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China’s Trade Practices Criticized as Unfair Amid Growing US Tensions

December 2, 2021 by Tom Ramstack
China’s Trade Practices Criticized as Unfair Amid Growing US Tensions
In this photo released by Xinhua News Agency, Chinese President Xi Jinping delivers a keynote speech at the opening ceremony of the Eighth Ministerial Conference of the Forum on China-Africa Cooperation on Monday, Nov. 29, 2021. (Huang Jingwen/Xinhua via AP)

WASHINGTON — The get-tough attitude toward China’s trade practices was on full display Thursday during a congressional hearing as international tensions heat up.

Trade experts and lawmakers accused China of unfairly subsidizing its industries to beat out American competitors, stealing intellectual property and exploiting loopholes in U.S. economic policies.

“China continues to demonstrate that it refuses to play by the rules,” said Earl Blumenauer, chairman of the House Ways and Means subcommittee on trade.

In an implied threat echoed by Republicans, he added, “I sincerely believe it is time to take a more aggressive and assertive approach.”

Congress is considering several proposals to counter Chinese competition. They include higher tariffs and restrictions on Chinese imports.

Rep. Vern Buchanan suggested restraints on data-sharing between American corporations and trade partners in China.

Data-sharing is a key factor in allegations that China steals technical information to manufacture products that infringe on American companies’ patent rights.

U.S. corporations say their Chinese business associates sometimes transfer data shared during contractual relations with their government, which then uses it for unfair economic competition. Chinese courts traditionally have declined to enforce patent rights of the American owners.

The result has been lost revenue and jobs for Americans, Buchanan said.

He recommended “swift enforcement action” against China for lapses in fair trade policies.

“Without Americans’ leadership on trade, China will fill the void that America leaves behind,” Buchanan said.

On Nov. 15, President Joe Biden and Chinese President Xi Jinping held a virtual summit that demonstrated wide gaps in agreement on trade policy. It showed that the “Make America Great Again” policy of the Trump administration is mirrored by a “Make China Great Again” movement in China.

The U.S. government has blacklisted more than a dozen Chinese companies it accuses of unfair trade or acting as counterparts of the communist country’s military.

In response, China has put off commitments under the Phase One trade agreement to help equalize the trade imbalance. It was supposed to purchase $200 billion in U.S. products under the agreement. At the current rate, China will meet only two-thirds of its pledge by the end of 2021.

After the Nov. 15 summit, Xi issued a statement recognizing the lack of agreement between the two countries’ leaders.

“The consequences of the Cold War are not far away,” Xi said.

Industry representatives who testified at the subcommittee on trade hearing showed few signs they wanted to make the concessions sought by China.

Kimberly Glas, president of the National Council of Textile Organizations, said U.S. textile manufacturing represents an $80 billion a year industry that employs 530,000 American workers. Nevertheless, Chinese imports make up 44% of textiles sold in the United States.

One in five of the Chinese textile products are made using forced labor, such as from China’s Uyghur ethnic minority, she said. China’s textile manufacturing contributes to global warming by ignoring environmental standards in its haste to compete internationally, she added.

“This has cost hundreds of thousands of critical jobs here in the United States,” Glas said.

Roy Houseman, legislative director for the United Steelworkers labor union, said American companies occasionally fail as they try to compete with China’s subsidized industries. He mentioned the example of the emerging and potentially huge market for solar energy.

“Around 80% of the solar supply chain is based in China,” he said.

Tom can be reached at tom@thewellnews.com

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