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Foreign Policy

Can America Afford to Get Tough on China?

Oct 26 , 2012

According to Mitt Romney, the U.S. has exactly “42 allies and friends around the world.”According to President Obama, China is not one of them. The President declared in Monday evening's debate that China is, in fact, an American “adversary”, albeit one with the “potential” to be an international partner.  This statement sums up the tone of the 2012 U.S. presidential election where both sides have sought to out “China-bash” the other in an effort to gain the favor of an electorate laser focused on the economy. The casual way in which both candidates have tossed around anti-China rhetoric is, for several reasons, more irresponsible and ill-timed than ever.

First, the tone is reinforcing troubling anti-China attitudes in the U.S. Much of the China-bashing this campaign has focused on trade. Both candidates have pledged they will be “tougher” than the other when it comes to cracking down on China’s “unfair trading practices.” This plays directly into the hand of an increasingly anti-free trade American electorate, battered by five years of economic hardship.

According to the Pew Research center, the percentage of Americans who feel free-trade agreements are “bad for America” increased from 35 percent in 2006 to 44 percent by the end of 2010.  A separate poll conducted this summer by the Mellman Group on American’s views of manufacturing found that 62 percent of respondents favor “getting tough” with China, even if such actions could “start a trade war.” Most concerning is a January 2012 Pew study where American respondents listed China as the country posing the “greatest danger” to the U.S., ranked ahead of even Iran and North Korea. China’s economic strength, not its military might, concerned those polled the most. 

Rather than leading the American public with reasoned ideas about foreign economic policy, both candidates have chosen to reinforce increasingly worrisome trends in U.S. public opinion. In the current anti-trade, anti-China climate, attacking China is serving as more than a boutique issue in a few battleground states as it has in elections past. In 2012, it plays far more broadly than before.

Consequently, more Americans may expect whomever is elected in November to follow through on their promises to “get tough” with China. This is bad news for those of us who believe a trade war with China would, in fact, be very harmful to American jobs and prosperity, not to mention international stability. 

Second, the ratcheting up of anti-China rhetoric in the U.S. is more troubling than normal due to the rising tide of protectionism globally. A report by the European Commission released this summer estimated that the number of international restrictive trade measures grew by more than 25 percent between September 2011 and May 2012. The head of the WTO has publicly expressed concern about this “worrying trend,” warning it will slow global economic growth.

The U.S.-China trade relationship is, arguably, the most important in the world. Regardless of who wins the election, if the next president gets the trade fight with China they are promising, the U.S. will be setting the wrong tone for a global economy that needs American leadership on free trade.

Third, as has been the case for nearly a decade now, politicians in America like to focus on China’s currency policy. This year, that has been especially true for Mitt Romney. The Republican candidate has repeatedly declared that “on day one I will label [China] a currency manipulator,” paving the way for punitive tariffs on Chinese goods. Yet, claiming China gains an unfair trade advantage by keeping its currency, the yuan, undervalued does not pack quite the punch it did even four years ago.  Since the summer of 2010, the yuan has appreciated about 8 percent against the dollar. Go back another five years to 2005 and it has appreciated more than 25 percent. The International Monetary Fund (IMF) recently relaxed its position on the currency, announcing this summer that today it is only “moderately” as opposed to “substantially” undervalued.

As it turns out, complaining about the yuan is so five years ago. If anything, continuing to publicly scold China over its exchange rate policy after undeniable progress is more likely to slow currency reform in Beijing rather than speed it up. China does not want to appear it is being bullied into changing its policies, economic or otherwise. This is especially true this year as China undergoes a leadership change of its own. Do not expect Xi Jinping’s first order of business, after assuming control of the Communist Party of China, to be kowtowing to American trade demands—especially since China’s economy has been growing slowly of late, too.

All of this is not intended to paper over legitimate economic complaints the U.S. has against China. China does need to do more promote a more balanced trade relationship with the U.S. Similarly, concerns over Chinese theft of American intellectual property are especially valid. The problem is not that such issues are being acknowledged, the problem is the politically charged tone that the candidates have adopted when talking about China. At best, it simply is not constructive; at worst, it is combative. Phrases like “get tough on China” or referring to America’s number two trading partner as an “adversary” do nothing but lower the national foreign policy discourse, poison the well of American public opinion, and push Washington and Beijing toward economic conflict.

For these reasons, now is not the time for irresponsible China-bashing in American politics. The future of the American economy, as well as the world’s, depends on the maintenance of a cooperative economic relationship between Washington and Beijing.

Daniel McDowell is an Assistant Professor of Political Science at the Maxwell School of Syracuse University.

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