Candidates' China-bashing obscures interdepedence
Source: Agencies |
October 18, 2012, Thursday
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Print Edition
Print Edition
In the simplistic narrative of US presidential politics, China is a Hollywood villain, a monetary cheat that is stealing American jobs.
But the one-dimensional caricature offered up by President Barack Obama and Republican challenger Mitt Romney obscures the crucial reality of US-China relations: For all the talk about getting tough on Beijing, the US and China are deeply entwined, defying easy solutions to the friction and troubles that beset their relations. The two countries are the first and second largest economies in the world, doing nearly a half-trillion dollars in trade which in turn buoys the global economy.
Few relationships are as critical to the world today. Managing the competition for global influence between the world's superpower and its still-rising rival so that it does not become outright confrontation will be a priority for whoever wins next month's presidential election.
Little of the enormity and importance of US-China ties found its way into Tuesday night's debate between Obama and Romney. Instead, the candidates used it as a convenient foil for their campaign positions about revitalizing the US economy and getting Americans back to work.
Both candidates sought to portray China as vacuuming up American jobs. Their arguments contained half-truths and flaws.
Romney said excessive regulation and misguided policies during Obama's first term drained away American jobs, turning China into "the largest manufacturer in the world."
Obama said Romney, through his work for private equity and investment firm Bain Capital, bore responsibility by investing in firms that moved jobs to China.
Left unsaid by both candidates: That if low-cost manufacturing jobs don't go to China, they'll go somewhere else. Think Mexico.
Obama, for his part, said his focus on doubling US exports is "creating tens of thousands of jobs all across the country." But one concrete example he cited in getting tough on China - slapping levies on imports of low-priced Chinese-made tires that he said saved 1,000 jobs - had mixed results.
Economists at the Peterson Institute for International Economics in Washington have said that some 1,200 jobs might have been preserved, but that the cost amounted to US$1.1 billion in higher prices paid by American consumers, or US$900,000 per job.
Whether the outcome was good or bad for Americans is a matter of perspective. Nor did they point out that in an era of globalized business, an iPhone created in America and assembled in China helps both, as well as component suppliers in Japan, Germany and South Korea.
Many in the US say China has used its mix of free-market, "state-directed" economic policies to support Chinese business to the disadvantage of foreign firms.
Yet Romney's campaign promise - repeated in the debate - that he would brand China a currency manipulator on his first day in office may merely be symbolic. The act does not require immediate punitive measures, and while economists estimate the yuan is still undervalued, it has appreciated markedly, as Obama said.
And applying that label may be counterproductive if China retaliates. On cue, Xinhua news agency, soon after the debate, warned that China "perhaps would be forced to fight back," sparking a global trade war.
One Romney supporter in the business community, former American International Group Inc Chairman Maurice Greenberg, told Bloomberg Television last week that the candidate is unlikely to follow through with the promise if elected.
For much of the past two decades, presidential candidates have bashed China on the campaign trail only to find that global trade and hot spots require engaging China.
The candidates' final debate on foreign policy is next week.
But the one-dimensional caricature offered up by President Barack Obama and Republican challenger Mitt Romney obscures the crucial reality of US-China relations: For all the talk about getting tough on Beijing, the US and China are deeply entwined, defying easy solutions to the friction and troubles that beset their relations. The two countries are the first and second largest economies in the world, doing nearly a half-trillion dollars in trade which in turn buoys the global economy.
Few relationships are as critical to the world today. Managing the competition for global influence between the world's superpower and its still-rising rival so that it does not become outright confrontation will be a priority for whoever wins next month's presidential election.
Little of the enormity and importance of US-China ties found its way into Tuesday night's debate between Obama and Romney. Instead, the candidates used it as a convenient foil for their campaign positions about revitalizing the US economy and getting Americans back to work.
Both candidates sought to portray China as vacuuming up American jobs. Their arguments contained half-truths and flaws.
Romney said excessive regulation and misguided policies during Obama's first term drained away American jobs, turning China into "the largest manufacturer in the world."
Obama said Romney, through his work for private equity and investment firm Bain Capital, bore responsibility by investing in firms that moved jobs to China.
Left unsaid by both candidates: That if low-cost manufacturing jobs don't go to China, they'll go somewhere else. Think Mexico.
Obama, for his part, said his focus on doubling US exports is "creating tens of thousands of jobs all across the country." But one concrete example he cited in getting tough on China - slapping levies on imports of low-priced Chinese-made tires that he said saved 1,000 jobs - had mixed results.
Economists at the Peterson Institute for International Economics in Washington have said that some 1,200 jobs might have been preserved, but that the cost amounted to US$1.1 billion in higher prices paid by American consumers, or US$900,000 per job.
Whether the outcome was good or bad for Americans is a matter of perspective. Nor did they point out that in an era of globalized business, an iPhone created in America and assembled in China helps both, as well as component suppliers in Japan, Germany and South Korea.
Many in the US say China has used its mix of free-market, "state-directed" economic policies to support Chinese business to the disadvantage of foreign firms.
Yet Romney's campaign promise - repeated in the debate - that he would brand China a currency manipulator on his first day in office may merely be symbolic. The act does not require immediate punitive measures, and while economists estimate the yuan is still undervalued, it has appreciated markedly, as Obama said.
And applying that label may be counterproductive if China retaliates. On cue, Xinhua news agency, soon after the debate, warned that China "perhaps would be forced to fight back," sparking a global trade war.
One Romney supporter in the business community, former American International Group Inc Chairman Maurice Greenberg, told Bloomberg Television last week that the candidate is unlikely to follow through with the promise if elected.
For much of the past two decades, presidential candidates have bashed China on the campaign trail only to find that global trade and hot spots require engaging China.
The candidates' final debate on foreign policy is next week.
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