Bid to educate Congress about China trade

As President Barack Obama and Congress settle in for the next go-round of policy debates, the top Washington lobby for US companies doing business in China hopes to focus attention on trade between the world's two economic superpowers.

"China and the US Economy: Advancing a Winning Trade Agenda", issued on Wednesday by the US-China Business Council, addresses 10 major issues including US exports, manufacturing, the Chinese currency and China's investment in the US.

"China is the United States' third-largest export market,behind only Canada and Mexico, our closest neighbors. China is an important market for many US companies and American workers, but many Americans are unaware of the facts about America's commercial relationship with China," said John Frisbie, president of the council, which represents some 240 US companies that operate in China.

China, he said, offers many challenges for the US but also plenty of opportunities. "We have an obligation to current and future American generations to get this relationship right, but that will require us to focus on the real issues," Frisbie said.

"America has a great opportunity to build a constructive relationship with China that will benefit our economy and our businesses, workers and farmers across the nation."

US exports to China have soared 542 percent since 2000, compared to just 80 percent for US exports to all other countries, according to the USCBC report. During that time, all but two of the 50 states have registered growth in exports to China in triple-digit percentages or more, far outpacing what they sold to the rest of the world.

Exports benefit not only US manufacturers but also farmers and a range of service industries, the report said. It counted US-based multinationals as well as small and medium-size companies among the winners.

"Even those US imports from China have US content," it said.

The business group's report dismisses an often-cited statistic that US manufacturing has lost more than 2.7 million jobs to China since 2001.It said that calculation assumes every product imported from China would have otherwise been made domestically. A more likely scenario is that those goods would have been imported from another country, according to the report.

"Maintaining America's manufacturing strength has more to do with our policies and actions here at home than what happens in China," it said.

Leading up to November's presidential election, Republican challenger Mitt Romney repeatedly vowed to label China a currency manipulator if elected, but the USCBC report said the dollar-yuan exchange rate doesn't significantly affect US employment or the country's long-standing trade deficit with China. "Some lawmakers on Capitol Hill have made China's currency value the sole focus of attention, despite the fact that it has appreciated more than 30 percent against the US dollar since 2005," Frisbie said.

USCBC spokesman Marc Ross said the report aims to inform new members in Senate as well as freshmen members of the House about the benefits and challenges of US-China trade.

"The views on Capitol Hill sometimes are one-sided," Ross said. "Everyone recognizes the challenge of doing trade with China, but there are lots of opportunities.

"The report really tries to debunk some of the conventional wisdom or misunderstandings about the size of the relationship," he said.

Chinese companies investing in the US create jobs, which is why numerous governors and mayors from US states and cities have been seeking Chinese investment, according to the report. Despite the overall trade gap with China, US exports of services enjoyed a surplus of over $15 billion in 2011, with room for substantial growth, the council said.

The report also argues that, amid criticism of companies for moving jobs to China, most do business in China to fight for a share of the world's fastest-growing consumer market and that those operations strengthen these companies back home.

The report also notes problems facing US companies, however. In its 2012 survey of member companies, the USCBC found that despite market growth, optimism about business operations in China was tempered by domestic competition, continuing regulatory and market-access barriers, and rising costs.

It also cited members' complaints of favoritism toward Chinese firms - in administrative licensing, competition with Chinese enterprises, uneven enforcement and implementation of laws and policies, investment restrictions,and assessment of standards and conformity.

"Despite tremendous market growth over the last decade, there are significant challenges that American companies face in China and that need to be addressed and need US government leadership," Frisbie said.

The report recommends a US "action plan" to address those issues and suggests dialogue with China as a way to resolve them. If negotiations fail, "rules-based" tools, such as cases at the World Trade Organization, should be pursued, provided the action is well-defined, supported by industry and winnable.

US Ambassador to China Gary Locke, in a recent talk at the Asia Society in New York, said Chinese and US leaders understand the degree to which their countries are intertwined economically.

"So we have to figure out how we get along, not because of our self-interest, but because the history of the Asia-Pacific region will be written by the US and China," said Locke, who is a former US commerce secretary.

chenweihua@chinadailyusa.com