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The U.S. Senate may join the House and pass a measure meant to push China to raise the value of its currency, 30 lawmakers said in a letter today to China’s Vice Premier Wang Qishan.
The senators said they want China to allow “its currency to appreciate meaningfully” before President Hu Jintao visits Washington next month. The bipartisan group of lawmakers also urged Wang to deal with U.S. concerns about trade in green- energy goods, beef, protection of copyrighted items and government procurement at a meeting in Washington this month.
deal with U.S. concerns about trade in green- energy goods
The US is set to file a case against China at the World Trade Organization challenging its restrictions on rare earth exports.
The European Union and Japan are expected to support the US in its case.
China produces more than 95% of the world's rare earth metals, and any restriction on exports from Beijing is likely to have a bearing on global prices.
There have also been concerns that Beijing has implemented these quotas in a bid to ensure that prices of these elements remain low within China, a move that critics say gives its manufacturers an unfair advantage.
However, China has denied these allegations, saying that it had enforced these quotas to ensure there was no environmental damage caused due to excessive mining.
Using the US presence as blanket for security, China is busing laying the early foundations for investments and important political ties in Afghanistan, which leaves one question to ask: what will China’s role in Afghanistan be once the US completes its withdrawal in 2014? That answer can be answered from simply observing China’s decade-long march to regional dominance. China has been a keen spectator in the US’s military situation, its economic problems, the political toll they have taken domestically, and the fracturing relationships between the countries it has most invested in: Iraq, Pakistan and Afghanistan.
When US troops leave, China will have only two options – to leave Afghanistan or to find a way to defend their huge Afghan investments, such as the Aynak copper project, from Taliban insurgents.
In the Aynak deal, China must remain for 30 years for mining operations. It has also pledged to build rail and road connections to transport minerals to China.
Last year, the Afghan authorities and the State-owned Metallurgical Corp of China (MCC) signed a $7 billion (Dh25.7 bn) deal to build a rail line from the border with Pakistan up through Kabul and the Aynak copper deposit south of Kabul and then up to the Uzbek border.
What will be the fate of this project after the withdrawal of US troops? Under what conditions is it logical for China to make more huge investments in Afghanistan?
It is hard to believe that resource-hungry China will just walk away from these projects. And to defend its projects, China is unlikely to rely solely on Afghan forces, which are still not fully reliable.
It is highly likely, then, that China will come to replace the US in fighting the Taliban in Afghanistan. Pakistan would continue to play a front line role against Islamist extremists as China’s strategic ally, while the Shanghai Cooperation Organization (SCO) could assume the role now played by Nato. In all this Pakistan will be China’s vital strategic partner.
The European Union, United States and Japan formally asked the World Trade Organization on Tuesday to settle a dispute with China over Beijing's restriction on exports of raw materials, including rare earth elements critical to major industries.
Separately, the Hong Kong Economic Journal reported that China is drawing up plans to cut off Japan’s supplies of rare earth metals needed for hi-tech industry.
The warnings came as anti-Japanese protests spread to 85 cities across China, forcing Japanese companies to shutter factories and suspend operations.
Fitch Ratings threatened to downgrade a clutch of Japanese exporters if the clash drags on. It warned that Nissan is heavily at risk with 26p of its global car sales in China, followed by Honda with 20pc. Sharp and Panasonic both have major exposure. Japan’s exports to China were $74bn in the first half of this year. Bilateral trade reached $345bn last year.