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Public Statements

Currency Exchange Rate Oversight Reform Act of 2011

Floor Speech

By:
Date:
Location: Washington, DC

BREAK TRANSCRIPT

Mr. BAUCUS. Madam President, I rise to speak at this watershed moment in the U.S.-China relationship. This is a relationship that will affect our children's future. And how we manage this relationship now will help determine the long-term strength of our Nation.

Warren Buffett has an answer for anyone who questions America's future.

As he said earlier this year:

The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential--a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War--remains alive and effective ..... Now, as in 1776, 1861, 1932 and 1941, America's best days lie ahead.

I agree.

America has the world's best universities, a tradition of brilliant entrepreneurship, and the drive and ingenuity of our people.

We gave the world the light bulb, the airplane, the Polio vaccine, the personal computer, and the Internet. We have been the world's engine of innovation for more than a century.

But we cannot rest on our laurels. We can and must rise to the challenge of China. This is a challenge I recognized long ago. That is why I led the effort to grant permanent normal trade relations to China, so we could begin to get China to play by the rules.

That is also why I have traveled to China eight different times, to stress to their leaders the importance of playing by those rules.

China has grown explosively during that time period. It is now the second-largest economy in the world. And it continues to expand.

China's growth presents real opportunities for American entrepreneurs and workers. Over the last decade, our exports to China have increased by close to 500 percent. That is eight times faster than the growth of our exports to the rest of the world. China is now the third-largest market in the world for U.S. exports. And it is the number one market for U.S. agricultural exports.

But we should not blind ourselves to the very real challenges that China also poses to American entrepreneurs and workers. Too often, China seeks an unfair advantage in international trade, including by manipulating the value of its currency.

In my most recent trip to China last November, I met with Vice President Xi Jinping and other top leaders. We discussed a broad range of issues.

On currency, my message was clear: China needed to allow its currency to appreciate more quickly to market levels. If not, the U.S. Congress likely would take up--and pass--currency legislation.

Since my trip, China has only allowed its currency to appreciate by 3 percent. The Chinese government continues to intervene to keep its currency significantly below its real market value. That is why I intend to support this bill.

I did not come to this decision lightly. I have never favored unilateral approaches. But the time has come to take action.

And the United States needs a thoughtful China policy that takes action on other fronts as well. The currency issue is only one of many problems facing American companies in China.

The problem of intellectual property theft in China is enormous. To cite but one example, an astounding 80 percent of the software installed on Chinese computers is pirated. That represents an enormous lost opportunity for U.S. software companies, who lead the world in innovation.

And China bars many of our exports from entering its market at all. China shuts out American beef exports entirely. And it imposes barriers that effectively prevent the entry of U.S. companies into its banking, insurance, and telecommunications sectors.

So while this bill addresses an important piece of the puzzle, it is not enough for China to appreciate its currency. China can and must take action to address these other problems as well.

Ultimately, though, America's future as a great economic power will not be dictated by what China does. It will be dictated by what we do. It is about us.

It is about the principles that made America great. It is about our freedom, our justice, our democracy, and the will, creativity, and endurance of our people. And it is about what we must do to get our own house in order so that we can continue to compete and win on the global stage.

We must focus on policies and initiatives that encourage American entrepreneurship.

We must nurture and protect American innovation, both at home and abroad. That is why I introduced a bill to strengthen the research and development tax credit and make it permanent.

We also must reform our Tax Code to unleash new investment and make college more accessible. That is why I have been holding a series of Finance Committee hearings to pave the way for tax reform.

And we must work together to open export markets around the world. That's why I strongly support the pending free trade agreements with Colombia, Panama, and South Korea.

We took an important step last month to pave the way for these trade agreements when we renewed trade adjustment assistance with a strong bipartisan vote. It is now time to approve the trade agreements themselves so that American entrepreneurs, workers, farmers, and ranchers can unlock the potential of these key export markets.

So as we debate this bill, let us not forget that the currency issue is only one of many challenges in our relationship with China. Let us also be mindful of our larger challenges both at home and abroad. And let us continue to nurture American entrepreneurship here at home so that we remain the world's engine of innovation.

As long as we do so, we can be sure that, as always, America's best days lie ahead.


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