August 05, 2011

Manchin: Invest in America, Stop Spending Hundreds of Millions in U.S. Taxpayer Dollars for Development in China

More than $275 million has been spent to improve Internet access, public transportation in China since 2001

Washington, D.C. – Emphasizing that this nation’s efforts should be focused on rebuilding America, U.S. Senator Joe Manchin (D-W.Va.) today joined a bipartisan group of his Senate colleagues in a commonsense call to end U.S. development aid to China, which is now the world’s second-largest economy. Since 2001, the U.S. has provided more than $275 million in direct assistance to China for projects such as expanding internet access and improving public transportation. In addition, China receives billions from multilateral institutions like the United Nations, to which the United States is among the largest contributors.  

“At a time of tight budgets, painful spending cuts, and overwhelming concern about how we spend money in this country, it doesn’t make any sense that America would send any hard-earned taxpayer dollars to China, the whose economy is growing by leaps and bounds and who has consistently made it very difficult for this country to compete on a fair playing field,” Senator Manchin said. “Now is the time to focus on rebuilding America, and to ensure that we invest in American infrastructure and innovation ahead of other countries.” 

China currently owns $1.2 trillion of U.S. Treasury debt, and has launched its own multi-billion dollar foreign assistance program to rival the United States. This year, both the United Kingdom and Australia announced they will no longer provide direct assistance to China.  

Also this week, Senator Manchin signed a letter urging the Department of Commerce to strengthen enforcement of existing U.S. laws intended to combat illegal import practices such as dumping – when a country like China sells goods for far less than they are worth in another country. The delay in implementation of these rules has hurt manufacturing companies and their workers.  

The text of both letters is below. 

Letter on Direct Assistance to China 

Dear Senator Inouye and Senator Cochran: 

As you consider Fiscal Year 2012 appropriations bills, we are writing to urge the committee to re-evaluate the level of direct foreign assistance the United States provides to China.   Even as China has grown to become the world’s second-largest economy, since 2001 the United States has provided more than $275 million in development assistance to China.  In 2009, the most recent year for which data is available, U.S. agencies from across the government provided more than $65 million in grants to China.  China also continues to benefit from billions of dollars in development programs and infrastructure loans provided through multilateral institutions like the United Nations, the Asian Development Bank, and the World Bank to which the United States is among the largest financial contributors.   

We continue to believe foreign aid is a critical tool to promote both our foreign policy and our values, but given current fiscal realities at home, we need to be smarter and more strategic in allocating our resources.  Several of our allies and partners have come to the same conclusion this year, with both the United Kingdom and Australia announcing that they will no longer provide direct foreign assistance to China.    In view of China’s economic rise, it is clear that, with the exception of programs targeted specifically to Tibet or promote respect for human rights and democracy in China, the annual assistance we are currently providing to China could be better utilized in countries with greater need and vastly smaller resources. 

Indeed, in recent years China has launched its own multi-billion dollar foreign assistance program to rival our own, prompting Secretary Clinton to testify before Congress in March of this year that, “we are in a direct competition for influence with China.”  In spite of this, the administration continues to seek millions in aid for U.S. assistance programs in China, including:  

  • $7 million for HIV/AIDS prevention in China, more than for Thailand, Laos, and Burma combined.  These funds are in addition to the $940 million China already has received from the Global Fund to Fight Aids, Tuberculosis, and Malaria.  
  • $4.7 million for  a Peace Corps volunteer program in China that is restricted by the  Chinese government to teaching English to university students.  Funding for this program has more than tripled since 2001 and now exceeds programs in countries of demonstrably greater need, such as Cambodia, Rwanda, and Sierra Leone.     
  • Continued access to Trade & Development Agency grants for projects ranging from improving broadband access in China’s rural areas, to expanding the Guangzhou metro rail systems, to training Chinese government officials in anti-monopoly law.  While the Trade & Development Agency plays an important role in linking U.S. business to export opportunities abroad, with bilateral trade in excess of $459 billion last year, this program could be better directed to identifying new markets in emerging economies for U.S. businesses.    

With more than $3 trillion in foreign exchange reserves and a double digit economic growth rate, China certainly has the financial resources to forego assistance from multilateral development organizations, which crowds out investment in higher-need countries, and to care for its citizens without relying on U.S. assistance.  As the committee reviews current appropriations bills, we would request that in FY2012 you end all U.S. aid to China, other than programs that assist the people of Tibet or promote respect for human rights and democracy in China, and direct our representatives at international organizations to work to end multilateral aid to China, including by directing those representatives to oppose all such aid.  Thank you for your consideration of this request.    

Letter to Under Secretary of Commerce for International Trade 

The Honorable Francisco J. Sánchez
Under Secretary of Commerce for International Trade
1401 Constitution Avenue, NW 
Washington, DC  20230  

Dear Mr. Under Secretary: 

The Commerce Department announced last August proposed measures to strengthen the enforcement of U.S. trade laws − focused in particular on illegal import practices involving China and other nonmarket economy (“NME”) countries.  One measure the Department proposed is to adjust the U.S. price used to calculate the margin of dumping in NME cases to account for export taxes, just as in cases involving market economy countries.  Failure to make this adjustment understates the margin of dumping calculated, to the detriment of U.S. producers and workers.   

In January, the Department published this proposed change in practice and requested comments.  The comments were submitted in February.  The Steel Manufacturers Association, the Committee to Support U.S. Trade Laws, the United Steel Workers, Globe Metallurgical, and others supported the proposed change.

It has now been nearly a year since the Department first announced its intention to make this important change in practice.  During that time, the Department is continuing to apply a practice that generates distorted and understated dumping margins. Moreover, we understand that the proposed change will apply prospectively.  As a result, as time passes and new investigations and reviews are initiated, more and more cases go forward in which the Department continues to calculate the margin of dumping without making this essential adjustment. 

The failure to implement this change in a timely manner is hurting U.S. manufacturing companies and workers in our states at a time when job retention and creation remains challenging to employers.  

For these reasons, we strongly urge you to implement this proposed change in practice without further delay.