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Yellen’s China Tour Re-Affirms Failed Status Quo

Posted on Tuesday, July 11, 2023
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by Ben Solis
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26 Comments

AMAC Exclusive – By Ben Solis

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U.S. Treasury Secretary Janet Yellen’s talks with Chinese leaders last week re-affirmed a status quo that has been disastrous for American businesses and workers for decades.

During meetings with new Chinese Vice Premier He Lifeng, Yellen played down the idea that the U.S. was seeking a “decoupling” from China, instead opting for far more conciliatory language. Though more conflict over trade and investment is sure to come, Yellen – and by extension President Joe Biden – came off as eager to appease Beijing, even as China grows more aggressive on the world stage.

In one awkward incident that seemed to capture the ethos of the trip, Yellen bowed multiple times to Lifeng while enthusiastically shaking his hand. Diplomatic protocol experts called the move “embarrassing” for the United States and flagged it as a sign of American weakness.

In all, Yellen’s visit was a reminder that Biden’s policy toward China has been largely to return to the same deference shown by almost every modern American president – with the notable exception of Donald Trump.

Biden’s failure on China is reflected in the numbers. The U.S. trade deficit with China grew by 8.3 percent last year, reaching $382.9 billion. Although the deficit is on pace to be smaller this year, it will nonetheless be far larger than the U.S. trade deficit with any other country.

Moreover, despite reports of economic struggles in China, the country’s economy is still growing at a rapid clip. The Centre for Economics and Business Research, a U.K. think tank, now projects that China will overtake the U.S. as the world’s biggest economy in 2030.

Two big reasons for China’s continued growth are the facts that China still enjoys “most favored nation” trade status with the United States and is categorized as a “developing nation” by the World Trade Organization (WTO) – both things Biden had a direct hand in bringing about and has done nothing to change.

In short, being a “most favored nation” (MFN) means that the country granting that status to another will provide certain trade advantages and privileges that are equal to or better than those given to any other country. These advantages typically include lower tariffs on goods and reduced trade barriers, such as quotas or restrictions, on imports. Currently, all countries except Belarus, Cuba, Russia, and North Korea have MFN status with the U.S.

The U.S. first granted China MFN status under President Jimmy Carter in 1979. However, some U.S. lawmakers began to question this status following the Tiananmen Square massacre and other human rights abuses in the 1980s and 1990s.

It was during one contentious debate over the renewal of China’s MFN status in 1991 that Americans first got a glimpse into the corruption and corporate interests that drove favorable treatment of China. In the middle of one congressional hearing on the MFN renewal bill, a lobbyist who introduced himself as a private citizen and human rights activist, was exposed as a representative of multinational giant Occidental Chemical.

“Is it in [Occidental’s] vested interest what you are doing?” one senator asked. “Yes, sure it is,” the lobbyist replied. “If MFN would have to be removed, my company would certainly lose sales to China.”

Amid heightened awareness over China’s human rights abuses, many American companies also began shipping jobs overseas, with tens of thousands going to China. One senator at the time remarked that U.S. trade policy was a “caricature” of good governance, since U.S. leaders “had an economic plan for every country from Mexico to Malaysia, but shamefully turned their backs on the American people.”

Some conservative leaders warned that continuing to grant China MFN status amounted to little more than a bailout of one of the most dangerous totalitarian regimes in the world.

In 1991, John Cregan, president of a group called the Taxpayers Alliance Against the Bailout of Communism, said that China’s Soviet-style communism could not be reformed, only abandoned. As he explained, the U.S. offering Beijing trade subsidies and other favorable policies only acted as a buoy for the communist regime, prolonging totalitarian rule in China.

Cregan was ultimately proven correct – in large part thanks to the massive outflow of technology and capital to China during the Clinton administration. In one of the most consequential decisions in the history of American trade policy, Congress granted China permanent MFN status on September 19, 2000. Since that time, what would come to be known as “China Trade Shock” has cost the United States more than two million jobs.

Since then, many congressional Republicans have recognized the error and introduced legislation to revoke China’s MFN status – something even some Democrats seem open to. Former President Donald Trump has pledged to sign such legislation if he is elected president next year, a cue other 2024 GOP hopefuls have picked up on as well.

However, incumbent President Joe Biden has remained largely silent on the issue – perhaps altogether unsurprising given that Biden, then a senator from Delaware, was one of the “yes” votes in favor of permanent MFN status for China in 2000.

In the year that followed, Biden, from atop his perch as the senior Democrat on the Senate Foreign Relations Committee, also guided China through the process to full membership in the WTO. With WTO membership in hand, China was quickly granted “developing nation” status – a distinction it still holds despite having the second-largest economy in the world and more than 30 percent more billionaires than the United States.

Developing nation status grants a country special rights designed to accelerate economic growth like higher subsidies and better tariff rates, along with access to low-cost loans. Despite the fact that China is actively trying to undermine U.S. economic leadership and may surpass America in GDP relatively soon, WTO developing nation status means China enjoys the same benefits as some of the poorest countries in the world.

In 2019, President Trump issued a memorandum calling for reforms to how WTO categorizes developing nations, explicitly stating that “China most dramatically illustrates” his point. “The WTO is in desperate need of reform, without which the WTO will be unable to address the needs of workers and businesses or the challenges posed by the modern global economy,” Trump continued.

But Biden quickly abandoned Trump’s reform efforts upon taking office, instead returning to the same failed strategies he had pursued as a senator decades ago. And as Yellen’s recent trip to China made clear, without another change in leadership, it seems unlikely Biden will deviate from his current approach.

Ben Solis is the pen name of an international affairs journalist, historian, and researcher.

 

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Patriot Will
Patriot Will
9 months ago

Yellen is not only very incompetent and dishonest, she also appears to be working for the Communist Chinese instead of the United States of America. Biden and his merry band of miscreants seem to be doing everything they can to destroy the traditions and strengths of a proud and free country. The way that Yellen repeatedly physically bows to the Chinese officials and refuses to speak in a positive American affirming manner is both disgraceful and destructive. She is a major part of the problem, not a part of the solution.

J. Farley
J. Farley
9 months ago

I was born an American, I don’t bow to anyone, we stopped that BS when we kicked old King Georges A$$ in the 18th Century, Joe Biden (I have never called him President) and the bunch of Slime-Balls in his administration make America look weak it makes it look like they are bowing to their superior, (MAYBE THEY ARE).
Joe Biden and Janet Yellen and the rest of the Sleazebags need to go, the sooner the better you have a chose next election to make America a sovereign nation or learn to speak Chinese’s, the chose is yours, make the most of it.
God Save America!

DenvilleSr
DenvilleSr
9 months ago

If we don’t do some uncoupling from China, we jeopardize our health and security. Yellen and the Biden administration seem oblivious to the fact that we get many of our antibiotics and other medicines and pharmaceutical raw materials from China. They don’t seem to realize that dependence upon a Communist nation and dictators puts us in peril. The alternative thought is they know and they don’t care. Maybe Biden wishes he were a dictator. The administration is certainly acting like it is a dictatorship as they try to give away money without Congressional authorization. President Obama seemed to believe that he needed to bow to Dictator Abdullah and Yellen went into a bowing frenzy to the Chinese Vice Premier. What is it with Democrats bowing to foreign power authorities? I wish they would bow a little more to the wishes of Americans.

tim
tim
9 months ago

Biden’s China policy: grovel, plead, bow, to ensure that Hunter still gets his millions.

Donald King
Donald King
9 months ago

Just like Biden, she is already employed by China. So why would we expect her to act any differently.

Robin W Boyd
Robin W Boyd
9 months ago

One of two things must happen between the U.S. and China. Either China will come to control the U.S. if Progressives are able to continue their coup against U.S. Constitutional freedoms, or the U.S. will be forced to engage in war with China, with Russia most likely rejoining forces with China as was the case in Vietnam.

Ann S
Ann S
9 months ago

Well what do you know they just posted this.
Maybe I can remember what I wrote and see if they will post it this time.
I said that I thought Yellen was bowing to an emperor. She kept doing it. I thought maybe I missed the news that China got an emperor. That still would not be a reason to now but I could understand it better.
To me this bowing was confirmation that China is now the most powerful country in the world. Brandon sold America for 10 million dollar maybe more and some diamonds.
Blinken went down there to smooth the path and Yellen closed the deal and sold our businesses to China.
All according to the new world order of the WEF and the elites who rule the global world.

Morbious
Morbious
9 months ago

You can say one good thing about biden, he stays bought. He and his cronies along with ‘free trade’ rinos decided to sell our country to china 30 yrs ago and they havent looked back. Trump is THE ONLY ELECTED OFFICIAL to ever question our china policy. This was the biggest factor in uniting dems and rinos against him. Each rat wanted his chunk of cheese from the ccp and Trump threatened the feeding frenzy.

Liz
Liz
9 months ago

We are looking at a conflict. Hope people are prerared for TROUBLE. China didn’t SEND SPY BALLONS here for NOTHING!!!!!!!!!!!

Ann S
Ann S
9 months ago

I commented on this this am and it was not posted by AMAC.
I guess I hit a nerve.

Joanne 4 justice
Joanne 4 justice
9 months ago

The US is still in control ie. If we decline to trade with China their economy growth will suffer!!!

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