U.S.-China Economic & Security Review Commission
Field Investigation on
“China’s Impact on the U.S. Manufacturing Base”
Columbia, South Carolina
Good morning, it is a pleasure to be here in Columbia.
Today our Commission will hold its first field investigation outside of Washington DC. I believe this method of first-hand investigation of U.S.-China economic and security issues will become a permanent and significant part of our Commission’s work, and we are very glad to be kicking off this new process in South Carolina.
The goal of today’s investigation is to hear practical first-hand perspectives on how U.S.-China trade is impacting the industrial base of South Carolina. U.S. manufacturers, labor unions, economists and others have increasingly identified China’s manufacturing competition as a critical factor in the erosion of U.S. manufacturing capacity. Our mandate from the Congress calls for, among other subjects, a comprehensive assessment of how U.S.-China trade is impacting the U.S. economy and the implications for our national security interests. The fallout of our trade relationship on the U.S. manufacturing base certainly falls squarely within this mission.
We are honored to be joined today by both of the distinguished U.S. Senators from South Carolina, Senator Hollings (D-SC) and Senator Graham (R-SC), demonstrating the bipartisan concern in the Congress over the issues we are discussing. We thank both Senators for the help their offices provided in putting together today’s event and commend them for their strong leadership on manufacturing base issues. Senator Graham addressed the Commission at our hearing in September and made clear his deep concern over the devastating losses being sustained by South Carolina manufacturers and his conviction that imbalanced U.S.-China trade was a contributing factor. Senator Hollings similarly voiced such concerns in an October 28, 2003 letter to President Bush, signed as well by Senator Graham, which urged the President to “address the enormous threat from China confronting the U.S. textile and apparel industries and their nearly 800,000 workers nationwide.”
Today’s event builds on the Commission’s September 25 hearing on “China’s Industrial, Investment and Exchange Rate Policies: Impact on the U.S.” where we examined China’s currency policies, its foreign investment incentives, and its strategies for industrial development, all of which factor into China’s rapid manufacturing development. Following this hearing, we forwarded to Congress several key findings on these issues, including our conclusion that China has been deliberately manipulating its currency to maintain a favorable exchange rate against the U.S. Dollar. Specific to today’s discussion, we concluded that: “the inappropriate exchange rate between the Chinese yuan and the dollar is negatively impacting the competitiveness of U.S. manufactured goods and is contributing to a migration of world manufacturing capacity to China and an erosion of the U.S. manufacturing base.”
The September hearing was effective in unearthing some of the larger issues and concerns of U.S. workers and manufacturers. Today’s field investigation is an effort to examine the real, “on-the-ground” impacts of increased Chinese imports and off-shore transfers by U.S. firms, particularly on workers and working communities. Today we will be exploring these and other important questions with representatives of industry, workers, communities and concerned members of the public.
As I mentioned, we are honored to be joined by both Senator Hollings and Senator Graham. I look forward to hearing their perspectives, as well as those of all the distinguished panelists we have assembled today.
Now I would like to turn over the proceedings to my co-chair for today’s event, my colleague Commissioner George Becker, for his opening remarks.