US-China Trade in the News 1-2-12 Update: Trade Updates

After a week of primarily negative economic news from China, the World Bank’s chief economist is embarking on a campaign to reverse negative perceptions about China.  “China has the potential to achieve another 20 years of 8% growth,' said Justin Yifu Lin in a speech.  Moreover, he also has stated in “various venues that in two decades the Chinese economy could, in purchasing power parity terms, end up twice the size of the American one.”   However, Stephen S. Roach is not as optimistic.  He writes, “fears are growing that China and India are about to be the next victims of the ongoing global economic carnage. This would have enormous consequences. If China and India are next to fall, Asia would be at risk, and it would be hard to avoid a global recession.” 

This week the Office of the U.S. Trade Representative released its annual review of U.S. trade.  Ambassador Kirk reports “the Obama Administration achieved unprecedented results on trade…and we’ve used every available enforcement tool to hold China accountable for its commitments to play by the rules, provide a level playing field, and protect intellectual property, supporting opportunities for American exporters.”   All this and more in this US-China Trade Update.

Contents
Economy
Global Relations
Currency
Trade

Economy

Commentary – Ivan Krastev : When China Rules
Project Syndicate, December 28, 2011
“For a European these days, thinking about the future is disturbing. America is militarily overstretched, politically polarized, and financially indebted. The European Union seems on the brink of collapse, and many non-Europeans view the old continent as a retired power that can still impress the world with its good manners, but not with nerve or ambition.”  Read more

Commentary – Doug Bandow : US' empire state of mind
China Military Online, December 27, 2011
“Recently, the PLA Daily interviewed Lin Zhiyuan, an expert on U.S. issues from Department of World Military Research under Academy of Military Sciences on the U.S. strategy to 'return to Asia.'..Reporter: While talking about Asia recently, U.S. Secretary of State Hillary Clinton said, 'The United States is back,' making it clear that the United States has paid more attention to the Asian-Pacific region than ever, and it will shift its strategic focus to Asia in the future. What do you think of the move?”  Read more

Commentary – Stephen S. Roach : Why India is Riskier than China
Project Syndicate, December 27, 2011
“Today, fears are growing that China and India are about to be the next victims of the ongoing global economic carnage. This would have enormous consequences. Asia’s developing and newly industrialized economies grew at an 8.5% average annual rate over 2010-11 – nearly triple the 3% growth elsewhere in the world. If China and India are next to fall, Asia would be at risk, and it would be hard to avoid a global recession.”  Read more

Commentary – Keith Bredsher : In China, Power in Nascent Electric Car Industry
New York Times, December 26, 2011
“Three years ago, as part of its green-energy policy, the Chinese government set an ambitious goal: by the end of 2011, the nation would be able to produce at least 500,000 hybrid or all-electric cars and buses a year...With only about a week to go, it is clear China will fall far short of that target. Despite dozens of electric-vehicle demonstration projects around the country, analysts put China’s actual annual production capacity at only several thousand hybrid and all-electric cars and buses.”  Read more  

CommentaryGordon G. Chang: Don't Worry About China: World Bank Chief Economist
Forbes, December 25, 2011
“As the Chinese economy tumbles into recession, the World Bank’s chief economist is embarking on a campaign to reverse negative perceptions about his home country’s prospects.  'China has the potential to achieve another 20 years of 8% growth,' said Justin Yifu Lin in a speech sponsored by the Federal Reserve Bank of San Francisco late last month.  Moreover, he also has stated in various venues that in two decades the Chinese economy could, in purchasing power parity terms, end up twice the size of the American one.”  Read more

Commentary – Michael A. Cohen : The World According to Ron Paul
Foreign Policy, December 23, 2011
“In this year's GOP presidential track meet it seems that everyone gets a turn in front -- and this week Ron Paul is the lucky candidate. While still trailing in the national race numbers, recent poll results from Iowa suggest that, two weeks until caucus day, Paul has jumped into the lead there ahead of the water-treading Mitt Romney and the sinking Newt Gingrich. ”  Read more  

Commentary – Henry Mintzberg : Who Will Fix the US Economy?
Project Syndicate, December 22, 2011
“Much commentary about the American economy nowadays leaves the impression that economists should fix its problems. But Washington is teeming with smart economists, and the problems remain...An economy is like a cloud: only when inside does one realize how diffuse it is – and that what matters are the particles of vapor that it comprises.”  Read more

Commentary – Justin Yifu Lin : Demystifying the Chinese Economy
Project Syndicate, December 22, 2011
“China had an advanced and prosperous civilization for millennia until the eighteenth century, but then degenerated into a very poor country for 150 years. Now it has resurged to become the world’s most dynamic economy since launching its transition to a market economy in 1979. What drove these fateful changes?”  Read more
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Global Relations

In the News – US investigation into assets abroad affects overseas Chinese
Beijing Daily, December 28, 2011
“Foreign media reported on Dec. 26 that the U.S. government is stepping up the investigation into U.S. citizens’ overseas accounts and assets. Once assets are found hiding abroad, the owner will be severely punished. Experts said that this move of U.S. administration will greatly affect overseas Chinese.”  Read more

Commentary– Stephen Harner: Japan-China Relations--PM Noda's 21 Hours in Beijing
Forbes, December 27, 2011
“Former U.S. ambassador to China and current U.S. presidential candidate Jon Huntsman is boringly repetitive in claiming that 'the U.S. and China relationship is the most important and complex relationship in the world today.' ”  Read more

Analysis – BJÖRN-SÖREN Gigler: Can Technology be transformational? Opening up Development through Technology
World Bank , December 23, 2011
“Twitter, Facebook, SMS, and Crowdsourcing—2011 has certainly been the year in which the use of social media and technology has captured the world’s attention. From Tahrir Square in Egypt to the Anna Hazare movement in India, citizens have demonstrated that they want voice and accountability. Innovations in social media, mobile phones and inter-active mapping are powerful tools to mobilize citizens and to provide people with a voice—thus broadening the political debate.”  Read more

Analysis – Ignacio Mas: Triggering Disruptive Innovation in Retail Banking in the Digital Age
In the news– Chinese Hackers Attack U.S. Chamber of Commerce
Forbes, December 22, 2011
“Chinese hackers infiltrated the U.S. Chamber of Commerce, heightening tensions between Beijing and Washington, and underscoring the emergence of cyber-warfare in international relations...Before its discovery, the breach exposed information about the Chamber’s three million corporate members, accessed 300 Internet addresses and stole six weeks’ worth of email from four Asian policy specialists.” Read more

In the News – China: Stricter Air Pollution Monitoring Standards to Start Next Year, With Results Made Public in 2016
New York Times, December 22, 2011
China will introduce stricter air pollution standards next year to monitor tiny particles of pollution in Beijing and other cities, but it may not start releasing the results to the public until 2016, state news media reported Thursday. Chinese cities do not measure data on the smaller particles, 2.5 microns in diameter or less, from smokestacks and exhaust pipes that shroud many cities in acrid smog, and many Chinese have complained that official statistics vastly understate the problem. Environment Minister Zhou Shengxian was quoted as saying in People’s Daily that China would start measuring those particles, first in large cities and then nationally by 2015. Starting in 2016, cities will have to make the numbers public, the report said. Mr. Zhou said that the results should be publicized 'at an appropriate time.'”  Read more

In the News – China dismisses US cyber attack reports
People's Daily Online, December 22, 2011
“China dismissed the recent reports that the attack against the U.S. Chamber of Commerce originated in China, saying the report is groundless...The Wall Street Journal reported on Wednesday that hackers in China broke through the computer defenses of the U.S. Chamber of Commerce last year and were able to access information about its operations and its 3 million members.”  Read more 

Commentary – Kenneth Lieberthal : The American Pivot to Asia
Foreign Policy, December 21, 2011
"The sudden death of North Korean leader Kim Jong Il drives home the importance of being able to work not only with U.S. allies but also with China in managing Asia's key threats. This is what makes striking the right balance in America's overall strategy toward Asia so vital.”  Read more  
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Currency

In the News – U.S. Treasury declines to name China as currency manipulator
Xinhua, December 28, 2011
“The U.S. Treasury Department on Tuesday declined to name China as a currency manipulator, saying that it would closely monitor the pace of RMB appreciation...The latest Semi-Annual Report to the Congress on International Economic and Exchange Rate Policies released on Tuesday highlighted the need for greater exchange rate flexibility, most notably by China, but also in other major economies.”  Read more

In the News – U.S. Declines to Say China Manipulates Its Currency
The Associated Press, December 27, 2011
“The Obama administration on Tuesday declined to label China a currency manipulator after seeing recent increases in the value of the renminbi compared with the dollar...The decision angered some manufacturing groups, which have accused China of artificially holding down the value of its currency, the renminbi, to gain trade advantages. A cheaper renminbi makes Chinese goods less expensive when they are shipped to the United States. It also makes American goods more expensive in China. Both could increase America’s trade deficit with China, which is on pace to reach a record high this year.”  Read more  
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Trade

In the News – Weekly Trade Spotlight: USTR 2011 Year in Review
From the Office of the U.S. Trade Representative, December 22, 2011
“In 2011, the Obama Administration continued to advance an ambitious trade agenda that is helping to keep the United States on track to meet President Obama’s goal of doubling U.S. exports by the end of 2014, in support of up to two million additional American jobs.” 
Read more
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