the WTO, an important action that calls China out for its malfeasance. I hope this is just the beginning of USTR’s actions on such subsidies. Furthermore, last week USTR again utilized the WTO to publicly press China on its internet censorship and restrictions, which create significant barriers to U.S. services trade. And last month, the Administration filed another dispute settlement case at the WTO.
I look forward to hearing from the Administration about its efforts in the Strategic and Economic Dialogue (S&ED) and the Joint Commission on Commerce and Trade (JCCT). Those forums have been important avenues for addressing Chinese practices. In fact, in conjunction with last May’s S&ED, I hosted a meeting between Ways & Means Committee Members and a delegation of senior Chinese officials, led by Vice Premier Wang – China’s chief international economic official. Our Members raised many of these important issues directly with the Chinese officials. And we will continue to raise them at every juncture.
As the Administration continues to engage with China through the S&ED and the JCCT, it must pay more attention to tracking China’s commitments and ensuring proper follow-through to implement them. In addition, I remain concerned that the Administration is using the wrong metrics to measure progress. We must measure success not just in the number of laws and regulations overturned, but whether removing these policies will actually be effective and create new U.S. sales and jobs. I know this is a bipartisan concern.
Looking forward, the Administration must aggressively pursue WTO violations when they occur. While we should not hesitate to confront China directly, the Administration should also build strong coalitions to ensure maximum pressure and meaningful change.