It makes little sense for a country to restrict its own exports
while claiming to be serious about cutting its trade deficit.
If the United States insists that its increased restriction on
high-tech exports to China "strikes the right balance in our
complex relations with China", Chinese policymakers may have reason
to doubt US motives for pressing for revaluation of the Chinese
currency.
The US Commerce Department recently listed 20 separate product
groups that will require export licenses. The items include
high-powered computers and certain lasers.
Undoubtedly, this move smacks of Cold-War mentality. US
officials argue that exports of such items will contribute to
China's military modernization.
However, what makes this export control particularly
counterproductive is that it comes at a moment when the US is
stepping up criticism against China for the two countries'
bilateral trade imbalance. Though that trade imbalance is largely a
result of accelerated economic globalization, China has been
seeking cooperation with the US to reduce their respective external
imbalances and thus ease the global imbalance.
As a low-cost manufacturing center in the global supply chain,
China is set to gain a huge trade surplus from exports. To balance
its trade growth, the country has not only introduced more
flexibility into its foreign exchange regime but also raised export
tariffs to rein in growth of the trade surplus.
As the world's largest economy, the US can take measures to
encourage its consumers to spend less and save more to cut its
trade deficit. But so far, the US government and politicians have
shied away from taking on this essential but unpopular job.
As a global high-tech leader, the other obvious option for the
US to narrow its trade deficit is to expand its share in the global
market of high-tech products. The different development levels of
China and the US should make them complementary trade partners.
In fact, China is now the fourth largest export market for the
US and US exports to China have been growing at a much faster rate
over the past two years than its imports from China.
However, by politicizing the bilateral trade ties, the US is
running counter to the interests of both sides.
Such a misdirected export curb will not only affect the growing
list of US companies that export to China but also undermine
bilateral or unilateral efforts the two countries have made to
balance their trade relations.
(China Daily June 19, 2007)
