The sixth annual U.S.-China Strategic and Economic Dialogue (S&ED) starts tomorrow in Beijing. This is like a “summit” meeting between the two countries, with high-level discussions of issues ranging from North Korea and wider regional security problems, to climate change to cyber-hacking to maritime claims to market restrictions and currency.
The S&ED meetings have been going on since 2009, with the location alternating between the US and China. The S&ED combines two separate high-level discussions; the China-U.S. Strategic Dialogue, and China-U.S. Strategic Economic Dialogue that were started under the previous Bush administration and had six meetings.
This year Secretary of State John Kerry and Treasury Secretary Jacob Lew travel to China to represent the United States, while Chinese State Councilor Yang Jiechi and Vice Premier Wang Yang will represent China.
China’s currency manipulation will be a topic of discussion. Treasury Secretary Lew said last week that China currency remains “undervalued,” and is expected to “press” China to do something about it. But the Treasury Department continues to refuse to formally name China as a currency manipulator, which would initiate the process for doing something about it.
A recent study by the Economic Policy Institute (EPI) showed that China’s currency manipulation costs between 2.3 and 5.8 million US jobs, increases the trade deficit by as much as $500 billion, and cuts U.S. GDP by up to $720 billion per year.
(See also: What Is Currency Manipulation.)
Huge Hong Kong Demonstration While US Companies Take Out Ads Opposing Democracy
Richard Bush at Brookings writes that, “Neither Taiwan nor Hong Kong will likely be on the formal agenda for the S&ED, but they will hang like rather dark clouds over the proceedings.”
Brooks is referring to the Hong Kong democracy movement. A week ago, there were very large demonstrations in Hong Kong. Half a million people showed up during a tropical storm, demanding that China open up to more democracy and allow them to choose their own leaders.
American companies took out full-page advertisements in Hong Kong newspapers opposing the democracy movement in China. The ads said, “We are worried that foreign multinationals and investors will leave their Hong Kong headquarters because of this, or even withdraw their business, and shake Hong Kong’s place as an international business centre over the long term.”
Harold Meyerson wrote about this in the Washington Post, in a column titled, “When dollars trump democracy in China”: “For years, American businesses argued that bringing capitalism to China would transform that nation into a democracy. In fact, it seems to have had the opposite effect: U.S. and other Western companies doing business in China have become defenders of authoritarianism.”
Meyerson warned, “The firms’ egregious conduct in Hong Kong makes painfully clear their willingness to dump democracy the moment they think it may threaten their bottom line.”
This echoes complaints that the corporate-dominated trade-negotiating process has veered in the direction of bypassing US democracy and sovereignty in favor of boosting the profits of the giant multinationals that dominate the process.