China: Too Much, Too Soon?
As China continues to grow in affluence and influence – with an 11% economic growth rate predicted for 2007 -- grass-roots dissent has united traditional opponents in the U.S.: Pro-labor liberals and anti-globalization conservatives cry foul over Beijing’s currency policies and the tidal waves of cheaply-made goods flowing into America, as political bedfellows blame both for a massive U.S. trade deficit. Then there are the U.S. entertainment and software sectors, where reportedly vast Chinese piracy has raised hackles among copyright holders already smarting from a plague of Internet bootlegging. The U.S. has filed at least two lawsuits against Beijing with the World Trade Organization. Are these bones of contention the result of a China grown arrogant with success – or merely sour grapes on the part of Americans facing aggressive competition? One thing seems certain either way: the U.S. can no longer rest on the laurels of being the world’s sole superpower.
Treasury Secretary Henry “Hank” Paulson declared that China must be dealt with via “small steps.” But Peter Navarro, business professor at University Of California – Irvine, and author of “The Coming China Wars,” insists the scope of the problem is too big for piecemeal measures. “China is essentially the U.S. central banker now,” yet “they use five unfair trading practices, including export subsidies that violate the WTO [treaty], and gross currency manipulation,” he told CNBC’s “Power Lunch.” Sijin Cheng, China analyst at the Eurasia Group, sees a more complex story that defies a unilateral “tough policy.” With “U.S. industry divided” – some firms view China as a manufacturing base, some as a market -- she supports Paulson’s perspective, recommending “incremental policy” that avoids alienating those groups within China that do seek greater openness.