Thank you, Chairman Levin.
I believe there is a clear and unified message this Committee and this Congress would like to send to China, and it is this: China is not acting in good faith and is aggressively engaged in a series of troubling and downright protectionist policies that put our economic relationship at risk. Unless China immediately begins to eliminate trade barriers and end its policies of economic nationalism by opening its market to American-made goods and services, it could spur a breakdown in our relationship that will wreak havoc on both our countries and the global economy.
From the blatant disregard of intellectual property rights to the erection of non-tariff barriers that make it hard for American companies and their workers to sell their goods and services in China, American families and employers understandably find it difficult to trust China. Allowing China to run roughshod over us, however, is not an option. It is in our best interest, and that of the global economy, for us to find a path forward.
In light of the significant changes in the global economy and the acceleration of Chinese economic aggressiveness, I want to explore with the Administration whether enough is being done to push China. Mr. Chairman, I strongly urge you to ask the Administration to appear before us so we can continue this discussion.
It is my hope that our witnesses today will clearly spell out China’s most egregious trade barriers, giving both the Chinese and our own policy makers metrics by which to measure future progress.
For example, the “indigenous innovation” policy provides a huge leg-up to Chinese companies. I recognize that some in China are reevaluating the mechanics of this policy, and I appreciate that, but the bottom line is that China seems intent on giving home-grown products distinct advantages over products made by American workers. This is a subsidy plain and simple, and we need to deal with it directly.
Furthermore, China has implemented predatory export restraints on raw materials to artificially lower the price of inputs for Chinese manufacturers while increasing the price, also artificially, for the same inputs outside of China. The result necessarily favors the Chinese companies and discriminates against us.
And, as I alluded to, China’s intellectual property rights regime and enforcement are still woefully inadequate. The massive levels of piracy cannot continue. This theft costs us billions of dollars and thousands of American jobs. China’s repeated promises to fix this are ringing more and more hollow by the day, as this situation has only grown worse.
The list of China’s protectionist policies goes on and on, and we must make it clear that we will not sit idly by and let them engage in these discriminatory trade practices. Our response should include aggressive pursuit of WTO violations as well as resuscitating the bilateral investment negotiations begun with China several years ago. Such an agreement would give Americans considerably more rights in China and a dispute resolution mechanism with real teeth to protect U.S. jobs. China has 70 bilateral investment treaties in place – so 70 countries have greater rights in China than we do. That is simply unacceptable.
In addition, further steps should be taken to compel our trading partners to engage with us in a cohesive front against Chinese policies. We can and must be firm, unequivocal, and direct with the Chinese on the points of friction in our bilateral economic relationship – and our trading partners should join us. My experience tells me that unified multilateral pressure is not only the most effective way but sometimes the only way to address underlying problems with China.
I want to thank Chairman Levin for holding this hearing and publicly state that this is an area I believe we can and should work closely together on.