The American Iron and Steel Institute (AISI) and the Steel Manufacturers Association (SMA) released a study Tuesday describing the negative impact of China's economic policies on the US and world economies. The study is entitled: Rebalancing the US-China Economic Relationship: A Steel Industry Perspective.
The groups say that the study examines in detail “the policies that China has pursued to give its exports an artificial advantage in international competition, including manipulating the value of its currency, subsidizing export-oriented industries, and failing to enforce environmental laws.” In particular, the study analyzes the effect that these policies have had on the United States. The groups say that while the study uses the steel industry as an example of China's policies, its conclusions are generally applicable to the US manufacturing sector.
“The study shows that China is violating the basic rules of the international trading system,” said Thomas J. Gibson, president and CEO of AISI. “Through its policies of government ownership and subsidies, weak and inadequately enforced environmental rules and its manipulation of currency, border measures and raw material markets, the government of China has provided Chinese exports a tremendous artificial edge in world markets, at the expense of the United States and other countries.”
“The US and other open economies need to make it clear that success in global competition can no longer depend upon government interventions,” Thomas Danjczek, president of SMA, stated. “It is time for the US to rectify a steeply tilted international playing field, where private US manufacturers cannot be expected to compete successfully against foreign companies that are reliant upon currency manipulation, and are propped up by major investment by their governments,” said Danjczek.
“China has used all sorts of measures to boost its exports,” explained Alan H. Price, partner at Wiley Rein LLP and one of the authors of the study, “including currency manipulation, export restrictions, and straight-out subsidies. Because of this, China has accumulated foreign exchange reserves worth more than $2 trillion. Now the Chinese government has announced that it intends to use those reserves to help Chinese companies expand around the world. This makes it as clear as possible that China is not trading on the same terms as the United States and the rest of the world.”
The study is being released in advance of the upcoming meeting of the US-China Economic and Security Review Commission, which periodically reviews issues affecting the two countries. It is available on the AISI Web site at www.steel.org, and on the SMA Web site at www.steelnet.org.