Tough trade issues with China are a two-way street
The Feb. 26 Opinion piece by Peter Navarro, "Watch your flanks, America!," raised some key issues in trade between the US and China, but it failed to propose a constructive solution.
Mr. Navarro cites the undervalued yuan, the huge trade imbalance, and China's purchase of US securities as major problems or even threats to US economic and other interests. Absent from the piece is an objective look at the whole picture.
Many economists would tell us that the root cause of numerous economic problems in the US is its appallingly low savings rate.
And the US trade deficit with China is at least partially caused by America's tight export control of high-tech and military products to China.
China wants to gradually raise the value of the yuan so that it will not disrupt economic and political stability. In fact, its currency has appreciated by 6 percent in the past 18 months.
Let's not forget that the US still maintains some economic sanctions against China, which were imposed in 1990 as a result of Tiananmen Square-related events.
It takes two to tango. Any unilateral, punitive measures from the US can only worsen the trade dispute. Any trade negotiations must recognize the fundamental interests of both countries.
Peter Navarro points out in his Feb. 26 Opinion piece on Chinese trade practices that China has a policy of keeping the value of its currency low, leading to a trade deficit for the US.
This policy also hurts countries in Africa and Asia. Because of higher wages in the Philippines, textile prices here cannot compete with those from Chinese factories. Now our rural livelihood is being threatened by cheap vegetable imports from China that will put local small farmers out of work.
In Africa, there is fear that China's investments amount to colonialism, encouraging the export of raw materials and monolithic economies by making it nearly impossible for new factories to compete with those overseas that export less expensive goods.
The World Trade Organization is supposed to stop such unfair practices, but it has failed to do so.
Unless something is done, I suspect that African and Asian countries might begin leaning toward protectionism and tariffs on artificially cheaper imports, such as those from China.
Gapan City, Philippines
As Peter Navarro has pointed out in his Opinion piece on US and Chinese trade relations, China's enormous purchases of US bonds constitute a critical danger to America's economy. I would add that they constitute a danger to our security as well. Mr. Navarro is technically correct in attributing this phenomenon to Chinese mercantilism.
However, his recommended remedy – for the US Treasury Secretary to fight for relief at the World Trade Organization – falls far too short. The root cause of America's vulnerability arises from the current US administration's fondness for deficit financing. It has gleefully given tax cut after tax cut, it didn't restrain out-of-control spending by the Republican Congress of the past six years, and it has financed the Iraq war through more borrowing.
Unless the American government returns to financially responsible practices, it is disingenuous to blame the Chinese for the fix that we are in today. The problem truly lies at home.
Sardul S. Minhas
Anaheim Hills, Calif.
The Monitor welcomes your letters and opinion articles. Because of the volume of mail we receive, we can neither acknowledge nor return unpublished submissions. All submissions are subject to editing. Letters must be signed and include your mailing address and telephone number. Any letter accepted will appear in print and on our website, www.csmonitor.com.
Mail letters to 'Readers Write,' and opinion articles to Opinion Page, One Norway St., Boston, MA 02115, or fax to (617) 450-2317, or e-mail to Letters.