Washington Policy Makers Seek Great Wall Trade Balance

Filed in archive Policy on April 20, 2006

Despite the earlier impressive checkbook diplomacy efforts of Wu Yi, China's vice prime minister and now coupled with President Hu Jintao's whirlwind charm offensive US tour, it's apparent from some sources at the influential U.S.-China Economic and Security Review Commission, that America is going to use "more muscular" enforcement against China for violations of trade rules according to testimony presented by Assistant U.S. Trade Representative Timothy Stratford.

Stratford said that the U.S. and China have entered a new, more mature phase of their economic relationship. The short translation: Last year China piled up nearly $200 billion trade surplus with the United States and still counting.

The trade deficit is prompting Washington to get China to act faster to raise the value of the yuan, its currency. The U.S. Congress and the Commission now appear to be responding to the wave of economic nationalism sweeping across Pennsylvania Avenue. Furthermore, a few weeks ago, I also met with Scott Bunton, the Executive Director of the Commission to discuss upcoming hearings on China and Washington's need for more information on investments into Chinese technology companies.

Sand Hill Road VCs might make note of these sensitive scheduled future hearings of the Commission since previous policy recommendations brand China as an economic villain and this includes a closer scrutiny of the Capital markets landscape.

Hu may need more than charm to ease the increasing protectionist pressures mounting inside the congressional corridors.