[Congressional Record (Bound Edition), Volume 157 (2011), Part 14]
[Senate]
[Pages 19325-19327]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              CHINA POLICY

  Mr. BROWN of Ohio. Mr. President, 10 years ago this month--10 years 
ago actually tomorrow, I believe--the People's Republic of China 
officially joined the World Trade Organization. American businesses, we 
were told, would gain new access to Chinese markets through the removal 
of trade barriers, through increased transparency, through more 
stringent protection of intellectual property rights.
  China promised to follow the rule of law, to reform its legal system, 
and, in turn, would gain new access to global markets. At the time of 
joining the World Trade Organization, China made a number of promises. 
Chinese leaders pledged to reduce trade barriers and open markets. They 
promised to increase transparency, protect intellectual property 
rights, and reform their legal system.
  Supporters of the People's Republic of China, including a strong 
majority, unfortunately, of Members of this body and a much thinner 
majority in the House of Representatives--other supporters of the 
People's Republic of China were most of America's, almost all of 
America's largest corporate CEOs--argued that the WTO membership would 
bring human rights and freedom and the rule of law to China.
  Now 10 years later we see a very different picture, a picture of a 
number of Members of the House in those days and some Members of the 
Senate and some opponents to allowing China into the World Trade 
Organization. We have seen something very different. American workers 
have seen millions of jobs shipped to China. Factories in places such 
as Youngstown and Charleston and Huntington and Dayton have moved to 
Wuhan and Shenzhen and Shanghai, with final products sold back to the 
United States.
  Think about this. The business plan of a number of American 
corporations is to shut down production in Mansfield, OH, and in 
Zanesville, OH, and move that production to Beijing,

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China, set up companies there, and ship products back to the United 
States. To my knowledge, never in history has there been a country 
where such a huge number of companies have set up that business plan. 
Think about that--shut down production in the country where you are 
located, lay off workers who have made you a successful company, hurt a 
community by closing down that plant, doing terrible damage to the 
schools, to the police departments, to the city services and all of 
that, and move your production to another country because you can work 
there more cheaply and sell products back to the United States. To my 
knowledge--and I could be mistaken about this, but nobody has ever 
shown me otherwise--to my knowledge, never in world history has that 
been the business plan for so many companies.
  American manufacturers that stay here have been undermined by a flood 
of cheap Chinese imports priced artificially low.
  When a large corporation moves to China, so often that corporation's 
supply chain--the tool and die shop, tool and die maker, a machine 
shop--a small manufacturer that makes components and that sells to the 
larger company does not have the wherewithal to follow it to China, so 
they lose one of their biggest customers.
  Those American manufacturers that stay here have been undermined by a 
flood of cheap Chinese imports priced artificially low. Some of those 
Chinese imports came from American companies that moved overseas to 
China.
  Chinese citizens so often face poor work conditions, continual human 
rights violations. The country's sole Nobel Peace Prize winner is 
languishing in prison.
  The big winners? The big winners are the multinational corporations 
here that have outsourced jobs, and the other big winner is the Chinese 
Communist Government and the apparatchiks they have enriched. Think 
about that. The big winners in this China trade policy are large 
American corporations that have outsourced jobs to China and the 
Chinese Communist Party, which apparently seems to be their allies in 
this, and the people in the Chinese Communist Party, the high-ranking 
apparatchiks.
  So while American companies that stay here and American workers are 
following World Trade Organization rules intended to provide a common 
set of laws to ensure a level playing field for global trade, the 
Chinese are gaming the system. It is clear that China does not live up 
to its promises, does not live up to the unrealistic expectations of 
its supporters.
  Far from becoming freer, the Chinese people are burdened with limited 
rights to basic freedoms of speech, religion, and assembly. I can't 
count the number of CEOs whom I saw walk the Halls--I was in the House 
of Representatives--of Congress and say: You know, if we pass PNTR, we 
are going to see freedom, all of this capitalism in China. All of these 
jobs in China are going to bring freedom--freedom of speech, freedom of 
religion, freedom of assembly in China.
  No, it has enriched the country of China, to be sure. It has 
especially enriched the Communist Party, enriched the People's 
Liberation Army, enriched some of the capitalists in China in this 
Communist Party system. And it is getting worse. From the harsh 
crackdown on human rights lawyers and activists after the Arab Spring 
in the Middle East, to the brutal policies in Tibet that have led to a 
recent wave of self-immolations--imagine the depth of feeling and 
passion and hopelessness and anger at an oppressive government that 
people who have such strong feelings would actually set themselves on 
fire in protest. From the crackdown on human rights lawyers, to the 
brutal policies in Tibet, the Chinese Community Party shows no sign of 
easing its grip on the Chinese people. Not only did their membership--
their joining the WTO--not bring freedom and democracy to China, it did 
not bring fair trade either.
  China has flouted WTO rules. China has gamed the system to its 
advantage. While China has chosen to comply with some WTO rules, 
overall the list of China's WTO violations is a long one: rampant 
intellectual property theft, massive subsidies for China's exports, 
hoarding of rare earths and other raw materials. China has refused to 
commit to the WTO's Agreement on Government Procurement.
  I have stood here, as you have seen, Mr. President, in your time in 
the Senate, arguing for ``Made in America'' language so that when 
taxpayer dollars are spent buying products, those products should be 
made in America, paid for by U.S. taxpayers. I have heard conservative 
Washington politicians defending China, for all intents and purposes, 
saying: No, that would create a trade war, even though China will not 
sign on to an agreement on government procurement, which is exactly 
what their ``Made in China'' policy is all about. These violations not 
only show China's lack of respect for the rule of law, they also cost 
American jobs, and they also tend to stymie our economic growth.
  American intellectual property-intensive firms alone have lost some 
$50 billion to intellectual property rights violations. Those same 
firms are reporting that better intellectual property enforcement could 
lead to almost 1 million new jobs. Some of the worst hit companies are 
in my State, struggling to compete against a country that manipulates 
its currency and subsidizes its manufacturers.
  Given our companies' well-founded fear of retaliation by Chinese 
regulators and companies if they speak up, we in government must give 
voice to their concerns. Let me explore that for a minute.
  When we have launched--typically a labor union in the United States 
will launch a petition for a trade complaint, if you will, alleging 
violations by China of trade rules. Often the American company where 
these workers work is unwilling to join that petition. Why? Because 
they do business in China, and they know China will, in some cases, 
exact some kind of revenge against them. So our companies are not 
willing to stand up to the Chinese because they know what the Chinese 
will do when they are doing business in China. So it is up to us, as 
these companies' representatives, as these workers' representatives, as 
these community representatives, to stand up.
  Probably the most damaging of China's violations is its continual 
manipulation of its currency. By deliberately holding down the value of 
its currency to boost exports, China is not only violating WTO 
commitments, they have built the largest trading surplus in history to 
the detriment of other leading trading partners.
  The Senate fought back this fall by passing the Currency Exchange 
Rate Oversight Reform Act. I authored this legislation with a 
bipartisan group of Senators--Senator Snowe from Maine, a Republican; 
Senator Schumer from New York, a Democrat; Senator Graham of South 
Carolina, a Republican; Senator Sessions of Alabama, a Republican; 
Senator Stabenow of Michigan, a Democrat; Senator Casey of 
Pennsylvania, a Democrat, and several others. This bill is the largest 
bipartisan bill that passed the Senate this year. It passed with 63 
votes--joined, in fact, by the junior Senator from my State. Senator 
Portman, former Trade Representative in the Bush administration, voted 
for this bill. This bill would crack down on China currency 
manipulation and provide an opportunity for Republicans and Democrats 
to come together to put American jobs and American workers first.
  They said it represented the largest bipartisan jobs bill passed this 
session of Congress.
  Currency manipulation provides an unfair subsidy to Chinese exports--
of up to 40 percent, according to most economists. Almost all 
economists agree it is at least 25 percent. C. Fred Bergsten, an 
economist with the Peterson Institute for International Economics, who 
is fairly conservative, has asserted that China's intervention in 
currency markets and other subsidies they have provided makes up the 
most protectionist policy of any major country since World War II.
  American politicians and CEOs are always afraid of standing up to the 
Chinese. They say we will look protectionist or that it looks as though 
we

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are starting a trade war. When Fred Bergsten, a mainstream economist, 
says that what China does is the most protectionist policy of any 
country since World War II, it is time we stood up and forced them to 
play fair. That is not a trade war. That comes from China. They have 
been waging a trade war against the United States for 10 years. That is 
why we have seen our budget deficit grow from double figures a decade 
ago to more than a half billion dollars a day, day in and day out, 7 
days a week.
  Additionally, American manufacturers seeking to sell products to 
China--our Nation's fastest growing export market--are hit with the 
same percentage in what amounts to an unfair tariff. If a company in 
Brunswick, OH, wants to sell products in China, they are hit with a 25-
percent or larger currency tax and currency tariff. So the product 
costs 25 percent more, at least. When a Chinese company wants to sell a 
product in Brunswick, competing with that company, they get a 25-
percent bonus or advantage. That is hardly a way to practice fair 
trade.
  A report released this fall estimates that our trade deficit with 
China, exacerbated by Chinese currency manipulation, has caused the 
loss of more than 2.8 million American jobs in the past 10 years--with 
two-thirds of the lost jobs in the manufacturing industry. The 
Presiding Officer, when he goes to Altoona, Bethlehem, or if he comes 
to Dayton or Toledo, sees the kind of damage this trade policy has done 
to American manufacturing. All of our problems in manufacturing are not 
because of our relationship with China and because they have gamed the 
system, but millions of jobs here have been lost and undermined because 
of China's gaming the system.
  The first President Bush said a billion dollar trade deficit or 
surplus is equivalent to 13,000 jobs. So when we have a greater than 
$200 billion persistent year-in and year-out trade deficit with China, 
that means we sell $200 billion worth of fewer goods to them than they 
sell to us. Do the math. It is 13,000 jobs per billion dollar budget 
deficit.
  Addressing currency manipulation through the trade remedies included 
in our bill, cosponsored by Senators Graham, Snowe, Schumer, Sessions, 
Hagan, Casey, and others, would provide immediate relief to American 
job creators. A report released earlier this year showed that 
addressing currency manipulation would support the creation and 
retention of more than 2 million American jobs, without requiring any 
government spending. That is why this is such an important jobs bill, 
because it is not spending any taxpayer dollars, it is just saying 
level the playing field for our companies and our workers dealing with 
China.
  After years of China gaining benefits of WTO membership without 
adhering to its rules--and they promised they would under the rule of 
law 10 years ago this week when they joined the WTO--after years of 
them getting membership and getting the benefits of WTO membership, 
without agreeing to its rules, it is time for Congress and the 
administration to act in our Nation's interest. The Congress should 
pass a bill and the President should sign the bill.
  American workers and American manufacturers can compete with anyone. 
But they cannot compete on a playing field that is far from level as 
long as we continue to let China do what it wants without 
repercussions.
  Over the last 10 years, China has sought to sidestep and reshape the 
WTO to benefit China at our expense. That is not competing, that is 
cheating. We must act while we still have a chance.
  I yield the floor.

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