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A New Policy for China
March/April 2005 Issue
An Excerpt From "A New Policy for China!" by Forward, a global perspective from MSCI

2005 NAM China Policy
In pursuing the following five objectives, NAM expects that U.S. and international trade law will be administered to effectively level the trade playing field with China.

1. Immediate revaluation of the yuan by up to 40%.

• Press the U.S. Treasury Department to recognize currency manipulation in its semi-annual report to Congress and urge the International Monetary Fund to exercise its surveillance authority over exchange rates and to cite China under Article IV if progress is not made in consultations.
• Encourage the Bush administration to work with the G-7, G-20, Asia-Pacific Economic Cooperation and other international organizations to press the Chinese government to revalue the yuan.

  2. A dramatic acceleration of initiatives to reduce and eliminate Chinese intellectual property rights violations.

• A dramatic acceleration of initiatives to reduce and eliminate Chinese intellectual property rights violations.
  Encourage the Bush administration to press China to put into practice the newly announced interpretation of its anti-counterfeiting laws. Declare China a Priority Foreign Country and consider taking it to the World Trade Organization (WTO) if the out-of-cycle Special 301 Review by the United States Trade Representative in early 2005 does not show sufficient Chinese progress in meeting U.S.-China Joint Commission on Commerce and Trade and WTO commitments.
• Engage other countries to implement a program comparable to the recently announced U.S. STOP program to address Chinese counterfeiting.
  
  3. Retain China's nonmarket economy status (NME) for the full 15-year period negotiated in Permanent Normal Trade Relations (PNTR) unless statutory requirements for market economy status are fully and consistently met.
  
• The U.S. government should set up an industry advisory group on NME status to include NAM.
• Congressional oversight of China's progress in fulfilling its statutory requirements should be established. The U.S. Commerce Department should provide the appropriate Congressional body with an annual report of its progress.
  
  4. Eliminate administrative, regulatory and standards barriers.
  
• Establish a U.S.-China regulatory policy and standards forum to facilitate dialogue on technical trade barriers, promote openness and transparency in regulatory and standards development, and encourage harmonization where possible.
• Press for reforms of China's quality mark system to permit U.S. testing bodies to offer certifications and make the process timelier and less costly to U.S. exporters, particularly small and mid-size companies.
  
  5. Expand U.S. exports to China by 300% by 2008, i.e., to more than $100 billion, particularly of higher value-added manufactured products.
  
• Strengthen and expand export promotion and financing programs, particularly for small and mid-sized manufacturers.
• Double the U.S. Commerce Department China-specific trade promotion budget for fiscal year 2006.
• Redeploy the U.S. Commerce Department's commercial service resources and personnel to focus on the China market.
• Assist the U.S. Commerce Department in tailoring export promotion programs to the needs of manufacturing sectors.
• Conclude by June 2005 an analysis comparing export performance by country and manufacturing sector to better gauge China trade opportunities and challenges, and techniques of the European Union, Japan and other competitors in their export promotion programs to China to emulate global best practices.
• Eliminate artificially created and maintained competitive advantages through WTO-inconsistent subsidization or other means.
• The Bush administration should endorse, as a priority in the first session of the 109th Congress, legislation that would clarify the intent of Congress to apply countervailing duty provisions to both market and nonmarket economy countries.
• The U.S. Commerce Department's new Unfair Trade Practices Group should undertake and publish an analysis of Chinese subsidization practices.

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