The political sparring in the United States comes at a time when China is confronting political challenges of its own as a new leadership prepares to take over. The country’s rapid expansion has cooled, putting the ruling Communist Party at risk of missing economic growth targets — and probably curbing any appetite for the sort of reforms demanded by Washington.
Although China has been encouraged to rely more on its domestic consumer spending for growth, exports remain central to the country’s economic strategy, and they have been hit by the economic crisis in Europe and the ebbing world recovery. The country also is mired in a territorial dispute with Japan that has disrupted factories, retailers and tourism in the face of public protests.
China’s auto parts exports have risen tenfold in the past decade, to around $70 billion annually, according to U.S. officials. The country is now the fourth largest foreign supplier to the U.S. auto industry, providing around $10 billion in parts each year.
That is far behind Mexico, where a vibrant auto industry exports around $28 billion annually to the United States under the terms of the North American Free Trade Agreement. Nonetheless, a senior U.S. official said that China’s subsidies were “flooding the world with cheap auto parts” and threatening to further disrupt a beleaguered U.S. auto parts industry.
The Chinese Embassy in Washington did not respond to requests for comment. China often responds to WTO and other trade complaints with government statements issued a day or more after actions are filed.
Obama used a campaign stop in the heavy-industry battleground of Ohio to press his case that his administration, through the auto company bailouts and other steps, was trying to boost U.S. manufacturing, and he criticized Romney for outsourcing jobs through deals at his former private equity firm.
“You can’t stand up to China when all you’ve done is send them our jobs,” the president said. “When the playing field is level, America will always win. . . . We don’t need folks who, during election time, suddenly are worrying about trade practices, but before the election are taking advantage of unfair trade practices.”
Romney characterized the latest WTO case as an election-season tactic. His campaign has begun a new television ad focusing on China’s manufacturing rise, and he has said that if elected he would deal more forcefully with issues like China valuing its currency to aid its exporters.