Obama Blasts China in His State of the Union Address

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(Newswire.net — January 22, 2015) Beijing, Beijing — In his State of the Union Address delivered yesterday, US president Obama made two main references to China: the first had to do with international business and the other climate change.

He said, “…21st century businesses, including small businesses, need to sell more American products overseas. Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.

“Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense. But ninety-five percent of the world’s customers live outside our borders, and we can’t close ourselves off from those opportunities. More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China. Let’s give them one more reason to get it done…”

First, changing the rules of international business cannot be accomplished by any one country alone, that’s why the WTO exists to help resolve trade and investment disputes. Second, what gives the US the prerogative to set them for the rest of the world, anyway. It’s no longer the immediate post-WWII world when the US was at the height of its hegemony and could dictate its terms to others. There are many countries in Asia Pacific each with its own interests; it’s not just what benefits the US and its workers.

Third, even if US multinationals were to shift their factories from China due to rising cost concerns, it won’t be back to America. It’d be to cheaper labour cost countries such Cambodia, Vietnam and Bangladesh. But, from the extent of FDI to China last year that reached nearly US$120 billion, American and other foreign businesses aren’t going anywhere else any time soon. Mr Obama fails to realize before considering to leave China, they would look at locations in central and western China that offer cheaper wages and costs. They also have to take into consideration the lack of public and trade infrastructure and communications in cheaper wage countries compared to China.

He then said, “…That’s why, over the past six years, we’ve done more than ever before to combat climate change, from the way we produce energy, to the way we use it. That’s why we’ve set aside more public lands and waters than any administration in history. And that’s why I will not let this Congress endanger the health of our children by turning back the clock on our efforts. I am determined to make sure American leadership drives international action. In Beijing, we made an historic announcement – the United States will double the pace at which we cut carbon pollution, and China committed, for the first time, to limiting their emissions. And because the world’s two largest economies came together, other nations are now stepping up, and offering hope that, this year, the world will finally reach an agreement to protect the one planet we’ve got…”

Looking at the terms of the landmark agreement, the Guardian newspaper argues it is China that will be doing the heavy lifting, not the US. Here’s what the two countries committed to: the US side would reduce greenhouse gases (GHG) by 26-28% below 2005 levels by 2025. The Obama Administration had previously consigned to reducing emissions by 17% by 2020. The US will also double emissions cuts of 1.2% per year from 2005-2020 to 2.3 to 2.8% from 2021 to 2025. To keep its promise, the US would submit the new reduction targets by the end of the first quarter in 2015 as its contribution to the UN Framework Convention on Climate Change treaty that will be finalized in Paris in late November.

For its part, China will target CO2 emissions to peak around 2030 or before as well as expand renewable energy sources to about 20% of total usage (from the current 9.6%) by the same year. This is in line with a 2011 Lawrence Berkeley National Laboratory study that predicted China’s CO2 emissions would peak around 2030 due to high carbon intensities involved in a number of sectors that China continues to invest substantially in. This pledge requires China to install up to 1,000 gigawatts (GW) of new sources of nuclear, hydro, wind and solar power.

Thus, the Guardian argued it is the US that will have a relatively easy time to meet its new commitments. US CO2 emissions are already 10-15% lower than in 2005 and falling by 1.5% a year. The new cuts will only require the US to continue on the current path, albeit a little faster.

Reading his address, it’s apparent that America is still full of imperial bombast. When will the US get off its high horse and truly consult with other major powers on the international rules of the game?!