Political debate over China’s currency policy is heating up. In fact, last week more than 100 members of the US Congress urged the Obama administration to label China a “currency manipulator” in its new Treasury report due out on April 15.
Corporate America’s attitude toward China seems to be nearing a boiling point, as well. Recently, Beijing has pursued a string of policies that are making it increasingly difficult for US companies to conduct business and compete with China. Couple that with a slow economic recovery and nagging domestic unemployment, and it’s easy to understand why many businesses here are rethinking both their current roles and their long-term potential in China.
Myron Brilliant, senior vice-president for international affairs at the US Chamber of Commerce, summed it up neatly in yesterday’s Financial Times. “China shouldn’t take the American business community for granted,” he says in the article.
Will this shift in attitude from both US legislators and the American business community result in sanctions? Are there other options available to help level the playing field?
Brilliant, who is headed to Beijing to meet with Chinese officials this week, agrees that trade problems are mounting. Still, he doesn’t want to see protectionism met with protectionism.
Not surprisingly, on Sunday, China again resisted pressure for a renminbi revaluation and threatened to retaliate if the US imposed trade sanctions. According to China’s commerce minister, the US has the most to lose in a “trade war.”
We’re likely to learn more about how far US companies and Chinese officials are willing to go to resolve their differences (or not) later this week when Google formally announces its plan for dealing with censorship restrictions imposed by Beijing.