Washington -- Waving a U.S. census cap made in China, Rep. Mark Schauer, D-Battle Creek, today urged Congress to take a "strong stand" against China for closing off its government procurement to U.S. companies while the U.S. government buys Chinese-made products.

"When will we play tough? When will we get it? At the very least -- the very least -- we need to show China that we are willing to be strong until they open their procurement markets to us," Schauer told the House Ways and Means Committee.

Schauer proposes restricting the amount the U.S. government can buy of Chinese goods to how much in U.S. products the Chinese government buys.

Schauer outlined his legislation at a hearing examining China's trade and industrial policies.

Other options offered included retaliatory penalties on Chinese goods or working through global institutions such as the World Trade Organization to press China for change.

The hearing coincided with mounting pressure in Congress for the Obama administration to push China harder to adjust currency and trade policies to enable U.S. companies to sell more products in the growing Chinese domestic market.

The stakes in the issue are huge for Michigan businesses, which, while seeing overall exports to China soar, complain about intellectual property theft and unfair trade barriers.

Ways and Means Committee Chairman Rep. Sander Levin warned "Congress will act" if China doesn't change trade policies he and other critics say undermine U.S. companies.

The Royal Oak Democrat said China "has made no progress" on its alleged currency manipulation, selectively uses tax rebates to boost exports, puts export restrictions on raw materials and engages in other unfair trade practices.

"All of these policies have a common thread: They have the purpose or the effect of tilting the playing field to favor Chinese companies and against U.S. companies, workers and farmers," Levin said. "This is not a sound or sustainable basis for a mutually beneficial trading relationship."

"China is not acting in good faith and is aggressively engaged in a series of troubling and downright protectionist policies that put our economic relationship at risk," said Rep. Dave Camp of Midland, the ranking Republican on the committee.

"Allowing China to run roughshod over us is not an option. It is in our best interest, and that of the global economy, for us to find a path forward," Camp said.

Christian Murck, president of the American Chamber of Commerce in China, said many U.S. companies are doing "extremely well" in China since it joined the WTO in 2001.

He said the chamber's Business Climate Survey found 46 percent of its companies reported a higher profit margin from their operations in China than their global average.

"There is concern in the American business community that in managing through change, China will resort to top-down industrial planning," Murck said, "and to discriminatory measures favoring domestic enterprises over foreign companies and the state-owned sector over the private sector, potentially resulting in narrowing market access and slower movement toward a market economy."

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