China rejects U.S. trade complaints

[maddezmom]

BEIJING - China on Tuesday rejected U.S. complaints that it is failing to live up to market-opening commitments on the eve of a visit to Beijing by U.S. Treasury Secretary Henry Paulson to discuss currency and other contentious issues.

"We have implemented our obligations and commitments earnestly and have abided by the rules of the World Trade Organization," Foreign Ministry spokesman Qin Gang told reporters.

Qin rejected a U.S. government report released Monday that said China has failed to live up to WTO pledges and warned that Washington would not hesitate to pursue sanctions.

The report came amid a flurry of news on China's soaring trade surplus and complaints about market access that highlighted the complexity of the challenge facing Paulson and his Chinese counterparts.

more:http://news.yahoo.com/s/ap/20061212/ap_on_bi_ge/china_us_trade

[rodeodance]

1. so, China tells the US to take a walk.

[NewJeffCT]

2. We have so much leverage with them

NOT

They don't even have to threaten to sell off their dollars - they could just stop buying them and send our economy into a recession overnight.

And, a month or so later, they'll have the White House on their knees and China can get concessions from the US on a host of issues.

Thanks to the Reagan-Bush deficit.

[madrchsod]

3. we have nothing to offer them

they want no part of our "service industries" and the counterfeiting is a huge business that keeps the young chinese middle class workers happy. not much the usa can do about this other than move the business to vietnam and any other country that is willing to let the workers work for nothing

[Jack_DeLeon]

4. This Christmas I am happy to report...

that I did not buy anyone some cheap made in China trinkets.

Its pretty sad how many Americans are so willing to fund a likely future enemy just because they want the cheapest thing they can find.

[redqueen]

6. shortsightedness.

it's been a popular trend for decades and shows no signs of slowing.

[Vidar]

5. "Failure to live up to WTO pledges" may well be a good thing,

considering what a world-destroying monstrosity the WTO is.

[oblivious]

7. China's banking situation is pretty grim as it opens to foreign banks this week.

China's banks open to competition
December 11, 2006

SHANGHAI, China (AP) -- China's banking industry officially opens to full foreign competition on Monday, a landmark for the country's financial sector and a day of reckoning for the country's mostly state-owned banks.

The world's biggest banks -- Citigroup Inc., HSBC and Bank of America among them -- have spent billions of dollars and devoted huge resources to positioning themselves for this moment.
http://edition.cnn.com/2006/BUSINESS/12/10/china.banks.ap/

China's banks are the Achilles heel of the global boom
12/12/2006

...Bill McDonough, the ex-chief of New York Federal Reserve, let slip at a conference in Italy this week that China's rickety credit structure was the biggest single menace to the world economy.

...Investment is running at 43pc of GDP, leaving an oversupply of factories and office blocks, like Japan in the 1980s, but with even less market discipline. Ernst & Young calculated the bad debts at more than $900bn in a report this year but was forced to recant by Beijing.

Gordon Chang, author of The Coming Collapse of China, said the regime had embarked on a suicidal course, living from one day to the next from fear that 140m footloose urban migrants could turn violent.

"China is just piling up more and more non-performing loans, and eventually it's going to come crashing down, because economically this doesn't make any sense," he said. "You can't blow up your balance sheet at 20pc to 25pc a year with a well-managed bank in a well-regulated society. How the devil can you do it in China? This is just ludicrous," he said.

...Mr Paulson's brief from the Smoot-Hawley protectionists on Capitol Hill is to scream so loudly at the Chinese over their $168bn trade surplus that they bend to demands for a stronger yuan. He knows this is the surest path to financial crisis for both countries: for America because China's central bank now holds more than $700bn in US bonds and dollar instruments, including $342bn in US Treasuries. China is now global lender of last resort.

...Less understood is that a sharp rise in the yuan could be the last straw for China's banks, sitting on a network of loss-making factories living off marginal exports.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/11/ccview11.xml

[David__77]

9. China's high investment rate is a good thing.

It should keep 40+% of GDP in investment. This is how the Soviet Union, Japan, and others quickly transformed from feudal to modern, powerful economies with a solid industrial base. When China reaches the level of moderately developed country, it should reduce this to 30% or so and diversify the consumer sector to avoid Japan syndrome, but it's still 40 years from that point.

And the US has nothing to complain about from US-China trade. It has chosen its course and must deal with the consequences of a service economy.

[amandabeech]

8. Why did anyone think that China would live up to any promises

that might adversely affect it?

They are the middle kingdom and we are the barbarians, after all.