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Manufacturing is still critical to the economy United States. Clyde Prestowitz, says it's time to start realizing the positive spillovers that manufacturing creates... Read more  

Events & Activities

Stephen Olson at Chinese Development Institute Conference


 Clyde Prestowitz giving presentation to CDI...


Steve Olson teaching trade negotiations at the Mekong Institute...


Stephen Olson to speak at upcoming workshop organized by the International Institute for Trade and Development on 

"Economics of GMS Agricultural trade in goods and services towards the world market"

Chiangmai, Thailand Sep 8-12.

(01/14/05) Clyde Prestowitz on Voice of America on China

Clyde Prestowitz on The Voice of America (1/14/05) on China
Voice of America CY Copyright (c) 2005 Federal Information & News Dispatch, Inc.
Mandarine Power

INTRO: China can make everything from furniture to semi-conductors, automobiles, advanced rockets and spacecraft. It now dominates East Asian trade. It has overtaken the United Kingdom as the world's fifth-largest trading power. It is the world's biggest consumer of commodities and is the world's number two draw for private capital, second only to the United States. VOA's Jela de Franceschi takes a closer look at the global implications of the rise of Mandarin economic power.

TEXT: Chinese exports have burst onto world markets with surprising speed and quantity. Even more remarkable is China's ambition to become a key player in global trade.

China has a distinct policy of developing key pillar industries. Recently, the Beijing firm Lenovo acquired IBM's personal computer business. The $1.75 billion acquisition of an American computer industry icon has turned China overnight into the world's third-largest PC maker.

The deal is not the first of its kind, says David Lampton, the Director of the China studies program at the John Hopkins University. The Chinese are trying to build a brand name not only in computers, but are buying auto companies abroad and investing in telecommunications companies.


This is a very broad ranging kind of economic expansion that the Chinese have. On balance, it signals that China is not going to be content just to make products that other world-renowned brand names put their labels on. China is moving toward building its own brands and controlling the production process and the marketing process globally.


Driven by its voracious thirst for resources, China's booming economy is impacting world energy and raw material markets.

In November Beijing signed a natural gas agreement with Teheran worth $100 billion. What some call the deal of the century includes a large Chinese investment in Iranian gas production. China has similar arrangements with oil-producing Sudan and Venezuela.

In Latin America, China struck a $20 billion dollar long-term deal for imports of mineral and agricultural commodities from several countries, including Cuba.

China is also the driving force behind a new trade agreement among the 10-member Association of Southeast Asian Nations, ASEAN. This could give access to duty-free goods to half the world's population by the end of the decade. Some analysts believe the new trade accord could dwarf the bargaining might of the European Union and NAFTA, the North America Free Trade Area.

Clyde Prestowitz is president of the Economic Strategy Institute in Washington and a former U-S trade negotiator in the Reagan administration. China is redefining the region, he says, through a combination of economic dynamism and skillful diplomacy.


China is concluding all kinds of big economic deals, cultural exchanges with Australia, with countries around the Pacific Asia Basin and Latin America. The Chinese are pursuing a very active diplomacy, which is redefining the regional and global balance of power. China is becoming a major player not only in the Pacific, but also in Latin America and Africa. What is really interesting about it is that the Chinese are doing it without flexing their muscles.


Still the rise of Mandarin soft power has raised geopolitical concerns. China's search for resources has in some instances troubled the United States.

China's extensive energy arrangements with Iran and Sudan are viewed as a key obstacle to Washington's calls for UN action against Iran's nuclear proliferation and Sudan's human rights violations in Darfur.

But according to Mr. Prestowitz , China is a competitor, not a threat to the United States.


Everybody knows China needs oil. Iran is one of the largest oil producers and one of the countries that have the largest reserves of oil in the world. Japan made a deal with Iran over American objections about six months to a year ago, but nobody criticized Japan as somehow trying to cook up a hostile strategy against the United States. It is not a strategic conflict.


For now, China has a vested interest in global stability and a stake in maintaining the existing world trade regime, acknowledges Mr. Lamport.


China is dependent on a peaceful international system because an increasing fraction of its resources has to come across open seas, pipelines and everything else. For decades to come, China's military is not going to be able to protect the vital resource lines to China. Therefore, the only alternative China is going to find is developing a more cooperative framework and hopefully good relations with the U-S.


The U-S and Chinese economies are increasingly interlocked, say observers, and both risk paying a steep price should their relations turn less than cooperative.

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