Barack Obama on China

Last Updated : Jul 24, 2012

Summary

The issue of China involves trade policy, monetary policy, and foreign policy. Overall, President Obama has addressed China's trade and currency policy through the World Trade Organization (WTO) in a reasonably aggressive manner. Since taking office, the Obama administration has raised 10 complaints with the WTO and 7 of those have been addressed towards China. In contrast, the Bush (W) administration brought 23 cases to the WOT and 7 were directed at China.

2008 Presidential Election

In Senator Obama's campaign literature, he was straightforward about the fact that the Chinese government was manipulating it's currency to give the country an upper hand in trade. Senator Obama also stated that China must be pressed on human rights and intellectual property and that if Taiwan chose to rejoin China, it must do so of it's own free will.

In 2005, Senator Obama voted on two pieces of legislation relating to Obama. First, Senator Obama voted against an amendment to authorize appropriate action if the negotiations with the People's Republic of China regarding China's undervalued currency were not successful. Second, Senator Obama voted in favor of an amendment to prohibit any funds from being used by the Export-Import Bank of the United States to approve a loan or a loan guarantee related to a nuclear project in China. During his time in office, Senator Obama also co-sponsored two pieces of legislation relating to condeming violence in Tibet at the hands of China.

Secretary Geithner

In his confirmation testimony, Treasury Secretary Geithner supported President Obama's commitment to stand up to China by stating that both he and President Obama understood that China was indeed manipulating it's currency.

Trips to China

The first official contact of note between the Obama administration and China was an April 2009 Strategic and Economic Dialogue agreement. The two nations complemented each other on the measures taken to deal with the economic crisis and agreed that discussions needed to take place on climate change, non-proliferation, and economic issues.

In November of 2009, President Obama traveled to China for an official visit. While there, President Obama answered questions for students, visited the Great Wall of China, and visited his half brother, but did not address issues of currency and human rights openly.

In February of 2010, President Obama met with the Democrats in the Senate and was asked about Chinese currency manipulation and trade inequities. President Obama stated that Chinese currency manipulation and respect for intellectual property rights needed to be addressed. He also stated that we would need to sell our goods to the Chinese and that actions to close our markets off to China would not be beneficial.

People to People Agreement

In May of 2010, a people to people agreement was made to send 100,000 US students to China and 10,000 PhD students from China to the US. In June of 2010, China announced that they would allow some flexibility in the Yuan, a move that President Obama was supportive of and applauded.

IP and Currency

In September of 2010, President Obama met with the Prime Minister of China and was more forceful about the need for China to allow it's currency to achieve it's natural exchange rate. He was reported as stating that if China did not address the exchange rate issues, the US would consider measures in Congress to place a tariff on China goods equivalent to the benefit of the currency manipulation.

In January of 2011, the White House put out a fact sheet noting the number of jobs that would be created in the US if the Chinese enforced intellectual property rights on software and other items. That same month, the Chinese President was received by the Obama administration in an official state visit. President Obama was more vocal there noting China's human rights violations.

In February of 2011, many Senators and Congressmen expected China to be branded as a currency manipulator in a semi-annual report on currency and exchange rates. Instead, the Treasury Department noted that recent Chinese efforts were moving the currency's value but that more needed to be done for it to reach it's true value faster.

WTO Complaints

The Obama administration has been active in pleading its case before the WTO. In the seven cases brought before the WTO, the administration has been vey successful in showing that China has been routinely violating its obligations in relation to the WTO. Links to the cases are given below.

 

Campaign Website Statements

 

Testimony of Tim Geithner

In January of 2009, Treasury Secretary Nominee Tim Geithner noted in written testimony before Senate Finance Committee that President Obama believes that China is manipulating their currency.

 

U.S.-China Strategic and Economic Dialogue

In April of 2009, President Obama met with President Hu on the sidelines of the G20. President Obama announced that he had been invited by the President of China to visit that country and that he would be accepting that offer later in the year. President Obama announced that the two countries were establishing a US-China Strategic and Economic Dialogue and that the countries had agreed on the need to discuss international regulatory policies, non-proliferation policies, and economic policies.

 

2009 Visit to China

On November 15-18  of 2009, President Obama visited China. Upon arriving, the President had meetings with President Hu Jintao and then spoke at a press conference.

On November 17, President Obama spoke at a town hall with Students. At that meeting, the President gave a speech and took questions.

 

 

Closing Off Chinese Market a Big Mistake

In February of 2010, President Obama spoke to the Democrats and responded to a question about trade with China by stating that cutting off our trade to China would be a mistake. He also spoke about the value of the Chinese currency. The full video of the press conference is available here.

 

People-to-People Engagement

In May of 2010, Secretary of State Clinton signed three agreements between the US and China:

  • Memorandum of Understanding Establishing High-Level Consultation on People-to-People Exchange,
  • Renewal of the Implementing Accord for Cultural Exchange, and
  • Renewal of the Agreement for Cooperation in Educational Exchanges.

These three agreements would create a an initiative to get 100,000 US students over to China and provide 10,000 bidge scholarships to PHD candidates from China to the US.

 

Response to Yuan Flexibility

In June of 2010, President Obama reacted to an announcement by the Chinese government that it would make the exchange rate between the US and China more flexible with optimism.

 

Meeting with Chinese Prime Minister

In September of 2010, President Obama's senior advisor to Asia - Jeff Bader - commented on meetings between the US and China concerning currency manipulation. Mr Bader stated that an entire 2 hour meeting had been devoted to Chinese currency practices and that at one point, President Obama stated the following:

That statement may have been a reference to legislation that Congressional Democrats were considering to place some tariffs on Chinese goods to offset the benefit of the currency manipulation. 

 

US-China Fact Sheet on Economic Issues

In January of 2011, President Obama's Press Secretary released a statement noting China's stance on intellectual property rights and other items.

 

US-China Fact Sheet on Climate Change

In January of 2011, the White House issued a series of fact sheets on China-US relations and noted that the two countries were cooperating on climate change policies.

 

2011 Chinese State Visit

In January of 2011, President Obama received the Chinese President Hu Jintao and his delegation. In the welcome ceremony, President Obama stated that he "welcomed China's rise." 

On the 19th of January, President Obama held a press conference with President Hu and the two men answered a number of questions. When asked, President Obama dealt with the issue of human rights head on and stated that nations are better when human rights are observed.

The issue of currency manipulation was also addressed and President Obama openly stated that the Yuan was undervalued.

 

Branding China a Currency Manipulator

In February of 2011, the Treasury department released it's semi-annual report on international exchange rates. Much of the Senate expected the Obama administration to label China as a currency manipulator. Instead, the report noted the measures taken in June of 2010 to make the Yuan more flexible. However, the Treasury department did note in the report that progress was too slow.

 

WTO Complaints

The Obama administration has raised 10 compaints against China through the WTO.  Seven of those compainst have been lodged against China. Of those seven complaints, two were related to the exporation of rare earch or raw materials from China, one was related to steel, one was agricultural, one was related to electronic payments, one was related to windmill equipment, one was related to broiler products, and one was related to automobile duties.

The outcomes of those compaints have been generally positive for the US. The WTO has sided with the US in a number of these complaints.

Date Topic
June 2009 Measures Related to the Exportation of Various Raw Materials
September 2010 Certain Measures Affecting Electronic Payment Services
September 2010 Countervailing and Anti-Dumping Duties on Grain Oriented Flat-rolled Electrical Steel from the United States
December 2010 Measures concerning wind power equipment
September 2011 Anti-Dumping and Countervailing Duty Measures on Broiler Products from the United States
March 2012 Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum
July 2012 Anti-Dumping and Countervailing Duties on Certain Automobiles from the United States

 

Voting Record

Amendment - Chinese Currency

In April of 2005, the Senate voted on an amendment to authorize appropriate action if the negotiations with the People's Republic of China regarding China's undervalued currency are not successful. The phrase "appropriate action" is not defined. The measure failed 33-67. Barack Obama voted against this amendment.

Barack Obama voted against this amendment.

Amendment - Export-Import Bank

In July of 2005, the Senate voted on an amendment to prohibit any funds from being used by the Export-Import Bank of the United States to approve a loan or a loan guarantee related to a nuclear project in China. The amendment failed 37-62. Barack Obama voted in favor of the amendment.

Barack Obama voted in favor of the amendment.

 

Sponsored and Cosponsored Legislation

Session-110; Bill Number-S Res 504; Tibet and China - Cosponsor

A resolution condemning the violence in Tibet and calling for restraint by the Government of the People's Republic of China and the people of Tibet.

Session-110; Bill Number-S Res 504; China and Tibet - Cosponsor

A resolution condemning the violence in Tibet and calling for restraint by the Government of the People's Republic of China and the people of Tibet.

References

[1] Website: CBS News Article: Obama: "We Welcome China's Rise" Author: Stephanie Condon Accessed on: 02/28/2011

[2] Website: WhiteHouse.gov Article: STATEMENT ON BILATERAL MEETING WITH PRESIDENT HU OF CHINA Author: NA Accessed on: 03/07/2011

[3] Website: State.gov Article: Secretary Clinton and Chinese State Councilor Liu Celebrate People-to-People Engagement in Beijing Author: Spokesman - State Department Accessed on: 03/07/2011

[4] Website: Bloomberg.com Article: Obama Tells Senate Democrats They ‘Have to Lead Author: Roger Runningen and Nicholas Johnston Accessed on: 03/07/2011

[5] Website: BBC News Article: Obama vows 'much tougher' stance on US-China trade Author: NA Accessed on: 03/07/2011

[6] Website: The Huffington Post Article: Obama's Question Time With Senate Dems (VIDEO AND FULL TEXT) Author: NA Accessed on: 03/07/2011

[7] Website: Financial Times Article: Obama urges Wen to act over renminbi Author: Harvey Morris at the UN and Daniel Dombey and Alan Beattie in Washington Accessed on: 03/07/2011

[8] Website: The Guardian Article: Obama team accuses China of manipulating its currency Author: Graeme Wearden Accessed on: 03/07/2011

[9] Website: The New York TImes Article: With Warning, Obama Presses China on Currency Author: DAVID E. SANGER Accessed on: 03/07/2011

[10] Website: BBC Article: Obama welcomes China's move towards flexible yuan Author: NA Accessed on: 03/07/2011

[11] Website: ABC News Article: Obama Administration Does Not Brand China As Currency Manipulator Author: Matthew Jaffe Accessed on: 03/07/2011

[12] Website: Treasury Department Article: Semiannual Report on International Economic and Exchange Rate Policies Author: Treasury Department Accessed on: 03/07/2011

[13] Website: Fox News Article: Obama Uses Tough Language On Chinese Currency Author: Eve Zibel Accessed on: 03/07/2011

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