The huge US trade deficit with China has been a thorny issue in
the bilateral economic relations in recent years.
Inexpensive Chinese products help Americans reduce their
spending, curb their inflation and trim their budget deficit. But
it seems that sensibility, instead of sense, shapes their judgment
on the issue.
For Americans, job losses caused by the foreign competition and
price hikes caused by imports restriction bring them different
feelings. The assertion that competition from low-end Chinese
products leads to job cuts or even bankruptcies in American
businesses ignites and sharpens particularly strong sentiment among
people affected and media sensationalism sharpens that
mentality.
However, it takes time for the market to respond to imports
limits by raising prices. In addition, the extra costs will be
shared by all consumers. Therefore, the majority of the public have
more tolerance toward slight price rise than blue-collars do for
losing jobs. American medium and small-sized enterprises which fail
in the market competition regard Chinese products as their
threat.
That is why the voice of criticism against China is so loud in
the US. But the fact is that even if the US restrains Chinese
products, products from other countries will go in as well.
The sensibility also influences the US politics. Some senators
without fully understanding about the Sino-US trade take China as a
scapegoat to win votes. Multinational giants which are making huge
profits in China and supported China's WTO accession keep silent on
this issue for fear of being labeled as "non-patriotic" although
what they really want is further prosperity of the bilateral
trade.
China's export structure also leads to the misleading
sensibility of Americans. Most Chinese exports are daily
necessities. For American consumers, they see so many "Made in
China" in supermarkets. In 2004, out of the US imports, 81 percent
of sports equipments, 68 percent of shoes, 42 percent of furniture,
22 percent of electronic equipment, and 20 percent of garment were
from China.
But actually Chinese products only accounted for 14 percent of
the total US imports. If spending on food and energy is not
counted, Made-in-China only cost 2 percent of American's
consumption.
There is a view in the US which attributes China's fast growing
economy for years to its trade surplus with the US. The robust
economic growth has reinforced its national power. Some Americans
are inclined to politicize economic issues especially when China
invests a part of its trade surplus in the US treasury bonds.
Americans have trade liberalization and open market on their
lips --- on the condition that their own interests are not
affected. That has been exemplified by their trade disputes with
the EU and Japan. Free trade always gives way to trade
protectionism and the pursuit for material interests prevails.
Countries which dwarf the US with their products then become a
"threat".
Media is always ready to join the bandwagon in this case. All of
these have resulted to sensibility outgrowing sense, leading to
oversight of the US responsibility for erasing the imbalanced trade
and ignorance of the truth of the trade --- reciprocity.
(People's Daily Online May 11, 2006)
