Thriving US companies ignore China trade surplus issue
By Richard McGregor
Published: August 7 2003 5:00 | Last Updated: August 7 2003 5:00
Seven years after the US forced Japan to revalue the yen in the landmark 1985 Plaza Accord to correct the large bilateral trade imbalance, Robert Stempel, then chairman of General Motors, travelled to Tokyo with a set of new demands.
Mr Stempel, part of a delegation of top US carmakers, dismissed suggestions that he wanted handouts from Japan, saying he was only asking for fair play, open markets and an even stronger yen to allow GM to compete in a country where it had few sales.
Fast forward to 2003 and political pressure is mounting in the US for a campaign against another Asian giant, China, to force a revaluation of its currency, also to rectify a trans-Pacific trade imbalance.
But at GM's joint venture in China, there are no complaints, only a frantic effort to produce enough cars to meet roaring demand in the mainland market.
"Obviously drivers just like GM products - other [brands] are only selling because we're out of capacity," joked Phil Murtaugh, chairman of GM in China. GM, which doubled its car sales in China last year and has recorded double-digit increases so far in 2003, is one of many US companies that have invested heavily, and profitably, in the mainland.
China has a large and growing trade surplus with the US, of about $100bn (€88bn, £62bn) last year, according to US figures, through large sales of clothes, textiles, toys and, increasingly, electrical goods.
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