Clinton: US Must Demand Fairness From China

The Secretary of State said it's time to stand up to China as the U.S. puts the economy at the center of its foreign policy.

NEW YORK (AP) -- Secretary of State Hillary Rodham Clinton said Friday it's time for the United States to stand up to China as the U.S. puts the economy at the center of its foreign policy.

She told business leaders at the Economic Club of New York that the U.S. shouldn't continue to allow itself to be taken advantage of by China, which long has been accused by the West of undervaluing its currency to boost exports around the globe.

"They continue to try to game the system to their advantage and our disadvantage," she said. "It is fitting and timely for us to be standing up and saying, 'this is not acceptable.'"

China is the world's second largest economy, and it increasingly isn't shy about showing off its weapons as well as its wealth.

Concerns about the rising power of China and the rest of Asia were clear in Clinton's remarks.

As the U.S. pulls out of Iraq and brings troops back from Afghanistan, it must turn and focus on building the kind of cross-Pacific ties that the U.S. has had with Europe with decades, Clinton said.

She stressed the importance of a level playing field for companies around the world and called out China on a number of issues, including its currency policy, which she labeled "just one unfair practice."

Clinton also took aim at state-owned companies and state control over the nation's growing wealth -- a reference to the ruling Communist Party's tight rein on key assets.

"Now, there is nothing new about countries using economic power to force others to bend to their will," she said. "But today the resources at their disposal are unprecedented."

China last year startled world markets and governments by briefly putting controls on shipments of its rare earth elements, materials essential to high-tech products like cell phones, in a move apparently aimed at Japan during a heated diplomatic dispute. China accounts for 97 percent of world production of the metals.

Clinton referred to the dispute and called the actions "bullying."

"Governments are entering markets directly through their cash reserves, natural resources and businesses they own and control -- and they are shaping these markets not just for profit, but to build and exercise power," Clinton said.

Her speech came just days after the U.S. announced that America's trade deficit with China jumped to $29 billion in August, the highest level ever for a single month.

Clinton said the political brinksmanship in Washington needs to end so the U.S. can focus on its economic standing overseas and ease worries from overseas partners.

"If people don't believe that democracy and free markets deliver, they will be looking elsewhere" for inspiration, she said.

More broadly, the U.S. must approach foreign policy issues with the goal of improving the troubled economy at home and finding solutions to strategic problems elsewhere, Clinton said.

She pointed to the Middle East as one example.

"To succeed, the Arab political awakening must also be an economic awakening," she said.

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