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China Daily Website

US business leader urges closer ties with China

Updated: 2012-01-14 07:34
By Tan Yingzi and Chen Jia ( China Daily)

WASHINGTON / BEIJING - The United States should advance economic ties with China to reduce the adversarial nature of the relationship between the world's two largest economies, the head of the US Chamber of Commerce said.

"Our country should make a major effort to attract global investors," said Thomas Donohue, president and CEO of the chamber.

"Foreign investment already supports 5 million direct jobs and millions of indirect jobs. We need to negotiate more bilateral investment treaties ... India and China should be high on that list," Donohue said during his annual State of American Business speech on Thursday.

He said that the improvement of the US economy is too weak to put the nation back to work and the organization expects economic growth of 3 percent by the end of the year.

But in the current fierce presidential election campaign, criticism of China about its currency and military growth has raised concerns and opposition from Beijing. Last week, the new Pentagon strategic review named China, along with Iran, as potential threats to US security.

Analysts warned that relations are facing a very difficult year with political transitions in both countries and several geopolitical challenges, such as the South China Sea, the Korean Peninsula and Iran.

The chamber, which represents the interests of more than 3 million US companies and industry associations, will continue to strengthen trade ties with China, Donohue said.

"If we are advancing our economic relationships, then there is going to be less concerns about the adversarial relationship but more about cooperation to deal with the geopolitical issues in the region and around the world. We need to do both, but let's put more energy into the trade and investment side," he said at a news conference after the speech.

John Ross, an economist and a visiting professor at Shanghai Jiao Tong University, said the US government and the Federal Reserve require Chinese cooperation to deal with key issues in the international economy.

"If they do not receive such cooperation, negative economic consequences will be felt in the US," Ross said.

Last year, China appreciated its currency about 12.5 percent against the US dollar after purchasing power of the two currencies is factored in.

The two countries have moved closer on the currency issue, the trade deficit between the two is becoming closer, and exports to China are growing, he said.

Despite this, "it appears that whether it's Republicans or Democrats, whether it's the House or the Senate, especially in the current presidential race, everybody seems to have something to say to China. It's like checking the box, that if I say something bad about China, I would be tough on that", he said.

As China has 1.3 billion people, a massive growth of the middle class and tremendous opportunities for US companies, "we should continue vigorous and strong exchanges with China to protect our interests and advance our economy", he said.

Though there is a round of China bashing among Republican presidential candidates - such as Mitt Romney's tough position on the Chinese currency and foreign policy - many experts agree that neither foreign policy nor China will become a central issue in the election.

Wang Haifeng, director of the International Cooperation Center affiliated with the National Development and Reform Commission, said Sino-US trade should not be seen as political chips for either the House or Senate.

"It is purely an economic issue, and steady growth of bilateral trade will benefit both," Wang said.

Philip Levy, adjunct professor of international and public affairs, Columbia University, said what politicians said during campaign may not reflect what they really thought.

"Where you stand is where you sit," Levy said.

US President Barack Obama was very tough on the Chinese currency when he was a Senator, but his administration has done a good job by not labeling China as a currency manipulator, Levy said.

"If Romney is elected as US president, it is hard to tell whether he will keep his hard line with new constraints."

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