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China and the US
U.S.–China Economic Relations Continue to Sour

U.S. Treasury Secretary Jack Lew isn’t happy with Beijing’s anti-competitive policies. The WSJ reports:

“We continue to raise concerns about the general climate in China for U.S. businesses,” Mr. Lew said Thursday at the American Enterprise Institute, a Washington think tank. “They need the innovation that comes from foreign companies, they need the economic activity that comes from foreign companies, and they’re going to have to make a choice on how they manage this set of obstacles.”

Of those obstacles, he added, “some are formal in the form of laws, and some are informal in the form of bureaucratic complexity.”

Mr. Lew’s relatively strong criticism on business conditions contrasts with his more favorable view of other, more successful economic engagement with China in the past seven years.

Zhu Haiquan, a spokesman for the Chinese Embassy in Washington, said the “Chinese government is fully engaged in an all-round reform which will also serve as a strong guarantee for an improved foreign investment environment in China.”

Public criticism from Lew points to an ominous trend. In the past, the economic relationship between China and the U.S. has been strong enough to offset political disputes. Increasingly, that is not the case on the U.S. side. Companies doing business outside China are struggling to compete with China’s heavily-subsidized enterprises. Meanwhile, companies doing business inside China have been complaining about a stifling regulatory environment. On Friday, Apple was told it may have to stop selling the latest model of the iPhone because of alleged copyright infringement.

Whether Clinton or Trump wins in November, it appears that U.S.-China relations will be on a downhill slide and that the American business community will be less likely to rush to China’s defense.

Panda huggers may soon be almost as rare as pandas.

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  • Pete

    And just wait util Donald Trump starts bittig China on their unfair trading practices.

    For China, the smooth ride is over.

    • Frank Natoli

      Right. Help me out. Trump points the finger at China, and he’s a protectionist demagogue. Obama’s lackey Lew takes the Middle Kingdom to task and that’s perfectly reasonable albeit “ominous”? What’s wrong with this picture?

  • Jacksonian_Libertarian

    America should payoff the $6+ Trillion in US Treasuries held by foreigners, which they accumulated due to their use in manipulating their currency to gain an unfair price advantage over American producers. But currency manipulation is a double edged sword, and what took them 40 years to create, can be reversed in America’s favor with the push of a button. This is much better than the Tariffs Trump is speaking about, as those would just raise import prices and encourage a trade war. It would be a shame to waste the sacrifices the Establishment forced the American working class to make to break open closed markets and tear down the Iron Curtain. So reversing the unfair currency manipulations would both raise import prices and lower export prices for double the effect, all while paying the foreigners back, which they couldn’t complain about. This would cause the American export sector to boom, foreign investment in America to explode, and American growth and jobs to skyrocket.

    • Frank Natoli

      Yes, but let’s be honest, the debt doubled under BHO because “the people” voted into power BHO, Pelosi and Reid, with the intent to obtain benefits from other taxpayers and, failing that, from borrowings from foreigners.

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