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April 12th, 2010
11:00 AM ET

China Rising: Assessing China's impact on America

Editor's Note: Before the turn of the century, it was considered a "no brainer" for U.S. businesses: you had to be in China. Fast forward ten years and you have to ask the question, "has China been good or bad for America?" This week in our original series "China Rising," we're assessing China's economic impact on the United States. Tomorrow on American Morning, Christine Romans examines how China has changed American businesses. One look at your dinner table will tell you everything you need to know.

By Christine Romans, CNN

(CNN) – The question nine years after China was admitted to the World Trade Organization and officially welcomed in to the world economy is this: Has China's rise been good or bad for America?

Meet Steve Udden. He is a husband, father of two daughters and a trade statistic.

"I felt like a baseball player that got traded from a team that he loved playing for and loved the fans. I loved my customers; my coworkers were like second family to me," he explains.

His job as a telecoms projects manager went overseas to China when his factory moved there. Classified by the U.S. government as a casualty of foreign trade qualifies him for a stipend and money for retraining. Unemployment benefits and COBRA health insurance help fill the gap.

“We are keeping it level and steady and holding the line and right now we are ok.”

He's the face of the increasingly strained relations between the United States and China.

One think-tank estimates 2.4 million manufacturing jobs were lost between 2001-2008.

With China's explosive rise comes a nation that is now a key player in America's domestic and foreign policy. Take its currency: Anything made in China is cheaper than made in the USA. Why?

“They arbitrarily control the value of their currency and they do not allow it to float, like most other currencies in which supply and demand for the currency set the value of it,” explains Dan Slane of the U.S.-China Economic and Security Review Commission.

That means one dollar is always equal to roughly 6.83 Yuan.

“The manipulation of their currency gives them about a 40% advantage and it puts our exporters at an enormous disadvantage,” says Slane.

The Treasury secretary abruptly postponed releasing a report this week that could have listed China as a currency manipulator, opting for backroom diplomacy and a closed-door meeting in Beijing. This comes just before China's President Hu Jintao comes to Washington for nuclear talks.

“That's good. We're not going to hang him out to dry politically while he's here, which would be disastrous,” says Robert Kapp, a China trade and business consultant.

And then there's this: Pressuring China is tricky. China is America's banker, the world's factory floor. It’s building its military, buying more of the world's natural resources to fuel its growth and it doesn't like Americans telling it what to do.

“The Chinese [are] showing a new assertiveness and aggressiveness that took many Americans by surprise… I think it's partly because they're starting to listen to what we say about this being China's century and then they started to internalize it and say: Well if this is our century, then we should determine what goes on,” says Gordon Chang, author of "The Coming Collapse of China."

Chang: China may need America more than America needs China Video

At the same time, the United States needs China's influence with emerging nuclear threats in North Korea and Iran.

“Thus far, the Chinese and U.S. have clearly not been of one mind. The Chinese have said over and over, oh, we're going to do it diplomatically, let's negotiate and the Americans have gotten more and more impatient and tried to move the world in the direction of difficult sanctions,” says Kapp.

As the temperature rises, the American people wonder: Is China an opportunity or a threat?

“It's going to be both. And the question is, on balance, is it better or is it worse,” says Chang.

It is a question that is unanswered for Steve Udden.

He is still out of work in Foxboro, Massachusetts. His job is now somewhere in China.

His outlook is quintessentially American.

“I'm completely optimistic and believe in the marrow of my bones that I am going to find something that is good for me and my wife and children.

Publicly, the Chinese dismiss the Obama administration’s calls to let its currency rise. Chinese officials insist the United States is using Beijing as a scapegoat for its own economic troubles.

Premier Wen Jiabao, in rare public comments, recently scolded the President Obama and called America's attitude "protectionist." He said the United States has too many of its own problems to interfere in how China chooses to do business.


Filed under: Business • China Rising
soundoff (207 Responses)
  1. ab123

    Not the Dems to blame for this one, nixon first opened the door to china remember.? Most of our jobs were lost over the last 8 years of gop reign. remember?

    April 16, 2010 at 7:36 am |
  2. Jason

    A Chinese worker only expects $150 a month so he can live, but Americans want nice houses and cars. That's why Americans lost jobs. Will you accept a job of $150?

    If you go to China, you can see US brands everywhere, Nike, Coca Cola, KFC, etc. Although most of the products in US are Made In China, how many of them are really owned by China? Which Chinese brand can you name?

    Let's say if you sell an iPod, who gets most of the profit? Of course it's Apple, the US company who make more money than the Chinese worker who assembled this iPod.

    Most of the Chinese people are still poor!

    When you blame China poluting the earth, think about what US and UK did 50 years ago. When Americans have made enough money, got fully developed, enjoyed luxury things, they start pointing fingers to the people who are far behind them.

    Americans should think about how to move forward instead of staying and blaming Japan, China and India.

    April 15, 2010 at 4:15 am |
  3. Chang

    The watershed in history was WWII. America controlled the earth and had the only functioning economy on the planet. That was 65 years ago! If you and your family have not become wealthy enough to control your destiny in the last 65 years in the most prosperous economy in history and are still grovelling for a manufacturing job, you deserve your fate. You are clearly inferior and deserve to be taken over and be forced to compete for jobs overseas and with the invading peasants from south of the border. Corporations know no borders and have no allegiance to any nation. Money is the only thing that matters to them. The window of opportunity for working people to get ahead has passed in this nation. You will be systematically reduced to survival wages to maximize profits. You are naive to think otherwise and it is probably why you are still broke.

    April 13, 2010 at 11:03 am |
  4. bob

    Let's say China agrees to re-evaluate/float RMB. Costs go higher for US corporates. Does it mean the jobs will return to the US? can you imagine those corporate guys declare in their board meetings "Let's make less money".The jobs will go to other developing nations (has already been happening), Vietnam, Indonesia, countries in South America, East Europe, Africa. We have to accept that. ..jobs will never come back again. That is the nature of market economy and capitalism (which means making money, as much as possible... )

    Screwing China over currency value adds no benefits to us at all, in return they will screw us for revenge. it is not a friendly game. Why don't we make "friends with them" . sell them more Boeing airplanes (partly made in China now); and open more Starbucks, and of course , get them buying our debts those left by our beloved Wallstreet boys; China must be loving it !!

    April 13, 2010 at 9:52 am |
  5. RuRus

    It is insane that my garlic says made in China. I am opening a local farmer supplied only store in my community, this will help people eat fresh foods at reasonable prices.

    I am sick of buying Chinese crap and I avoid it at any cost. Their products are inherently unsafe, and do a lot of harm to their consumers.

    I hope more people will understand and boycott the chinese crap being sent here.

    April 13, 2010 at 8:31 am |
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