This USA Today article details U.S. Treasury Secretary Jack Lew’s two day talks with newly establish Chinese officials and leaders. Among the issues discussed were China’s huge trade surplus with the U.S., the state’s manipulation of the Yuan, the counterfeiting of U.S. goods, and market barriers for U.S. companies in China. The treasury department claimed that Lew would confront the issue of Chinese hacking following the U.S. National Security Advisor’s call for Beijing to crack down on the perpetual hacking of U.S. businesses.
The talks occurred after a six-month long hiatus of U.S. high-level government visits to China resulting from the transition of leadership in China’s communist party. In addition to Lew’s visit, U.S. Secretary of State John Kerry and chairman of the Joint Chief of Staff Gen. Martin Dempsey are likely to visit the country next month. Prior to Lew’s visit, newly appointed Chinese president Xi Jinping claimed he was “ready to work with the U.S. side to continue to develop this China-U.S. cooperative partnership.” Despite the promise of these and subsequent U.S.-China political discussions, researcher Zha Xiaogung revealed that while both sides will tone down disputes in public, they will each stick to the bottom line behind closed doors.
As per class, pegging exchange rates is something many countries do – Germany vs Greece and Spain via the Euro. Of course you can also refer to the BIS chart at the top of the home page for evidence that whatever China may do relative to the dollar, the RMB has appreciated against trading partners and (I’ll put the ppt used in class up at some point) China’s aggregate trade surplus is down sharply. So maybe it’s the US end that has problems? Rebalancing needs to incorporate our end, and not just China’s.
Chinese hacking of US businesses has been a problem in contemporary times. Too often have US companies had their designs stolen, counterfeited, and other similar cases. Hackers end up exploiting companies that are vulnerable and as a result, these companies face even larger threats to business and future endeavors. Counter-hacking needs to be more heavily funded in the United States, so countries such as China with large amounts of hacking are hampered and become less of a safe haven for activities such as these.