2005年NPR美国国家公共电台四月-China and the Dollar

Today we are gonna wrap up our series on the falling US dollar. It has lost about thirty percent of its value over the last few years, and that has many economists 2 and politicians worried as we've heard over the last couple of days. The dollar's fall also has repercussions 3 for US relations around the world. NPR's Mike Shuster reports on the challenges it presents for the relationship with one of the America's largest trading partners, China.

The weakness in the dollar, say economists, should stimulate 4 US exports by making them cheaper. It should make imports more expensive thereby 5 helping 6 to adjust the record trade deficits 8 that US is experiencing. But this is not happening with China. China acts in the international currency markets to make sure its currency does not grow stronger against the dollar. It does that by using its vast reserve of dollars to buy US treasury 9 securities. That helps the US finance its enormous budget deficit 7. But there are broader concerns beyond the purely 10 economic about this involving relationship with China says Curd 11 Cambo, an expert on Asia at the Center for Strategic & International Studies in Washington.

"In many respects, China, even more than Japan, is actually paying for some of our extravagances, that we are undertaking 12 such as the war in Iraq."

Many factors have generated the US budget deficit now at more than four hundred billion dollars annually 13. Certainly the Bush tax cuts were the most important factor. But the increased costs associated with the 911 attacks, the war in Afghanistan, the war against terrorism, the costs of homeland security and the war in Iraq now make up a large part of the deficit. Philip Swagle, the former chief of staff of the Council of Economic advisors 14 argues that there's no direct relationship between these national security costs and the investment coming from China.

"I don't think you can earmark the moneys in that way. it's not that you know China, the money that we are getting from China is, you know this check is paying for this weapon of Pentagon."

But K. argues there is an inherent relationship between the two that he views as potentially very troublesome.

"Whether the United States should be putting major national security endeavors like the war on Iraq and in Afghanistan and the larger war in terrorism on the national credit card, in the final analysis that does not make good sense. It is not a conservative and smart way to undertake economic or national security policy."

For the moment and probably for the near term, most economists say, China will continue to invest in US Treasury Securities as it has been doing, even if the value of the dollar continues to slide which many economists believe will occur. The slide in the dollar's value has hurt and will hurt China's investments in the US. But China will tolerate those losses says Richard Haass, a former senior official in the State Department during the first Bush administration,because other economic factors are more important to China right now, such as the production stimulated 15 by exports to the US.

"The Chinese leadership has made a political decision that what matters more than the absolute value of their large holdings of dollars is employment. This Chinese leadership can not afford massive unemploy...growth of unemployment. It’s already high enough in China or too high. And as a result, they've been willing to trade some of the value away of the assets they are sitting on in order to avoid the political risk of larger amounts of underemplyment or unemployment."

No one's predicting a crisis in the dollar on the near horizon, but many economists are concerned about whether this arrangement can remain stable several years out. Gil Foslar, chief economist 1 for the conference board in New York, worries that in a few years the Chinese may change their economic priorities with important repercussions for the US.

"Are they willing to in some ways invest in maintaining that strength by holding our securities? I think, I think absolutely. Do I think we can do this in perpetuity? I think absolutely not."

There are many positive economic benefits for the US in its relationship with China. In addition to the financing of the budget deficit, cheap Chinese products are good for American consumers. They also force American producers to be price competitive helping to keep inflation in check. Yet many members of Congress, especially on the conservative side, often have nothing but harsh things to say about China, about its rising military power, its potential challenge to the US and Asia, and even about trade. China-bashing has not gone out of style. This relationship is highly nuanced, says C.C, and potentially very destabilizing.

"What the United States has never been particularly good at is dealing 16 with a country that has healthy doses of both areas of cooperation and competition and that is our destiny with China in a decade years and decades ahead."

Finding its way through the trade imbalance, the dollar weakness, the budget imbalance and its new relationship with China is one of the greatest challenges for the second Bush administration.

Mike Shuster, NPR news.