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Foreign Policy

Stop Blaming China for America’s Economic Woes – The Fault is Our Own

Jun 27, 2020

Tossing off Deng Xiaoping’s cautionary path of “crossing the river by feeling for the stones” and his recommendation to “never take the lead - but aim to do something big”, Xi Jinping is now moving boldly to regain China’s fuqiang – its wealth and power. 

There is no question that the lives of average Chinese have improved considerably since China ‘opened up’ to the world. Indeed, with the changes from drab Mao-era gray suits, to glitzy designer lifestyles today, seeing China then and now is as if a movie that began in black and white suddenly switched to Technicolor – complete with Dolby surround sound. The changes are remarkable. 

But in recent years, China has been eating our lunch – at our expense

As a result of U.S. investment in Chinese manufacturing the past three decades, the lives of working Americans have changed radically. For many, change has not been pleasant – with U.S. industries devastated by companies moving operations to China and other Asian countries in search of cheaper labor. 

The world’s finger points to China for letting COVID-19 escape its borders. It will likely end up bringing serious injury to China’s nearly 30-year role as the world’s leading manufacturer. 

“Using China as a hub…that model died [in February],” says Vladimir Signorelli, head of Bretton Woods Research, a macro investment research firm.

President Trump has moved to erase Hong Kong of its special relationship with the U.S. – an action that may deliver political benefit to Trump, but is simply plain foolish in the midst of a global pandemic. Trump has also indicated he would terminate the United States’ relationship with the World Health Organization

As a result, apprehension and fear of China is spreading. According to a Pew Research Center survey of Americans conducted in March, negative views of China have spiraled upward. Roughly two-thirds now say they have an unfavorable view of China – the most negative rating for the country since they began polling on this question in 2005, and up nearly 20 percentage points since the start of the Trump administration. 

These negative numbers are likely to climb as both Trump and Biden have already begun to demonize China in the lead up to the November election as a means of diverting Americans’ attention from critical needs here at home. This technique has also been used in many Senate races as a strategy to hold on to power – especially by incumbent Republicans. 

But blaming China for America’s woes is neither a strategy nor a plan that gets 

Americans working again. 

While China Soars, the U.S. Slouches

The Chinese government and its people are fully embracing the future by investing in education, infrastructure, and technology. They understand that knowledge, innovation, and creativity are the drivers of the 21st century that will propel them forward – not only as individuals, but as a nation. They are investing even more heavily in education as a poverty alleviation tool. 

And the statistics don’t lie – China’s strategies are working:

• 700 million people have moved from abject poverty to a Chinese middle class – twice as many people as the U.S. population 

• China has become the world’s fastest growing large economy 

Chinese students significantly outperform U.S. students on international tests 

• China is the world’s largest auto producer 

• China has become a major creditor to the U.S

• China’s economy has been the world’s largest during 18 of the past 20 centuries and they are working hard again to regain their stature as a global power.   

Consider the opposite here in the U.S.: Our government is disinvesting in those very things that would make us strong. The COVID-19 pandemic has virtually wiped out our recent GDP gains of the past few years, and taken out jobs in the blink of an eye. In fact, we have flipped from having one of the lowest unemployment rates in recent years to the highest since the Great Depression. The U.S. economy and our jobs should be what is front and center in the 2020 presidential election – not China. 

Investment, Not Blame

In America, it is high time to invest in:

• Infrastructure. If there was ever a time to dig deep and invest in infrastructure projects across America, it is now: we need to rebuild roads, bridges, ports, dams, water pipes and sewers, and ensure broadband Internet connectivity for both rich and poor in our communities.

• Education. With state and local tax bases eroded due to the pandemic and the associated economic carnage, we need a federal plan that doubles down on educational attainment from cradle to the grave. Knowledge and skill are the glue that binds us.

• Healthcare. COVID-19 has exposed the claim that our healthcare system is “the best in the world” for the lie that it is. As we have known for a decade, it is disjointed, overpriced, uncoordinated, inequitable and unprepared for the pandemic.

• Workforce preparedness. We are overdue for upshifting to automation and AI (artificial intelligence). The rest of the global workforce has been shifting – right under the feet of the average American worker. Creating training and retraining programs that up-skills workers is imperative now more than ever.

• National Service. During the decade of the Great Depression, FDR created the Civilian Conservation Corps and the Works Progress Administration to add value to our nation with the improvement of local and American community infrastructure. Now is the time to bring National Service back.

• National mentorship/apprenticeship academy. It is time to create community centers where older workers disrupted by the 2020 pandemic can pass on their skills and knowledge to a new generation, thereby earning both a paycheck and pride in contributing to the rebuilding and reskilling of America.

• Technology. America needs to maintain and build on our primacy in technology by making investments in the future that include AI, 5G networks, and big data. 

China’s paramount leader, Xi Jinping, is reshaping China and the world. Trump, however, in the midst of a tough and seemingly endless election cycle rapidly slipping toward disaster, instead plays defense, fixating on a “blame China” strategy as his re-election salvation. 

Leaders Wanted 

The world cries out for leadership. Sadly, with a few exceptions, a shared vision and common agenda is increasingly difficult to find on today’s world stage. The direction that Presidents Trump and Xi take in the coming months will set a course that will cement a direction for the world.  

Blame is neither a strategy, nor a plan.  And when we stop casting blame and instead invest in the American people, it can pay dividends for everyone while laying the foundation for America’s contribution to the world.

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