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National Foreign Trade CouncilNATIONAL FOREIGN TRADE COUNCIL WILLIAM REINSCH ON BLOOMBERG TV JANUARY 21, 2010 SPEAKERS: WILLIAM REINSCH, PRESIDENT, NATIONAL FOREIGN TRADE COUNCIL SCARLET FU, BLOOMBERG NEWS (This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.) 11:22 SCARLET FU, BLOOMBERG NEWS: Now, for more on what Google's plan to pull out of China means for U.S.-China trade. It's a story we have been following for a couple of days now. We have to join us William Reinsch, the former U.S. Undersecretary of Commerce and current President of the National Foreign Trade Council. He is joining us from Washington right now. And we should add that he's also a member of the U.S.-China Economic and Security Review Commission which submits reports to Congress on national security implications of U.S. economic relations with China, so quite a mouthful there. Mr. Reinsch, thank you for joining us this morning. I want to ask you was the hacking incident into Google's China Web site and Google's subsequent threat to leave China a turning point in any way for U.S.-China trade relations? WILLIAM REINSCH, PRESIDENT, NATIONAL FOREIGN TRADE COUNCIL: Well, I think it dramatizes a growing set of problems that a lot of companies have had there. As your previous report just indicated their government is really taking a step, I think steps, in an anti-market direction, more subsidies, more national championed industries, continuation of an export- led growth Thomas sabo charms strategy, overvaluation of their currency. I think you're seeing more and more American companies frustrated and rethinking the nature of that relationship and certainly there's going to be more pressure on the U.S. government to rethink it. The Google episode, which is a little bit of a special case because of the services they provide, nevertheless I think dramatizes that and has forced companies to pause a replica tag heruer watches little bit and think a little bit more carefully about where that relationship is going for them. FU: So Google's stance could become representative of how U.S. companies are doing business in China, might start standing up for themselves? REINSCH: Well, I think in a large sense yes. I don't expect a lot of companies to pull out. Google in that sense is a special case. They are under special pressures from the Chinese government. I would look going forward for new investment increasingly to go somewhere else. FU: Like where? REINSCH: I would guess India, probably India, Brazil, other big markets. FU: So other BRIC countries. REINSCH: Yes. FU: Okay, China in its defense probably feels that it has a right to call the shots if you're doing business in its country and it's probably earned it to a large extent by being the biggest creditor to the U.S., the U.S. government really not having a lot of leverage here. REINSCH: Well, I'm sure their government thinks that. If you talk to their economists and you talk economist to economist I think their prescription for the Chinese economy is really the same is American- European economists. They ought to revalue the RMB. They ought to pursue a domestic growth consumption strategy. They ought to, you know, 04:00 - 1969-Dec-31 - post comment
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