Analysis: Growing fear of China boom

TOKYO, May 24 (UPI) -- China is seen by an overwhelming majority of Americans as the single biggest threat to the U.S. economy. But instead of being consumed with fear about growing competition from the Asian giant, many acknowledge that Americans themselves may be to blame for being overly eager to buy up cheap Chinese goods.

The UPI/Zogby poll of more than 5,000 Americans, weighted to make it representative of the country as a whole, found that 75 percent of those polled regard China as the chief economic rival of the United States. Neighboring Japan, meanwhile, came in at second place but trailed behind with only 14 percent of the vote. As for India, despite much ballyhoo about the subcontinent's roaring growth rate in recent years, fewer than 1 percent of respondents regarded India as a competitor to the United States.

The poll, which has a margin of error of 1.4 percentage points, was carried out May 16-18 and had 5.141 U.S. residents as respondents.

Growing concerns about the China threat are not unwarranted when trade flows between the two countries are examined. Last year, the U.S. trade deficit with China reached a record $232.5 billion, or about one-third of the total U.S. deficit of $765.3 billion, and up from $201.5 billion in 2005.

Moreover, with the Chinese authorities holding approximately $321 billion in the U.S. government's publicly held debt, 27 percent of respondents said that they were highly concerned about current circumstances. At the same time, nearly 62 percent of those surveyed said that they believe China's growth has hurt the U.S. job market, with 79 percent finding that the manufacturing sector has been particularly hard hit by the onslaught of Chinese products.

Growing fears about Chinese goods flooding U.S. markets have been a source of political tension between the two countries, and the key issue in talks with Chinese Vice Premier Wu Yi, who led a delegation for two days of so-called strategic economic dialogue in Washington this week. China too sees U.S. relations as critical, as Wu led 16 ministers, or nearly half of the Chinese Cabinet, to Washington for the talks with senior Bush administration officials.

But while Wu warned against U.S. protectionist measures in order to reverse the trade flow, American manufacturers have been calling for the Bush administration to step in and protect domestic companies.

"Despite strong efforts from the administration on a variety of issues, the U.S.-China trade deficit continues to widen," said Michael Campbell, head of the National Association of Manufacturers' task force on China trade relations. He added that while China has benefited in particular from deliberately keeping the value of its currency low, which makes Chinese exports cheaper and thus more attractive in international markets, U.S. policymakers should "legislate our own taxes to begin leveling the playing field."

Of the 5,141 adults interviewed online for the poll, nearly 61 percent of respondents agreed with the statement that "U.S. consumers inevitably hurt themselves in the long term by purchasing Chinese-manufactured goods and services." On the other hand, only about one-fifth of those polled said that U.S. consumers benefit from purchasing Chinese products.

Interestingly enough, though, nearly three-quarters of respondents said that they shop from time to time at discount retail giant Wal-Mart, which has been singled out by many industry analysts for increasing U.S. consumers' appetite for cheap Chinese products that are sold at their stores nationwide, and making it more difficult for U.S. manufacturers to compete with their Chinese rivals. In fact, nearly 15 percent of those polled by Zogby said they shop weekly at the retailer, while more than 26 percent go to a local Wal-Mart several times a month.

More than 27 percent said they strongly agree that the United States should take steps to impose restrictions on the quantity of imported Chinese goods, while nearly 35 percent said they somewhat agreed with that statement.

While U.S. consumers are partly to blame for the flood of Chinese goods into the country, many lawmakers are pressing for the White House to take direct, punitive action against the world's seventh-largest economy. That may be a popular political move, as nearly 54 percent of those surveyed stated they view Chinese people "somewhat unfavorably."

In his opening remarks to the visiting Chinese delegation Tuesday, U.S. Treasury Secretary Henry Paulson acknowledged that "there is a growing skepticism in each country about the others' intentions. Unfortunately, in America this is manifesting itself as anti-Chinese sentiment," he said, but he added that "the United States is supportive of a stable and prosperous China. We are not afraid of the competition."