Chinese Premier accuses some US Congressmen of politicizing trade gap
Chinese Premier Wen Jiabao criticized members of Congress in an interview set to air on Sunday for “politicizing” the U.S. trade imbalance with China because they do not know China well.
Wen, in an interview with U.S. TV news network CNN taped on September 23, also said he hoped for a “quick recovery of the U.S. economy” and said the Obama administration’s economic stimulus package was the right move to help the U.S. economy.
The Chinese premier’s comments were made before the U.S. House of Representatives on Wednesday passed legislation to pressure China to let its yuan currency rise more quickly.
“Some in the U.S. Congress do not know fully about China. They are politicizing the problems in China-US relations — in particular, the trade imbalance between our two countries,” Wen said in the interview taped when Wen was at a U.N. meeting in New York.
“I don’t think this is the right thing to do,” he told CNN’s “Fareed Zakaria GPS” program.
Many U.S. lawmakers argue that China’s currency is undervalued by as much as 40 percent, giving it an unfair advantage in international trade and stealing U.S. jobs. The U.S. trade deficit with China is projected to approach $250 billion this year.
The measure passed by the House cannot become law until the Senate also passes it and President Barack Obama signs it. Supporters hope to get a vote in the Senate later this year. The measure would clear the way for the Commerce Department to apply countervailing duties against imports from countries with “fundamentally undervalued” currencies.
Wen and U.S. President Barack Obama discussed China’s currency and huge trade surplus with the United States during a meeting on the sidelines of the U.N. General Assembly last month.
TRADE IMBALANCE
Wen acknowledged during the interview China’s trade surplus with the United States and the European Union, but said it runs a deficit with Japan and other Asian countries.
And he said that if the United States were to cut imports from China, he said, this would not help the U.S. trade imbalance.
“Many of the Chinese exports to the United States are no longer produced in the U.S., and I don’t believe that the United States will restart the production of those products — products which are at the low end of the value-added chain.”
“Even if you don’t buy those products from China, you still have to buy them from India, Sri Lanka or Bangladesh. And that will not help resolve the trade imbalance between our two countries,” he said.
Wen said the U.S. stimulus package pushed by Obama was the right thing to do. Obama signed an $814 billion stimulus package into law in 2009 aimed at helping lift the U.S. economy out of the worst recession since the 1930s.
The Chinese premier said the Obama administration’s plan of investing in infrastructure and goal of doubling exports would keep the U.S. economy “on the right track.”
“I think these passes and measures are the ones on the right track, moving in the right direction,” Wen said. “Although they came a little bit late, they still came in time.”
“I hope that there will be a quick recovery of the U.S. economy, because, after all, the U.S. economy is the largest in the world,” he said.
He said that he has been “trying very hard to manage” inflationary expectations in China “appropriately and well.”
“I believe corruption and inflation will have an adverse impact on stability of power in our country,” he said. “And these two both concern the trust and support of people in the government. And this is the perspective that I see the issue of inflation in China.”
Source: Reuters