[Congressional Record Volume 153, Number 85 (Wednesday, May 23, 2007)]
[Senate]
[Pages S6545-S6546]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      VISIT OF VICE PREMIER WU YI

  Mr. OBAMA. Mr. President, I wish to comment on the visit of Chinese 
Vice Premier Wu Yi to Washington. This visit comes at an important time 
for the U.S.-China relationship and highlights the enormous stakes 
involved.
  As I have said in the past, China's rise offers great opportunity but 
also poses serious challenges. It is critical the U.S. do all it can to 
ensure that China's rise is peaceful and its trade practices fair, and 
under those conditions, the United States should welcome China's 
continuing emergence and prosperity.
  At the same time, we must remain prepared to respond should China's 
rise take a problematic turn. This means maintaining our military 
presence in the Asia-Pacific region, strengthening our alliances, and 
making clear to both Beijing and Taipei that a unilateral change in the 
status quo in the Taiwan Strait is unacceptable. Also, though today 
China's military spending is one-tenth of ours, we must monitor closely 
China's strategic capabilities while also pushing for greater 
transparency of its defense activities.
  Although we must remain vigilant in monitoring these potential 
developments, our two nations also should strive to build a 
relationship that broadens areas of cooperation where we share mutual 
interests, as we have done to respond to the nonproliferation challenge 
posed by North Korea. And we should strengthen our ability to manage 
our differences effectively. While we must never hesitate to be clear 
and consistent with China where we disagree--whether on protection of 
intellectual property rights, the manipulation of its currency, human 
rights, or the right stance on Sudan and Iran--these differences, as a 
general rule, should not prevent progress in areas where our interests 
intersect.
  Trade and economic issues, the subject of the upcoming Strategic 
Economic Dialogue, are one crucial example of the significant 
opportunities and challenges China's rise presents.
  China is now the third largest economy in the world and is an 
increasingly formidable commercial competitor. But China also is our 
fastest growing overseas market, fueling over $50 billion in U.S. 
exports that help support thousands of export-related jobs. Many 
Americans also benefit from inexpensive Chinese products that keep down 
our cost of living, and China is an important link in the global supply 
chain that benefits U.S. commercial interests.
  But none of that constitutes a reason to turn a blind eye to those 
ares of the economic relationship that are troubling. China ran a trade 
surplus with the United States of over $200 billion last year--the 
largest ever between any two countries--accounting for nearly a third 
of our total global trade deficit. Neither America nor the world can 
accept such imbalances, and if they remain, it is inevitable that there 
will be demands for protection in America and elsewhere.
  I believe that the answer to the Chinese economic challenge is not to 
build walls of protection but to knock down barriers, demand fair 
treatment for our products and services, and increase our own 
competitiveness.
  Much of the hard work to be done lies at home. We must implement 
policies to reduce our budget deficits and increase national savings--
in order to reduce our dependence on borrowing to finance our deficits. 
We must ensure that our companies and workers have the tools they need 
to compete in the global economy. Among other things, this means 
stepping up our investments in education, training, and science and 
technology. We must make sure those Americans whose livelihoods are 
threatened by our changing economic relationship with China have access 
to the resources and support they need.
  But China must bear a substantial share of the responsibility for 
restoring greater balance in its economic relations with the United 
States and the rest of the world. Just as the United States cannot 
unilaterally restore balance to China's economic relations, the United 
States alone cannot mute protectionist demands. China must itself act 
to bring greater balance in its global trade, so that all countries 
benefit from its growth.
  I commend Treasury Secretary Paulson for pursuing a strategic 
economic dialogue with China, but it must produce meaningful and 
lasting results. Even as we develop a better understanding of how 
Chinese leaders view their own economic priorities, we need to confirm 
that these same leaders understand how the policies they pursue affect 
the United States and the global economy.
  As a principal beneficiary of globalization, China needs to support 
and strengthen the international economic system as well. For example, 
it can and should take steps to increase consumption--drawing in more 
imports and reducing dependence on exports for growth. China needs a 
modem financial system to achieve this. American companies can help 
develop such a system but not if the playing field is unfairly tilted 
toward Chinese companies.
  China can and should contribute to bolstering the world's economic 
system by allowing its currency, the renminbi, to be determined by 
market forces. Today, Beijing amasses as much as $20 billion a month in 
foreign currency, with the effects of keeping the renminbi 
substantially undervalued and giving China an undue advantage in trade. 
The recent move to widen the currency trading band is useful, but China 
must move more quickly toward a market-based currency.
  China can and should contribute to the success of globalization by 
providing stronger protection of intellectual property rights. The fact 
that 80 percent of the pirated goods seized by U.S. Customs come from 
China is unacceptable. It suggests just how much work needs to be done 
in this area.
  China can and should contribute to the world's economic health by 
altering its energy policies--addressing the needs of its people at 
home while not exacerbating problems abroad. Domestically, China's 
priority should be to increase energy efficiency. A system

[[Page S6546]]

that requires twice as much energy as the United States to produce each 
dollar of economic growth is problematic.
  At the same time, China needs to find cleaner sources of energy. 
Sixteen of the twenty cities with the worst air in the world are in 
China, and China is poised to overtake the United States in greenhouse 
gas emissions in 2 to 3 years. Just this week, a new report found that 
worldwide carbon dioxide levels have accelerated rapidly since 2000, in 
part because of China's reliance on coal.
  China should rely on international energy markets to provide its oil 
and gas imports and work with the United States and others to develop 
common approaches to energy supplies and security. To continue seeking 
privileged arrangements with countries such as Sudan and Iran--states 
that commit gross human rights violations and that threaten to develop 
weapons of mass destruction--is to dramatically complicate efforts of 
the international community to address these questions and, in effect, 
to ratify these deeply troubling practices.
  I hope Treasury Secretary Paulson can persuade the Chinese to change 
their practices. We will all be better off with a China whose emergence 
strengthens the international system rather than disrupts it.
  China's economic growth is a good thing for China's 1.3 billion 
people, and can be a good thing for the United States. China is 
increasingly a constructive participant in the international system, 
and that trend should be supported and encouraged. But China cannot 
expect the United States and its overseas partners to tolerate unfair 
practices and glaring imbalances triggered by its rise. China needs to 
take steps that not only benefit its people but sustain the 
international system from which China itself benefits so greatly.

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