While the world struggles financially, many eyes grimace at the great factory of the world – China. The Chinese Premier will visit the European headquarters on Friday to discuss a variety of areas of necessary cooperation. In the meanwhile, the Obama Administration has gotten off to a rocky start with China by accusing it of manipulating the value of its currency.
The vast majority of the items we buy off the shelf these days have a little "Made In China" sticker on them. The entire world is straining from of the economic downturn, and many nations are feeling the pinch of massive trade deficits with China. China benefits from the trade surplus, but it still has an interest in helping ease the world's economic difficulties. China suffers too if the consumers of the world are less able to purchase its products.
The meetings this week will be good for China. At their meeting, European Commission President Jose Manuel Barroso and Chinese Premier Wen Jiabao will sign nine accords in which the EU will agree to give China the equivalent of $79 million for cooperation in student exchanges, in fighting pirated goods and illegal drugs, and in protecting European companies with plants in China from copyright violations.
The balance of trade has clearly been in China's favor for years, and both the US and EU want to address the problem. Aside from housing 1.3 billion people who are willing to work for pennies, China has been accused of undervaluing its currency. Barroso will urge Wen to increase the value of the yuan because its low value gives Chinese exporters an unfair advantage. In the first 10 months of 2008, the EU's trade deficit with China reached euro138.8 billion ($183 billion).
In 2007, the US trade deficit with China hit a record $256.3 billion, and the Obama Administration recently accused China of manipulating the value of the yuan. China reacted strongly against this criticism on Saturday. "China wants a good start with Obama, but trade conflicts are the one issue most likely to hurt this," said Shi Yinhong, an expert on ties between the two nations at Renmin University in Beijing. "Now our diplomacy is conditioned by the financial crisis." (A number of people in the US and EU governments believe the yuan is undervalued.)
Economic problems are not the only thing being discussed in Europe this week. Barroso intends to speak to Wen about China's list of human rights violations.
Amnesty International made a statement on Tuesday, in which it encouraged the new US administration to make China's human rights violations a priority, especially the tendency of Communist governments to imprison political dissidents in forced labor camps. "Urge Chinese authorities to abolish the 'Re-education through Labor' system, under which approximately 250,000 to 500,000 people are imprisoned without charge or trial," the human rights organization exhorted.
China still controls its media and openly censors the information its citizens receive from the outside world. China cut out portions of President Obama's inauguration speech before it reached the Chinese people. The rights of workers is also of great concern. International Herald Tribune recently made a case for the miserable state of the migrant workers in China. Not only are these laborers made to work in dangerous conditions, but their employers are not required to pay them monthly. Significant numbers of migrant workers are paid annually at the time of the Chinese New Year. If their employers decide not to pay them after all, there is little these workers can do about it. In the interest of making sure that business goes on as usual, the Chinese government has done little to help these people. So much for the Communist dream.
China continues to be a force to be reckoned with, especially as China feels the strain of a suffering world economy.
