Lawmakers demanded to know: Why should China, a major foreign competitor and America's biggest creditor, be receiving millions of dollars in development aid from the U.S.?
A House panel took a close and critical look Tuesday at $4 million of proposed funding for promoting clean energy, encouraging the rule of law and fighting wildlife trafficking. The committee has put that aid, approved last year, on hold as it presses for explanations from the U.S. Agency for International Development of how the money would be used.
Republican Rep. Donald Manzullo of Illinois said the aid for promoting clean energy would boost the competitiveness of Chinese manufacturers at the expense of U.S. manufacturers and jobs, and in a sector where the U.S. has protested to the World Trade Organization over Chinese subsidies.
"Given the state of the U.S. economy and with government debt approaching a record $15 trillion, it is absurd to think that any U.S. government entity would spend a single dollar trying to encourage China to do the right thing," said Manzullo, chairman of the House Foreign Affairs Subcommittee on Asia
Nisha Biswal, assistant administrator for USAID, defended the aid to China as supporting U.S. values and interests. She said none of the programs directly funds the Chinese government or involves the transfer of technology.
The aid aims to improve China's environmental law and regulatory system and, with support from U.S. companies, offers training to Chinese factories on international environmental and health standards. Biswal said the program also offers an opening to Chinese markets for U.S. businesses. Participating companies include General Electric, Honeywell, Wal-Mart, Alcoa, and Pfizer.
In the past decade, various U.S. government agencies have provided nearly $275 million of assistance to China.
But as the United States scrambles to restrain the national debt, foreign aid, which makes up less than 1 percent of the federal budget, is among the first items on the chopping block. Of recipient nations, fast-growing China represents a prime target.
While a strong reaction in Congress won't force a change in President Barack Obama's policy of seeking a cooperative relationship with China, it can constrain it, as Capitol Hill controls the budget strings.
Still, to the apparent surprise of lawmakers, Biswal said the disputed environment and rule of law programs have been mandated by Congress for several years and the Obama administration has not sought funding for them in its most recent budget request.
Biswal said for fiscal 2011, USAID has allocated $12 million for its program in China, an almost 48 percent decrease over 2010. The money will go on for fighting HIV/Aids and for Tibet, whose exiled spiritual leader the Dalai Lama is widely respected in Washington.
Many lawmakers blame China in part for America's economic woes, and in a divisive political climate it is one of the few issues that Democrats and Republicans sometimes agree upon.
Rep. Brad Sherman of California, the sole Democrat to speak at the hearing, said the U.S. was borrowing money from China to pay for things that China doesn't think important enough to pay for itself. He said that amounted to "an insult to the American people."
China, the world's second-largest economy, holds about 11 percent of U.S. federal debt, making it the largest foreign creditor.
Last month, there was bipartisan support for a bill to punish China for undervaluing its currency, which is viewed as hurting U.S. exports at a time when America's unemployment is 9 percent. Lawmakers have also assailed Beijing for human rights abuses, intellectual property theft and counterfeiting components that end up in U.S. military hardware.