Both presidential campaigns have poured millions of dollars into television ads recently, promising to crack down on China’s cheating while claiming that their opponent is weak on confronting Beijing. Cynical elites and pundits see this talk as election-season politics and even have their own epithet for it: “China-bashing. “
The truth is, our economic relationship with China is a topic that deserves a full debate, one that is long overdue. The fact that Mitt Romney and President Obama have devoted so much time (and money) to the subject should be one indication that our China policy is in serious need of an overhaul.
The campaign attacks on China only scratch the surface of a far greater concern: our economy isn’t creating enough good-paying jobs, and the imbalance we have with China is growing, not shrinking. American voters detect something wrong, and they wonder why their leaders are sweeping under the rug this tectonic shift in the economic balance of power.
The recent cover of BusinessWeek shows just how skewed this debate is among elites. “We Come in Peace” was the headline of a special report on “Why the World Should Welcome the Rise of China.” I really hope BusinessWeek is right about China’s peaceful rise. But it’s not guaranteed.
When Mitt Romney says “China cheats,” the phrase not only resonates with voters—it’s also true. Beijing is guilty of repeated trade violations, and when actually confronted at the World Trade Organization (WTO), regularly loses trade cases brought not only by the United States but also by other nations and the EU. China’s own five-year plans spell out exactly the types of massive subsidies it provides to strategic industries. And, China continues to manipulate its currency, despite some recent, token efforts.
When the Chamber of Commerce and Business Roundtable say designating China as a currency manipulator would be dangerous for America, they are just plain wrong. Perhaps dangerous for businesses whose sourcing strategy depends on the low wages and rigged exchange rate in China, but not to anyone else in America .
(Read More: The High Cost of Our Addiction to China)
When President Obama speaks of “economic patriotism” and launching trade actions against China, he’s not pandering. He’s responding to an economic reality. Our nation shed 5.5 million manufacturing jobs in the last decade. And the firms that have moved operations overseas? They may love American consumers, but they love sweetheart deals with the Chinese government even more.