On May 24, the second round of the U.S.-China Strategic and Economic Dialogue was held in Beijing. Fifty representatives of more than 40 Chinese and American government departments participated by discussing issues related to both foreign strategy and economics. This undoubtedly drew international interest.
By necessity, this year’s dialogue will touch on a great number of issues. In terms of the economy, American officials said that the discussion will have four main focal points: breaking down trade and investment barriers, promoting powerful economic recovery and balanced expansion, promoting a more open, flexible, and market-oriented financial system, and strengthening the international financial structure. But what we will be focusing on is America’s “export plan.”
During his State of the Union address at the beginning of the year, American President Barack Obama mentioned an ambitious goal of doubling national exports within five years. Without delay, American Secretary of Commerce Gary Locke revealed a “National Export Initiative.” Since then, American leaders have mentioned this export plan on various occasions, and Secretary Locke paid a diplomatic visit to China to discuss such exports. When all this is said and done, what does America’s export plan mean for the Chinese economy?
From the American domestic standpoint, trumpeting the export plan is intended to stimulate economic growth and counter high unemployment rates. As Obama said, for every billion dollars in increased exports, 6,000 American jobs are created. If this export plan is realized, 2 million jobs will be created within five years. Increased exports mean increased production, and increased production will consequently speed up the pace of America’s economic recovery. But in the end, the basic purpose of America’s proposed export strategy is to guarantee its place at the forefront of the world market and to ensure its ability to compete. As Obama once declared, by doing this America will “make this century another American Century.”
We know that America was once the world’s number one exporter. From the 1940s to the 1980s, products labeled “Made in America” were popular around the world. Strong exports secured America’s position as a world superpower. America was unchallenged in nearly every aspect including politics, military capabilities, technology and culture. During the past 20 years, following adjustments in American production and changes to the international economy, America not only lost its place as the largest exporter, but also became one of the largest importers. Yet, a starved camel is still bigger than a horse, and if America experiences a revival economic-movement, making use of its incredible technological abilities and industrial base to implement this new strategy, its determination and potential to resuscitate its export ability cannot be underestimated.
In the past, trade between China and America has been flawed and uneven. China wants the United States to provide it with more than basic machinery and farm produce because, as Wen Jiabao once said, “the Chinese can’t always be sitting on airplanes eating soybeans.” China also wishes that America would relax its control over exports of new high-tech products and give the Chinese things that they really need.
Unfortunately, on one hand Americans complain that China has the better end of the deal, while on the other hand America strictly limits its exports of high-tech products to China, asking that China open its markets in other directions instead. In fact, this export strategy is dictated by America’s trade philosophy. Historically, while America has claimed to have the world’s most open trade system, at its core, it has never truly implemented free trade. Domestic measures that America uses to solve international issues, including the U.S. Trade Act’s Provision 301, are a big bat that America wields to implement its unilateral goals in the international arena. When the bat is swung, who wins and who gets hurt? It goes without saying.
To deal with America’s export plan and trade philosophy, we need to consider how to protect our own export position and national interests.
Big woof.