David J. Lynch: U.S.-Chinese Trade In Perspective
What started as a bad pun has become one of the most consequential questions facing the United States: "Who is Hu?"
Is Chinese President Hu Jintao the valued customer Corporate America fancies or, as a growing segment of official Washington fears, is he the USA's most dangerous long-term enemy?
Financial links between the USA -- the world's most powerful country -- and China -- its most populous one -- have never been more crucial. Bilateral trade is running at an annual rate of more than a quarter of a trillion dollars. And Beijing's purchases of U.S. Treasuries are essential to keeping interest rates low, good news for anyone who's taken out a mortgage recently.
Yet, with the Chinese and American presidents preparing to meet today on the sidelines of a United Nations session in New York, long-standing Sino-U.S. trade friction is merging with mounting anxiety over Beijing's stepped-up military spending and its muscular drive to secure energy supplies. As the Bush administration struggles to balance commerce and national security, companies seeking to expand sales to China may wind up in the crossfire.
"A rising China has another side people should be worried about. It's not just about cheap goods," says Yu Maochun, a historian at the U.S. Naval Academy.
This fall, the Commerce Department plans to issue a new "catch-all" regulation to curb sales to China of civilian technologies that could have military applications. The new rule could dramatically expand the list of items requiring export licenses for sale to China, beyond today's narrow list of advanced technologies.
"We're very concerned about it. ... It's going to cut off a lot of legitimate non-military trade," says William Reinsch, president of the National Foreign Trade Council, a Washington-based pro-trade business group.
A group of 70 to 80 companies, including General Electric, Boeing and General Dynamics, have banded together to lobby against the proposal, he says. Affected products could include everything from medical technology to heavy equipment.
Bush is scheduled to speak with Hu, making his first visit to the USA since becoming China's president in 2003, on the fringes of a U.N. General Assembly session. The get-together was hastily arranged after Bush canceled a Sept. 7 White House meeting to focus on responding to Hurricane Katrina.
Antagonism toward China is flaring for several reasons. Chief among them: The largest single-country slice of the swollen U.S. trade deficit is with China. Earlier this month, bilateral talks aimed at capping surging Chinese textile shipments to the USA failed to reach an accord. Many U.S. manufacturers say China's refusal to allow world markets to set the value of its currency worsens the trade gap by making Chinese products artificially cheap. (Beijing took a small, but important first step in this direction in July when it stopped pegging the yuan to the dollar's value.)
Is Chinese President Hu Jintao the valued customer Corporate America fancies or, as a growing segment of official Washington fears, is he the USA's most dangerous long-term enemy?
Financial links between the USA -- the world's most powerful country -- and China -- its most populous one -- have never been more crucial. Bilateral trade is running at an annual rate of more than a quarter of a trillion dollars. And Beijing's purchases of U.S. Treasuries are essential to keeping interest rates low, good news for anyone who's taken out a mortgage recently.
Yet, with the Chinese and American presidents preparing to meet today on the sidelines of a United Nations session in New York, long-standing Sino-U.S. trade friction is merging with mounting anxiety over Beijing's stepped-up military spending and its muscular drive to secure energy supplies. As the Bush administration struggles to balance commerce and national security, companies seeking to expand sales to China may wind up in the crossfire.
"A rising China has another side people should be worried about. It's not just about cheap goods," says Yu Maochun, a historian at the U.S. Naval Academy.
This fall, the Commerce Department plans to issue a new "catch-all" regulation to curb sales to China of civilian technologies that could have military applications. The new rule could dramatically expand the list of items requiring export licenses for sale to China, beyond today's narrow list of advanced technologies.
"We're very concerned about it. ... It's going to cut off a lot of legitimate non-military trade," says William Reinsch, president of the National Foreign Trade Council, a Washington-based pro-trade business group.
A group of 70 to 80 companies, including General Electric, Boeing and General Dynamics, have banded together to lobby against the proposal, he says. Affected products could include everything from medical technology to heavy equipment.
Bush is scheduled to speak with Hu, making his first visit to the USA since becoming China's president in 2003, on the fringes of a U.N. General Assembly session. The get-together was hastily arranged after Bush canceled a Sept. 7 White House meeting to focus on responding to Hurricane Katrina.
Antagonism toward China is flaring for several reasons. Chief among them: The largest single-country slice of the swollen U.S. trade deficit is with China. Earlier this month, bilateral talks aimed at capping surging Chinese textile shipments to the USA failed to reach an accord. Many U.S. manufacturers say China's refusal to allow world markets to set the value of its currency worsens the trade gap by making Chinese products artificially cheap. (Beijing took a small, but important first step in this direction in July when it stopped pegging the yuan to the dollar's value.)