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China, US to cooperate on yuan: Bush
(AP)
Updated: 2005-11-21 16:06
COSTS AND BENEFITS
U.S. President George W. Bush and China's
President Hu Jintao make statements to reporters after their meeting in
the Great Hall of the People in Beijing November 20,
2005. [Reuters] |
China accounts for about a quarter of the U.S. deficit. But Chinese officials
and independent economists say this largely reflects a profound change in
manufacturing patterns in recent years to take advantage of cheap Chinese labor.
Such "processing trade," which accounts for more than half of Chinese
exports, would simply move to other low-cost rivals in Asia if the yuan were
revalued sharply, but jobs would not be regenerated in the United States,
Chinese officials say.
They also say pressure for a stronger yuan also neglects the benefits that
U.S. consumers derive from China's low costs.
Wal-Mart Stores Inc. alone, were it a country, would have been the
sixth-largest importer of made-in-China goods in 2004. Its purchases of $18
billion were almost twice those of France, according to figures from brokerage
CLSA Asia-Pacific Markets.
Economists say western pressure for a much stronger yuan is also
self-defeating because about 60 percent of all Chinese exports are churned out
by foreign-owned firms.
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