The China Problem
By Tyler Anderson
March 17, 2010

Let me paint a picture for you. Imagine a world where GDP growth (how much our economy grows) is at 9.5% a year. Where there’s a job for almost every one that wants one. Where your country is prospering while most of the world is barely making it by. Sounds great doesn’t it. Too bad this isn’t America, or not even a free market economy. It’s China. Of course China has taken action to cause this sort of accomplishment, but their action has decreased the competitiveness of foreign countries. This action that I speak of is China manipulating it’s currency to make it weaker. What this means is that Chinese goods have an advantage in the global economy because their goods are cheaper because of the fact that their currency isn’t worth as much. Also, imports into China are more expensive which is a big problem because of the fact that China is a market with over 1 billion people. This is one of the factors that is causing America’s huge trade deficit and making thousands of American workers lose their jobs. But the dilemma is that many don't know what we can do to stop it.
In the past couple days, a bipartisan bill has been passing the senate that would press China to increase the value of its currency. The bill would impose tariffs on Chinese goods which could help offset the effects of a weak currency. It was crafted by Democrat Charles Schumer and Republican Lindsey Graham who both claim that China’s currency is undervalued by 25 to 50 percent. Critics of the bill claim that this would infuriate China who happens to be the largest holder of US debt and a country that we could use the help on with foreign issues such as Iran and North Korea. However, according to Schumer, the Chinese trade surpluses come at the expense of not only US jobs, but also developing countries such as India and Mexico who can’t take any action on the matter and are waiting for the US to do something.
The US would also have major worldwide support on this issue especially among developing countries. Countries that are trying to build their own economies are most affected by China because they can’t compete with China when it comes to manufacturing.
In general I think that the US has been too soft on China. We have 10% unemployment in this country while China is booming and I think that this policy of appeasement towards Chinese economic policy needs to end. China is pushing the rest of the world around just for the benefit of their own people and our politicians have done nothing for a decade. The current bill in the senate is a step forward but we need to press our politicians to pass it and increase the tariffs on Chinese goods to help protect American jobs.