* Chinese trade policies cost U.S. 2.4 million jobs-report
* Undervalued currency, subsidies cited
* Exports to China hold firm in slow 2009
(Adds U.S.-China Business Council on exports)
By Doug Palmer
WASHINGTON, March 23 Unfair Chinese trade and
currency practices caused the loss of as many as 2.4 million
U.S. jobs between 2001 and 2008, according to a study released
The report by the left-leaning Economic Policy Institute
said China's "currency manipulation" was a major cause of the
United States' trade deficit with China, though it said other
Chinese practices contributed to the deficit.
The report comes ahead of an April 15 semi-annual report by
the Treasury Department in which it must decide again whether
to label China a currency manipulator. U.S. lawmakers in recent
weeks have been pressuring the Obama administration to label
China as such, something that U.S. President Barack Obama, like
his predecessor, George W. Bush, has so far resisted.
The institute's report cited intervention by China in
maintaining its yuan currency as the key problem.
"This intervention makes the yuan artificially cheap and
provides an effective subsidy on Chinese exports," Robert E.
Scott, an EPI economist and author of the report, said in a
"Unless China raises the real value of the yuan by at least
40 percent and eliminates other trade distortions, the U.S.
trade deficit and job losses will continue to grow rapidly,"
The U.S. trade deficit with China grew from $83 billion in
2001 to a record $268 billion in 2008 before falling to $226
million in 2009 alongside a collapse in world trade.
The U.S.-China Business Council, an organization of
American firms doing business with China, said that between
2000 and 2008, U.S. exports to China grew 341 percent.
U.S. exports to China for 2009 stood flat at the 2008 level
of $70 billion, but U.S. exports to other countries fell nearly
20 percent during that year amid the global economic slowdown,
said USCBC President John Frisbie.
"China outperformed in a bad year and it's our third
largest export market and the fastest growing export market by
far," he said.
"Jobs are tied to that and they are high-paying jobs," said
Frisbie. The USBC tracks state-by-state exports to China but
does not tally jobs because it does not believe there is a
credible way to produce such a statistic, he added.
The EPI report said that other Chinese practices, including
"massive" industrial subsidies, lax enforcement of labor and
environmental laws, intellectual property theft and piracy and
market access barriers, have also contributed to the deficit.
The report estimated that 2.4 million U.S. jobs have been
lost or displaced in the United States as a result of the
burgeoning trade deficit since China joined the World Trade
Organization in late 2001.
"Growing trade deficits cost jobs in every state and
congressional district ... including the District of Columbia
and Puerto Rico," the report said.
"The computer, electronic equipment and parts industries
experienced the largest growth in trade deficits with China,
resulting in 628,000 job losses -- 26 percent of all jobs
displaced by trade between 2001 and 2008," the report said.
Last week, 130 members of the U.S. House of Representatives
urged Obama to formally label China a currency manipulator in
the April 15 Treasury Department report on foreign exchange
practices of major U.S. trade partners.
A bipartisan group of senators also introduced legislation
last week threatening China with U.S. duties on its exports to
prod Beijing on the currency front.
The lawmakers believe China deliberately undervalues it
currency by up to 40 percent, giving Chinese competitors an
unfair price advantage that has led to U.S. job losses.
China has denied it is manipulating its currency and warned
it will retaliate if its goods are hit with duties in the spat.
(Additional reporting by Paul Eckert; Editing by Chizu