Washington, D.C. – Today, Representative Walter B. Jones (R-NC) submitted testimony at a hearing of the U.S.–China Economic and Security Review Commission which examined “China’s Industrial Policy and its Impact on U.S. Companies, Workers, and the American Economy.”

“The U.S. economy is in shambles not because we have been consuming too much, but because we have been producing too little,” Rep. Jones stated in his testimony. “A country can only be as rich as the wealth it produces and America must make boosting its production a priority if we are to avoid a prolonged recession or a depression.”

“The first thing I would like to note is that this hearing is about China’s industrial policy,” Jones said. “There’s an old saying in politics that you cannot beat a plan with no plan. I do not advocate a state-run economy, but the United States will not be able to compete economically with China in the long run unless we come up with a comprehensive policy designed to attract investment to domestic industries subject to global competition.”

“For instance, let’s take a look at manufacturing. Analysis of data posted on the U.S. Department of Commerce's TradeStats Express website, http://tse.export.gov/, shows that under the NAICS classification system for ‘all manufactured goods,’ China accounted for $277,132,209,380, or 60.76 percent, of the total U.S. trade deficit in manufactured goods for 2008,” Jones continued. “From the eight-year period of 2001 through 2008, the United States ran a cumulative $3.63 trillion trade deficit in manufactured goods, including a $1.46 trillion trade deficit with China. While running those trade deficits, the United States lost 4,469,000 manufacturing jobs. Total U.S. manufacturing employment is now at its lowest point since July 1941. U.S. manufacturing output also fell by 3.5 percent from January 2001 to January 2009, the first eight-year decline in U.S. manufacturing output since the winding down of production following World War II.”

“My home state of North Carolina has been hit especially hard,” Jones said. “In January 1993, North Carolina manufacturing employment stood at 817,000. By January 2001, that number had fallen to 743,400. Today, the latest numbers available for January 2009 show that North Carolina manufacturing employment has fallen to 479,600. These numbers show that trade deficits do matter and have real world consequences.”

“The question is where does America go from here? A good start would be to provide a level playing field for U.S. producers and service providers. To do this would require a major overhaul of U.S. trade policy to address problems like the $474 billion disadvantage to U.S. producers and service providers caused by foreign border-adjusted taxes such as value-added (VAT) taxes, as well as the persistent problem of prolonged currency manipulation,” Jones concluded.

For a copy of Congressman Jones’ full testimony, click here.

The U.S.–China Commission was established by Congress, and it is statutorily mandated to “monitor, investigate, and report to Congress on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China.” An important part of the Commission’s work has been to conduct hearings in order to receive testimony directly from government, academic, and private sector experts concerning their views on how U.S.-China relations are affecting different aspects of U.S. national security.