The U.S government, all businesses, and consumers have a role to play in combating unfair trade policies in china, which are gradually weakening the economy. This is because china is stealing jobs and gaining unparallel advantage in the economy. Some of the steps that the government can take include declaring china a currency manipulation. This could be done either by legislative or executive action. After this, some sanctions could follow after this, in the case when china will fail to adhere to this. If China were to lower their currency, this will mean that the prices of its exports will be lower, a factor that could create a huge deficit for the government of the US (Trade Form, 2012).
At the end of it, US could lose a million of jobs.It has also been noted many U.S companies that conduct their businesses in China have “corporate codes of conduct,” where most workers suffer serious abuses, work in dangerous conditions for low wages and have no rights to join real unions. Not only do China’s practices lower even further production costs but they violate most so-called codes of conduct because in a “wink-wink” arrangement. It is a fact that market economy cannot function if there are no rules to govern the conduct of the China. The US administration should call for China to open up its markets to U.S. exports, and put an end to its industrial policies that discriminate against U.S. and other countries’ products both in China and in third country markets. China should abandon its protectionist policies that disadvantage U.S. manufacturing companies, employees and communities.
For the government to achieve open and free trade, it is important for China to end its import barriers on industrial goods, export restrictions on raw materials, limits on foreign investment, state subsidies to its manufacturing industries, and undervaluation of its currency (Takatoshi, 2005). The U.S. Government must also ensure that U.S. companies have the ability to obtain relief from the injurious effects of Chinese trade and industrial policies. It is important for the US government to recognize the corporate risk that might come as a result of off shoring China. Obvious risks include the loss of the company’s intellectual property, either through outright theft or via China’s policy of forced technology transfers and forced relocation of research and development to Chinese soil. Other risks range from endemic corruption to severe pollution, to the need to scale China’s Great Wall of Protectionism.
It is important for American executives off shoring to China must remove their rose-colored glasses and do a far more comprehensive risk assessment, such a sober look at the real risks associated with off shoring to China should in turn power a new “reshoring” that brings jobs back to America. It is also important for the government to hold talks with the Chinese government. The U.S.-China relationship is critically important Senate (Committee on Finance, 26 July 2007). But much work needs to be done to strengthen that relationship and improve U.S. market access into China. It will be beneficial if U.S companies can have the necessary access which can be measured by sales, jobs, as well as exports. It will also be beneficial for the government to ask china to shun away their policies which are meant to retaliate against U.S companies.
References
Senate Committee on Finance, (26 July 2007). “Finance Panel Passes Bipartisan Currency Legislation” < http://finance.senate.gov> Retrieved on November 21, 2012
Takatoshi, ITO (2005). “The Chinese Currency Reform and East Asia: Steps Toward Regional. Exchange Rate Stability.” Research Institute of Economy, Trade and Industry.. http://www.rieti.go.jp/en/papers/contribution/ito/02.html [Retrieved on November 21, 2012
Trade Form (2012) First Step in China Trade Policy Stop Currency Manipulation available at http://www.tradereform.org/tag/currency-manipulation/ [retrieved on November 21, 2012]
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