Are you worried about your job being shipped to China?
Which presidential candidate's China trade policy will help save American jobs?
On the surface, the candidates positions on China don't differ much. After all, talking tough on China is apparently what every U.S. presidential candidate to get elected. No one questions the wisdom of this tactic, especially in Rust Belt states. Each candidate is willing to escalate the rhetoric to the point of asking voters: “Who is tougher on China? Me or the other guy?”
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But post-election, these same politicians often display an almost teenage crush on China. They portray China as the biggest consumer market that the U.S. can’t do without. Business leaders and their lobbyists, eager for a foothold in China, work to ensure that U.S. trade rules work for them, and not necessarily for American workers.
You may say: “No surprise there.” Politicians, by nature, are hypocrites.
But we the people also tend to be bipolar when it comes to China. China’s our convenient punching bag when we’re frustrated with the state of our economy while paying lip service to China when we see it as a customer for U.S. products.
Hence, what we are seeing on the campaign trail merely reflects what politicians think we want to hear about our Asian competitor.
This ambivalence doesn’t clarify U.S. messaging toward China. Beijing sees through all our posturing. Xinhua, China’s state-run news agency, recently described U.S. politicians’ statements on China as “self-contradictory.”
Xinhua stated the “two main accusations the U.S. presidential candidates, in particular Mitt Romney, [have] filed against China,” are that a) China “has ‘stolen’ American jobs by absorbing U.S. capital,” and b) that “it has ‘manipulated’ its currency, the yuan, to keep the exchange rate at a lower level and retain competitiveness in exports.”
Xinhua concluded: “The candidates should be pleased because all these so-called ‘stolen’ jobs have enabled American citizens to live decent lives with cheaper products at the cost of Chinese resources and manpower.”
Hard to argue with that.
Let’s break down where each presidential candidate stands on China.
Mitt Romney has famously promised, “On Day One I will label them [China] a currency manipulator which allows us to apply tariffs where they're taking jobs.” Romney said in the presidential debate on foreign policy, “They're stealing our intellectual property, our patents, our designs, our technology, hacking into our computers, counterfeiting our goods. They have to understand, we want to trade with them, we want a world that's stable, we like free enterprise. But you’ve got to play by the rules.”
It’s clear Romney is advocating aggressive trade rules with China. But far less clear is whether the former Massachusetts governor, who built his fortune as founder of Bain Capital, a private equity firm, would remain as tough on China once in the Oval Office.
Wow, this topic is likely to attract lots of 'your party will destroy this country, my party is perfect' posts. I hope not, but you don't always get what you want.
China and US, as with any two politically and economically strong countries, have a love-hate relationship and so we can always expect contradictory statements to be coming from both governments.
I hope they both realize that despite all the political posturing and economic competition, in the end both countries receive an enormous benefit from each other's existence and that both will continue to prosper as long as they remember that and continue to work to smooth out some of the worst conflicts before things ever get dangerously out of hand.
I'm not sure either candidate will be better. No amount of realistic tax incentives will stave off a shift of jobs if the underlying economics don't work. (Neither will a like amount of trade obstructionism).
That said, we're starting to see companies in the past two years realize that we can do electronics manufacturing really, really well by adding design value and services on top. That's happened since Obama was elected and there weren't a ton of incentives that I can see that spurred that. I'm not sure it would have been any different if McCain had won.
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