Experts Foresee Mounting Trade Tension Between US, China

Amid official data showing record rises in its foreign currency reserves and trade surplus, Washington-based experts are predicting rising trade tension between the U.S. and China.

China trade specialist William Reinsch told a Washington forum Wednesday that U.S. Congress is considering five separate measures aimed at forcing China to speed up the revaluation of its currency.

Reinsch declined to predict whether any of the measures will be approved. But he suggested that none would likely be effective in forcing the pace of revaluation. Reinsch said a more effective means of reducing the trade imbalance would be for American consumers to focus on the weak health and safety standards of Chinese goods.

"If the American consumer decides, for whatever reason, that Chinese products are unhealthy, unsafe or ungreen-depending on your criteria, and stops buying them, or starts asking his retailer, 'I want the one made in Bangla Desh, or I want the one made here, any where other than there (China),' they (the Chinese) have a much bigger problem than anything that is going to come out of the Congress," he said.

Evidence of unsafe or contaminated Chinese products from dog food to seafood to toothpaste to (automotive) tires have recently filled newspaper headline in the U.S.

Brookings Institution economist Jeffrey Bader believes that structural issues are more to blame than a weak currency for the trade imbalance. China's overall trade surplus rose by 84 percent during the past six months. Bader, a former U.S. trade negotiator, says the composition of Chinese exports have shifted over the past decade as other Asian nations sent semi-finished goods to low-cost China for final assembly and export.

"We've had the development of an integrated East Asian regional economy centered in China and with China as the final assembly point for many products," he said.

Bader said China has advanced to the point where it is now the largest Asian supplier of computers and computer components to the U.S. Those exports are up two thousand percent in the past five years as high tech goods that used to move directly from Southeast Asia to the U.S. now go to China for final assembly.

VOA News