Like most China bashing American politicians, Hillary Clinton accused China of “taking away manufacturing jobs from American workers and manipulating the U.S. currency.”  She called for trade sanctions against China, and “urged President Bush to boycott the opening ceremonies of the Beijing Olympics as a protest against Chinese policies in Tibet and Darfur.”^1.

      Indeed, in recent years, China has been accused of trade violation when many American multinational firms were moving their factories to China and taking advantage of China’s cheap wages, well-educated work force, low environment standards and disregard for workers’ rights. Sam Walton, the legendary founder of Wal-Mart, has long held the opinion that supply of cheap merchandise from China would be the key to Wal-Mart’s profit and continuing expansion.^3. In fact, it is China that made the Waltons the richest family in the world, and Wal-Mart enormous profit was obtained on the backs of millions of Chinese Sweat Shop workers. What is incredible is that Hillary Clinton, who Sam Walton called the best director Wal-Mart ever had, would now raise her rhetoric against trade with China during the presidential campaign, as she had nothing but praise when Wal-Mart implemented its China’s strategy of cheap labor. ^4. As a matter of fact, while she sat on Wal-Mart’s board between 1986 and 1992, Clinton would say this about the company: “I’m so proud of this company and everything that it represents. You know, anytime I travel and I tell people I’m from Arkansas, and now finally they’re raising some real positive things about us, no matter where I go. And Wal-Mart’s on top of the list and everybody wants me to tell them about Wal-Mart and Sam Walton and Helen Walton and all of the Wal-Mart associates. And it just makes me feel real good about what we’re able to do and what we can show and the kind of leadership we’re given.”^4. What is equally appalling that Clinton, as the politicians who professed concern about human rights and the interest of ordinary working people, raised no objection with Wal-Mart about the working conditions and the cheap wages of Wal-Mart’s associated factories in China. 

      After Bill Clinton became the Governor of Arkansas; Hillary was the first woman to be a partner in the Rose Law Firm, which was the dominant power in the state. “Among Arkansas firms, Rose is viewed as the whitest of the white shoes. It is dominated by white men, most of who came from privileged families in the state and graduated from one of the two accredited law schools in the state.”^6. Among its biggest clients are Wal-Mart, Monsanto, the agro-chemical giant, Tyson Foods, which is the world’s poultry processor.^6.

     There was a cozy relation between the Clintons and those corporate giants, and as a favor to the Clintons, Tyson executive executed trades for a $100,000 profit with an investment of $1,000 in the commodity market on their behalf shortly before Bill Clinton became the governor. They also donated money to Clinton’s presidential campaign in 1992.^6.

     Such incestuous relationship was always a two-way street, as once Bill Clinton became the president; less stringent environment standards on poultry factory farms were proclaimed, enabling Tyson to accelerate its business expansion. Tyson’s relationship with administration was so close that it led to corruption, as it bribed Clinton’s agriculture secretary with gifts during the legislative process. Tyson was fined $6 million with two executives convicted in a criminal case, but they were pardoned by Clinton before he left the White House. Tyson was also convicted for violation of the Clean Water Act and in the disposal of animal wastes. It was accused of treating rivers “like open sewers,” and for “serious, willful, repeat and other-than-serious violation of safety and health standards” at its plant. ^8. Tyson, not withstanding these unenviable operating records in the United States, is welcomed in China with open arms, as the company is opening a new plant near Shanghai with the capacity of producing 400,000 birds a week, then increasing to 1 million. Ironically, while Hillary Clinton were ratcheting up her rhetoric against unfair trade practice by China, her corporate friends and campaign supporters were reaping huge profits and degrading environment in China.^8.

     Clintons’ other friend and political supporter was Monsanto, and once the Clinton entered the White House in 1992, executives from Monsanto were appointed to be in charge of food. As a result, Monsanto’s bovine growth hormone was approved with no warning or recall despite many side effects of the hormone which was evident and included illnesses even death of the cattles. The milk from the cattle injected with Monsanto’s growth hormone “increases the risk of cancer by up to seven folds, increases colon, prostate cancers risks.”^7.

     Monsanto’s behavior abroad was equally horrific, as Indian farmers were sold expensive genetically engineered cotton on the false promise of increased yields, but negated to mention that it required expensive fertilizer, pesticides and irrigation. Crop failure led to the suicide of hundreds of thousands Indian farmers with many families in ruin.^7.

    Despite the harmful effects of GM foods, and the opposition these foods have encountered all over Europe, the biotech soybeans and corns from Monsanto were granted permanent approval to enter the Chinese market since 2004, and U.S. soy bean sales to China had reached 8.3 metric tons in 2004, more than a third of total U.S. exports. The Chinese approval has been a windfall for Monsanto and is set to brighten its earnings outlook, and not surprisingly, Monsanto achieved recorded earnings in 2008.^9. It goes without saying that China’s soy bean farmers are suffering stiff competition from Monsanto’s subsidized and potentially toxic GM soybeans, losing market shares and income, or even the incentive of farming. It remains to see whether the Chinese cotton growers would suffer the same fate as the Indian farmers.

     Although more than 150 top executives have raised money for her 2008 presidential campaign, Hillary Clinton has been actively pursuing the support of John Mack, the CEO of Morgan Stanley, and the nation’s number two investment bank. Morgan Stanley, like Clintons’ other corporate friends and political donors, has profited enormously from doing business in China, and even obtained permission to buy a bank in China so as “to establish an onshore commercial banking platform in China.” ^12. China, in the hour of need, also lent a hand to Morgan Stanley by injecting $5 billion new capital into the company after the U.S. housing meltdown.^14.

      With the housing meltdown, the American economy and financial market has entered a new crisis. It created market and financial turmoil both in America and abroad, and raised the specter of job losses and severe recession. Under this dire circumstance, China bashing, especially from politicians such as Hillary Clinton, became a daily ritual and a winning proposition to gain political advantage.

      In reality, as a result of Deng’s “Open Door” policy and China using trade as lever for national economic development, China became the “Sweat Shop” for America. China sent annually hundreds of billions of dollars of consumer products, manufactured at a great expense of her environment, to the United States in exchange for a piece of paper called the U.S. Treasury bonds, a piece of IOU which would not be repaid. The immediate result of the accumulation of U.S. Treasury bonds for the Chinese economy is inflation, as the Central Bank of China has to issue more Chinese currencies to exchange the dollar surplus from trades with the United States. Inflation is another form of appropriation of the wealth from the Chinese people, as their savings accumulated through hard work will soon loose purchasing power. What is even more problematic for China is that by integrating financially with the United States, she is under constant pressure to revaluate her currency upward and allow free capital inflow into the Chinese financial market. Ominously, the excessive liquidities will ultimately lead to hyperinflation.

      Thus, the ordinary Chinese working people, on one hand, are struggling with U.S. multinational firms such as Wal-Mart, who through her Chinese contractors are constantly putting the lid on wage growth, and on the other hand are facing domestic inflationary pressure as their currency lose purchasing power due to the accumulation of excessive American paper money.

      Notwithstanding the complaints about Chinese trade and currency manipulation, the financial and trade arrangement with China has been a windfall to the United States, as the balance payment deficit with China “turned out to be the means of financing the government’s federal budget deficit.”^15. “This gave America a free ride, and enabled it to make war with other countries’ savings instead of giving up its own gold reserves or ownership of companies and resources.”^15. Moreover, American multinational firms, either through the use of the American dollar or with their sterling credit credential, are able to purchase Chinese firms with little of their own capital and at a fraction of the real value. The dollar they bought into China if any, will soon end in China’s Central Bank; increase the Chinese money supply, and accelerate inflationary pressure. In the process of cycling, the dollar then returns to the U.S. in exchange for the Treasury bonds. Once again, the U.S. is getting the real Chinese asset for free and at the same time destroys the environment, the indigenous industries and dominates the Chinese economy.^15.

          Under this kind of trade arrangement, one would think that politicians like Hillary Clinton would be happy and congratulate themselves on how smart and fortunate they are, and on how foolish these Chinese elites are for embracing this kind of arrangement with America. Instead, her attack on China has been increasingly vocal as she became desperate politically. The U.S. should get tough on China, she said, and “it is long past time for us to blow the whistle.”^1. “This country manipulates its currency to our disadvantage, they engage in broad-based intellectual property theft, industrial espionage, they do not follow the rules they agreed to follow when they joined the WTO. What do we get in return from them? Well, we get tainted pet food, we get lead-laced toys, and we get polluted pharmaceuticals.”^1.

     Consequently, China is assaulted on two fronts: firstly, her hard working people are being exploited mercilessly, her domestic industry is being devoured by the predatory Western multinationals firms; her environment is being degraded as the factory of the world; her economy is in danger of hyperinflation which already has ended up in the collapse of her stock market while secondly, at the same time she is constantly under attack by the Western press and politicians like Hillary Clinton, as China bashing has become their everyday sport.

    More than 3 years ago, this writer in his book entitled “America and China” has warned the danger of this trade arrangement and the devaluation of American currency with these words: “This is an untenable position for Chinese decision makers, who have not yet had the courage to face the unpleasant situation of opening their market to the world and the calamity of using exports as the driver for China’s economy.”^16.

   Thus, to avoid these unpleasant assaults, which are an affront to China’s national dignity, Chinese decision makers must face the reality and “change its political economic course, and instead of giving its goods away for free to Uncle Sam, to turn production and consumption inward to its poor interior and outward to its neighbors in East Asia, all of which it could and should be doing already.”^17.

   This will open a new chapter in China’s national development, China will then be able to gradually restructure her domestic economy to replace the dollar-export market; develop her agriculture, indigenous industries, and technology and at the same time maintain her dignity, win international respect and avoid being the target of China bashing by the unprincipled, hypocritical Western politicians like Hillary Clinton. The change of development strategy for China will be also out of luck for those Hillary Clinton corporate allies, who unlike Prof. Baum, shamelessly profit enormously from commercial dealings with China and at the same time remain silence to those unfair accusations and fear mongering against China and the Chinese people.

Notes:

1.      Lusetich Robert: “Former Adviser Hits Hillary Over China” May 6, 2008 L.A. Times

2.      Lerner Lisa: “Clinton adviser quite over China rhetoric” April 14, 2008 Baltimore Sun

3.      Ortega, Bob: “In Sam We Trust”

4.      Democracy Now: “Headline for April 10, 2008”

5.      Wikipedia : “Hillary Rodham Clinton”

6.      Labaton Stephen: “Rose Law Firm Arkansas Power, Slip as It Steps Onto a Bigger Stage” February 26, 1994  N.Y.Times

7.      Cohen-Cole Linn: “Hillary, Will You Renounce Your Ties to Monsanto” February 8/10 2008 Counterpunch

8.      Rosenber Martha: “Why Hillary’s Favorite Chicken Company is Eyeing China” March 15/16 2008 Counterpunch

9.      Foodnavigator.com/Europe: China Opens GM market on approval for soy from Monsanto” February 25, 2004 

10.  Lean Geoffrey: “Multinationals Make Billion in Profit Out of Growing Global Food Crisis” May 4, 2008 The Independent/UK

11.  Easton Nina: “Who Business is Betting On” July 9, 2007 Fortune

12.  The Street.Com: “Morgan Stanley Buys China Bank” October 2, 2006

13.  Business Week: “Morgan Stanley: What Great Wall?” July 28, 2003

14.  de la Merced M.J. Bradsher K: “Morgan  Stanley post first quarterly loss, and welcome Chinese investor” December 19, 2007 International Herald Tribune

15.  Hudson, Michael: “Debt Nation” January 2008 Acres U.S.A.  

16.  Mah, Ben: “America and China” P 165

17.  Frank A.G.: “The Naked Hegemon” January 20, 2005, Asia Times Online