China Is Our Friend!!! Part 43565

Some perspective on trade with PRChina, notorious human-rights violator:

The U.S. trade deficit with China was $24.4 billion in October, and has increased $18.9 billion since December 2001. The bilateral deficit keeps rising, because China undervalues the yuan, and this makes Chinese exports artificially inexpensive and U.S. products too expensive in China.

...In July 2005, China revalued the yuan from 8.28 per dollar to 8.11 and announced it would adjust the currency to a basket of currencies. However, the yuan continues to track the dollar closely and currently is trading at about 7.84, a 3.3 percent appreciation over 17 months.

Modernization and productivity growth raise the implicit value of the yuan about 5 percent a year; therefore, at the current rate of appreciation, the gap between the value enforced by Beijing and the true market value of the yuan grows each month. The yuan remains undervalued against the dollar by at least 40 percent.

...Many U.S. multinationals, like GE, Caterpillar and GM, have earned huge profits investing in protected Chinese and other Asian markets, and have lobbied the Congress and Administration not to take action against Chinese mercantilism. Together they have persistently characterized as protectionist critics of China’s policy that advocate affirmative U.S. steps that would either offset Chinese export subsidies or move China to change its policies. This is puzzling as the United States regularly takes steps to offset subsidized imports from the EU or Japan that harm U.S. industries.

Why the Bush Administration insists on affording China special status is a mystery

[Not really. GWB believes that a capitalist PRChina will become a "good global citizen." The only question is whether his belief has a foundation--and WHEN PRChina will actually live up to the terms of PNTR/MFN treaties--which is evidently not a major issue to GWB.]

Well, there you have it. Still wondering why US manufacturing jobs continue to disappear?