U.S.-China can mutually benefit from a constructive conversation
It’s no secret that the U.S. and Chinese economies are mutually dependent on each other. Since Nixon’s trip to the People’s Republic of China in 1972, the success of the world’s two largest economies have become increasingly joined.
But diplomatic relations between China and the U.S. have grown complicated over the years. Former Treasury Secretary Robert Rubin argues in a recent Washington Post opinion that a constructive relationship is in the countries' mutual interest:
Although geopolitical issues are of great importance, economic issues are closer to most people’s lives and play a significant role in public attitudes toward the other country. And with each country claiming harm from the other’s economic policies, the discourse between the countries consists largely of a dialogue of the deaf.
Rubin argues that both countries would benefit from acknowledging the others' criticisms. The U.S. often criticizes China’s government subsidies and its practice of tightly controlling the exchange rate on the yuan -- more widely known as currency manipulation.
And with good reason. By devaluing its own currency, China’s government enables products to be exported at a below-market price. This causes China's exports to soar while endangering the success of American companies and workers.
China is undergoing a systemic transition toward domestic consumption, and away from resource-intensive export growth. These efforts are imperative to sustain strong growth in the medium term. At the same time, China needs to move more quickly to a market-determined exchange rate and more open access to its markets.
While we wait for our diplomats to get tough on China’s currency manipulation, you can urge your representative to sign onto the Currency Reform for Fair Trade Act (H.R. 1276).
President Obama presents President Xi Jingping of China with a gift at Sunnylands in Rancho Mirage, California on June 8, 2013.
Image by the White House, following United States Government work copyright guidelines.
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