China poses two serious threats to U.S. economic security, and we are pleased to see our congressional delegation in the thick of efforts to protect our interests.
While the economics of currency manipulation are difficult to fathom, the results are not — lost jobs and shuttered industries in Maine.
By keeping the valuation of its currency artificially low, Chinese goods are cheaper in the U.S. Meanwhile, goods made here and in other Western countries are prohibitively expensive when sold in China.
This has had an especially damaging impact on Maine’s paper industry as it tries to compete with paper made in China. But it also affects any manufacturing business in the state that sells either here or abroad against Chinese goods.
Experts say the Chinese government has pushed down the value of its currency, the reminbi, by 25-40 percent.
U.S. Sen. Olympia Snowe recently joined 14 other senators supporting legislation that would give the Treasury Department less flexibility in citing foreign countries for currency manipulation and impose stiff penalties, including tariffs against offenders.
“The silence of our government on China’s currency manipulation has become the silence of our factories,” Snowe said in a March 16 statement. She’s right.
Meanwhile, U.S. Reps. Mike Michaud and Chellie Pingree joined 128 other House members in a letter March 15 urging the U.S. Commerce and Treasury secretaries to force President Barack Obama to toughen his trade policies with China.
Last week, an economist testified to Congress that the quickest and cheapest way to put 1.2 million U.S. workers here back to work was to force China to “float” its currency to its proper level.
It’s always been said that the Chinese walk a difficult tightrope between creating jobs and maintaining political control.
But within growing anger and desperation at home, the Obama administration now faces the same high-wire act here.
It’s time to react.
On another front, Snowe has taken a lead position, along with Sen. Jay Rockefeller, D-W.Va., on a law that would require the president to work with private industry to identify and protect vital computer software and networks.
The bill comes amid sophisticated cyber attacks against Google and dozens of other U.S. high-tech companies, most likely authorized or even carried out by the Chinese government.
Frustrated by its battle with Google over censorship and its inability to develop its own similarly powerful search engine, China would love to get its hands on Google’s source code.
This is true of a host of other high-tech industries, from aerospace and military technology to biotech research.
Our leaders have long argued that while manufacturing jobs might leave our shores, they would be replaced by the high-tech knowledge jobs of the future.
The flaw in this thinking is that factories are impossible to steal, while intellectual work — music, movies and computer codes — can be stolen and transferred with a keystroke.
There is much to admire in the culture, history and industry of the Chinese people. But the Chinese government has shown itself to be a ruthless and unethical economic competitor.
Our congressional delegation should put a high priority on protecting the interests of our workers and industries.