Author: By Philip Thornton, Economics Correspondent
The United States has lost almost 1.5 million jobs since 1989 because of increased trade with China, the US Congress was told yesterday.
The Economic Policy Institute estimated that imports from China displaced 1.66 million jobs between 1989 and 2003, while exports to that country generated only 199,000 additional US jobs.
The study was published as China said it posted its biggest trade surplus in nine years in December thanks to another bumper month for exports. The EPI said traditional industries such as textiles, apparel, furniture, rubber and leather had borne the brunt of the job losses. Computer, electronic, and semi-conductor sectors had also seen China-related losses.
The EPI put a large portion of the blame for the growing trade deficit with China on that country’s “refusal” to revalue its exchange rate peg with the dollar. The report was prepared for the US-China Economic and Security Review Commission, a Congress-appointed panel that has pushed for a tough US approach to China on trade.
US manufacturing and labour groups claim Beijing’s decade-old practice of pegging its currency at 8.28 to the dollar gives Chinese companies an unfair advantage by artificially depressing the price of their goods.
The US’s overall trade deficit with China was $124bn in 2003, and is expected to rise to about $150bn for 2004. China’s trade surplus for December hit $11.1bn in the month, the biggest surplus since 1995.
The EPI report will fuel calls on the White House to speed up its efforts to persuade Beijing to abandon or revalue the currency peg. The administration has made public and diplomatic overtures to China for almost two years. China has said that it needs time to implement reforms in its banking sector to ensure it copes with any relaxation of capital controls that would accompany currency reform.
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