Labor leaders, some members of Congress and other groups in the United States still worry about the loss of jobs to China and argue that the country’s currency and other strategies to boost exports continue to give it an unfair advantage. Ebbing Chinese growth has meant a slower rise in U.S. exports to the country. Coming at a time when the U.S. economy seems to be firming and imports are on the rise, that produced a record trade deficit with China of $440 billion last year.
…investment by U.S. companies into China has slowed, while Chinese companies — looking for technology, growth and other opportunities that have become harder to find at home — are increasingly going overseas, sometimes with controversial results. The Senate Agriculture Committee is scheduled on Wednesday to hold a public hearing about the proposed takeover of Smithfield Foods, the world’s largest pork producer, by a Chinese company trying to lock in supply for an increasingly meat-hungry nation and gain access to U.S. technology.
Changes in U.S. monetary policy and the potential for rising interest rates may divert even more capital from China, said Cornell University economist and China expert Eswar S. Prasad. The dropping cost structure for energy in the United States, meanwhile, coupled with the steady rise in China’s labor bill, has the potential to further change international investment patterns. China, Prasad said, will likely press U.S. officials for a better understanding of those trends.
Overall, U.S. officials say they expect the economic pressures being felt inside China to push the country toward some of the decisions that the United States and other Chinese trading partners have long advocated: cutting subsidies to state-owned businesses, allowing freer movement of investment capital into and out of the country, and deregulating a financial sector dominated by state-owned banks and state-dictated interest rates.