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Washington is warned on might of China
By Edward Alden in Washington
Published: November 9 2005 20:45 | Last updated: November 9 2005 20:45

A congressional commission that has consistently urged the Bush administration to embrace a harder policy towards China warned on Wednesday that trends in the bilateral relationship were continuing to damage the long-term economic and security interests of the US.

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In its annual report, the US China Economic and Security Review Commission said China’s growing economic might and its unfair trading practices were eroding the US manufacturing base and threatening US technological superiority.

It also concluded that China was building up its military power to confront US and allied forces in Asia and was expanding its global alliances, in part to ensure access to energy resources.

The report called for a more consistent and determined effort by the US to use its economic and military leverage “to persuade China to engage productively in the US-China relationship and to work with the United States to resolve differences”.

The commission’s conclusions have generally been dismissed by the administration of President George W. Bush, who travels to China next week. In spite of occasional warnings from the Pentagon about China’s military modernisation, the administration has favoured close co-operation with Beijing on fighting terrorism, opening trade and trying to persuade North Korea to abandon its nuclear weapons programme.

William Reinsch, a lobbyist for multinational companies who heads the National Foreign Trade Council, issued the sole dissent on the 12-member commission, calling the report’s perspective “simple and simplistic: we are right; China is wrong; the only issue is how to force them to do what we want”.

But the commission, set up by Congress when it approved permanent normal trade relations with China in 2000, has become increasingly influential in arguing that the administration’s view of China is far too sanguine. Its findings helped to rally congressional opposition to the bid this year by CNOOC, the Chinese state-run oil company, to purchase Unocal. The bid was abandoned over fears that such a deal would face a lengthy and hostile review in Washington. “While some encouraging changes are occurring in China,” the report said, “the basic differences between our countries must neither be forgotten nor underestimated.”

The report called for a series of actions by Washington to increase pressure on Beijing over its trade and military policies. It urged the US to file World Trade Organisation disputes alleging currency manipulation by Beijing and failure by the Chinese to protect US intellectual property.

It said Congress should “consider” imposing across-the-board tariffs on Chinese imports, which have been proposed in legislation by Senators Charles Schumer and Lindsey Graham.

It also called for a build-up of US military forces in Asia and closer military co-operation with Taiwan to make it clear that the US would defend Taiwan against an attack from the mainland. At present, it says, “the US government has not laid adequate groundwork to allow a rapid response to a provocation in the Taiwan Strait.”