On April 11, 2018, the Senate Committee on Finance held a hearing regarding the challenges that U.S. businesses, manufacturers and service providers face when trying to access the Chinese market. Links to the witnesses’ written testimony are provided below. Before the committee, these industry witnesses consistently indicated that a long-term strategy – with clear objectives and a timeline – was needed to address China’s trade practices. Perhaps, most poignantly, Dean Garfield, president and CEO of the Information Technology Industry Council, stated, “The U.S.-China relationship is as complex as it is important. The relationship has always been – and likely will continue to be – one of both competition and cooperation. We need to approach managing difficulties in the bilateral trade relationship with the nuance and deliberation they deserve, recognizing that both action and inaction will have consequences for years to come, in positive and negative respects.” He later added that the United States, regardless of China’s practices, must rebalance its approach to strengthening the U.S. economy because, “Regardless of whether China plays by the rules or not, it will continue to develop significant capacity for technological development, innovation, and growth. The United States must be prepared to compete.”

Christine Bliss, president of the Coalition of Services Industries, highlighted in her testimony significant market barriers in the services industry, including China’s treatment of data and technology, its restrictive measures in the insurance and securities markets, and its barriers in the banking and securities industries. She said that despite these barriers, China “represents a significant opportunity for U.S. services firms” given the size of its market. Linda Dempsey, vice president of International Economic Affairs of the National Association of Manufacturers, added that “there are few places in the world where [U.S.] manufacturers sell more or have increased sales” outside of our NAFTA partners … but “there are few places in the world where trade has proven more challenging for American manufacturing.” These challenges must be addressed, she stated, and “China simply must follow the same rules as everyone else.” While targeted actions, such as tariffs, can provide short-term relief, Dempsey argued that the United States should “be pursuing a truly modern, innovative and comprehensive bilateral trade agreement with China that wholly restructures our economic relationship.” Thea Lee, president of the Economic Policy Institute, added that China’s practices remain inconsistent with international rules and norms, “not just WTO rules on prohibited subsidies and dumping, but also international conventions on workers’ rights, public health, human rights, environmental protections, intellectual property rights, and consumer safety.” She concurred with the other witnesses that China is strategically playing a “long game, while the U.S. is egregiously shortsighted. Our trade policies in the past have been so inadequate in scale and slow in implementation that by the time we take action, it is often a decade too late, with the result that our trade actions are ineffective, if not counterproductive.”

Overall, while clearly criticizing the Chinese government for its trade policies, practices and continuing barriers, the witnesses were at times equally critical of the U.S. government’s approach to China and its own failure to develop and implement long-term economic and infrastructure development strategies.

Witnesses’ Statements:

  • Dean C. Garfield, President and CEO, Information Technology Industry Council
  • Christine Bliss, President, Coalition of Services Industries
  • Linda Dempsey, Vice President, International Economic Affairs, National Association of Manufacturers
  • Thea M. Lee, President, Economic Policy Institute