The US should focus on enhancing its overall economic competitiveness instead of seeking protectionism to combat its economic slowdown, said the latest 2008 White Paper: American Business in China.
And, it should not press for yuan appreciation to reduce its trade deficit with China since the value of the yuan is not the fundamental cause of the deficit, said the White Paper, which was released by the American Chamber of Commerce (AmCham) China, AmCham Shanghai and AmCham South China Tuesday.
Battered by the subprime crisis, the US economy is slowing while its trade deficit with China remains high, standing at $163.3 billion last year. The deficit, coupled with the ongoing presidential election campaign in which some candidates have fanned anti-China sentiments to woo voters, has triggered protectionism against Chinese goods and investment in the US.
The two countries should make "defending and preserving the openness of the trade relationship a core commitment", the White Paper said. "Instances of cooperation between China and US far exceed instances of dispute."
"An open US and an open China will lead to sustained benefits for both US companies and citizens back home," said Harley Seyedin, chairman of AmCham South China.
Trade is not a zero-sum game, said the White Paper. Rapid economic growth in China and other nations benefits Americans by adding to the growth of the global economy and creating greater demand for US products and more jobs for US workers. Moreover, US consumers benefit from cheaper imports, it said.
Domestic politics in the US would not derail Sino-US trade relations, said James Zimmerman, chairman of AmCham China. "No matter what happens in the US election and who wins, the relationship between US and China is very, very important. When the election is completed, the administration in power would see the relationship is very, very important."
The White Paper noted that China has in effect acquired part of the trade deficit formerly held by other Asian countries and as a result, imports from China are not really displacing US goods.
The White Paper also said the US Congress should refrain from enacting legislation that attempts to change the terms of trade with China through currency appreciation to reduce US trade deficit.
The value of the yuan is not the primary cause of US trade deficit with China and yuan appreciation would not help US much, it said, adding that China will over time provide structural relief to its trade surplus through its economic rebalancing efforts.
(China Daily April 29, 2008)
