The new 2005 Report to Congress of the U.S. China Economic and Security Review Commission makes crystal clear the unequal trade relationship with China threatens our jobs, our communities, our national security, and our living standards. Yet our nation’s leadership has its head in the sand when it comes to trade with China. In fact, President Bush yesterday said that the U.S. trade imbalance with China is merely “bothersome.”

The new report from the bipartisan commission is blunt in its assessment: “the trends in the U.S.- China relationship have negative implications for the long term economic and security interests of the United States.” The Commission notes that the trade deficit with China rose by 31% in 2004 and is expected to considerably exceed $200 billion in 2005.

The commission cites China’s illegal trade practices -- an undervalued currency, extensive government subsidies, weak intellectual property rights protections, and repressive labor practices -- as crosscutting competitive concerns. Many of these, the report states, “appear to act as a strong inducement for U.S and other foreign firms to invest in and relocate to China to serve the Chinese domestic market and to use China as an export platform.”

Foreign investment, primarily foreign direct investment with American firms leading the way, has underwritten much of China’s economic development. At home, our own tax laws reward companies that shift jobs abroad, while penalizing companies that produce on American soil.

The hard facts are laid out in the Commission’s report. Our nation’s leaders must honor America’s workers and communities and read this report, and change our nation’s direction in regard to our policy on China trade.

Contact Esmeralda Aguilar 202-637-5018