U.S. lawmakers make China a whipping boy

CAROUSEL - US President Barack Obama shakes hands with his Chinese counterpart Hu Jintao before a bilateral meeting in the Oval Office at the White House in Washington, DC, on January 19, 2011. Getty Images/Jewel Samad

WASHINGTON - U.S. lawmakers, divided sharply on most big issues, are finding common ground by attacking a familiar foe: China.

On one end of the Capitol Tuesday, senators were considering legislation to punish China for currency manipulation. On the other, members of the House of Representatives accused the Obama administration of not doing enough to support China's nearby military rival, Taiwan.

Meanwhile, the powerful chairman of the House of Representatives intelligence committee accused China of waging an unprecedented campaign of cyber espionage aimed at stealing some of the most important U.S. industrial secrets.

As China has emerged as the world's second largest economy and military power, it is has become an increasingly familiar target of criticism in Congress on human rights, economic policies or its perceived threat to U.S. national security.

As the U.S. heads into an election year, Republicans and Democrats alike are pressuring the administration to get tougher on Beijing.

In a move that China's Foreign Ministry warned could seriously disturb trade and economic relations with the U.S., the Senate on Monday voted 79-19 to advance legislation that would make it easier to impose trade penalties against China for manipulating the value of its currency.

Lawmakers accuse Beijing of undervaluing the yuan currency against the dollar by up to 40 percent to make Chinese goods cheaper and American exports more expensive, both of which hurt U.S. producers and consumers.

That is an old complaint, but one with growing resonance as lawmakers vie for re-election in November 2012, with America's economic recovery faltering and unemployment stubbornly high.

"Here in the Senate we have heard the message loud and clear," said Senate Majority Leader Harry Reid, a Democrat. "We can't ignore blatant, unfair trade practices that put American workers at a disadvantage."

According to some estimates, forcing China to realign its currency could support 1.6 million American jobs. Others dispute that and say legislation, which lawmakers have been pushing for the past six years, could set off a trade war that would hurt the U.S. economy.

The administration has said it is reviewing the legislation, but it has preferred persuasion over unilateral action against China, the main foreign creditor of the U.S. government. The administration has said its approach has paid dividends as the yuan has appreciated 10 percent adjusted for inflation since June 2010.

It appears to have support on the issue from an unlikely quarter, the pro-business Republican speaker of the House, John Boehner. He said Tuesday it was "pretty dangerous" for Congress to tell another country how to run its monetary policy.

That could make it difficult for the bill to be taken up on the floor of the House, even if the Senate should pass the bill with support from both Democrats and Republicans.

Taiwan also is a touchstone issue for Congress. There is strong bipartisan support for sales of new F-16 warplanes to the self-governing island; that also would benefit the defense industry and could generate thousands of American jobs.

China warns U.S. against $5.8B Taiwan arms deal

Selling the planes also is seen as a test of America's standing in the world, a measure of its ability and willingness to confront a rising China in the Asia-Pacific region where the U.S. military has been the predominant force since World War II.

Lawmakers have criticized the Obama administration for deciding only to refurbish Taiwan's existing fleet of F-16s rather than to sell it new planes. That decision was viewed widely as a tactic to avoid annoying China, which regards Taiwan as part of its territory.

Rep. Ileana Ros-Lehtinen, chairwoman of the House Foreign Affairs Committee on said Tuesday the U.S. appeared timid in the face of China, which she described as "on the march in Asia." That committee's ranking Democrat, Rep. Howard Berman, also said Taiwan still needed the new planes to defend itself.

The administration won few friends in Congress with its protracted and secretive deliberations on the arms sales, before it announced a $5.8 billion package last month.

But as on the currency issue, legislation demanding sales of new F-16s to Taiwan may struggle to win Congressional approval.

While a bill could win passage in the Republican-controlled House, similar legislation already has been blocked in the Democratic-controlled Senate.

In another expression of deep-seated suspicion of Beijing's intentions toward the U.S., Rep. Mike Rogers, Republican chairman of the House intelligence committee, said Chinese efforts to steal U.S. technology via the Internet have reached what he called an "intolerable level."

He said there is little doubt among cyber security specialists that the Chinese government is behind much of what he called cyber "piracy" and urged the United States and its allies to pressure Beijing to stop.

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