US candidates trade economic sense for political points
- By Zhang Lijuan
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E-mail China.org.cn, October 23, 2012
"China" has become an inescapable target during this year's U.S. presidential debates. From the first debate on Oct. 3 to the second debate on Oct. 16, to today's final debate, China has been pushed back and forth, kicked harder and harder. With regards to the China debate, anyone with precursory knowledge of U.S.-China relations must admit that the candidates are acting in such a childish, selfish and overtly political manner.
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By nature, elections are about politics. However, wouldn't you hope that the presidential candidates would have the sensibility to propose the sensible economic policy needed to propel the country out of recession? Thus far, neither presidential candidate has been forthcoming about such a plan.
Moreover, the candidates have ignored the mutual interdependence between the U.S. and China. American economists laugh about how an American president, as Republican candidate Mitt Romney had suggested, could possibly label China a currency manipulator "on day one" of his presidency. Surely both candidates realize that a crackdown on China would seriously jeopardize any chance for U.S. economic recovery.
Sadly, the main themes being discussed in the 2012 presidential debates run contrary to the interests of the American people. Most voters I have interviewed said that they have no clear candidate preference at all. A dysfunctional American political regime has created new challenges domestically, while damaging America's image globally.
For decades, the U.S. was seen by millions of immigrants and people overseas as a nation where people can fulfill their dreams. Top talent from around the world still dreams about being educated in the U.S. because of the quality of its higher education. Capital from all over the world flows into the U.S. because it has the least national risk and the most political stability. However, the political rhetoric coming from both presidential candidates has caused people from around the globe to wonder what is wrong with Washington.
Such extreme China bashing by both presidential candidates is shortsighted and lacks economic sense. Consider a few important economic facts generated by American scholars but which the candidates seem intent on ignoring:
• Economic interdependence between the U.S. and China is growing. U.S. exports to China were 2 percent of all U.S. exports in 2000, but reached 7 percent by 2011.
• The U.S. Dollar is the only international currency now in the world. Thus, there are not many choices for any country's foreign reserves other than the Dollar. Moreover, the U.S. desperately needs to continue borrowing money in order to balance its huge deficits. Because of its available resources, China is a critical financial partner to the U.S. and it seems odd that the U.S. would work so hard to make China out to be an adversary.
• The American people have benefited hugely from the low cost of "Made in China" products. Inexpensive Chinese goods have saved the average American family $500 a year, kept U.S. inflation low, and helped fuel the U.S. consumer economy by supplying affordable goods in the face of a recession.
• Two-thirds of Chinese exports to the U.S. displace third country exports rather than American products. In another words, if the U.S. did not import these goods from China, it would import them from other nations at a higher cost.
• America will never return to being a major manufacturer of low-end products. That industrialization stage has come and gone. Obama was right at this point, that the U.S. "has to invest in advanced manufacturing," with "the best science and research in the world." Trade sanctions on China will not create high-wage, high-skilled jobs.
• The U.S.'s take on "Made in China" products is about 55 percent according to a research conducted by the Federal Bank San Francisco. On average, for a dollar spent on an item labeled "Made in China," about 55 cents go for services produced in the U.S. Further trade restrictions on China would cost American jobs too.
• Recent case studies on the iPhone and iPad have also proved that China bashing is not a wise trade strategy. Research shows that for every "Made in China" iPhone, with a retail price of $178.96, the Chinese value added for labor and components is only about $6, and for each "Made in China" iPad, which retails at $499, the value of the Chinese input only about $8. Apple in California receives $150 in profits for each iPad sold.
Indeed, many in America like to see the presidential debates performed in a professional way, where candidates identify the issues, analyze the background, discuss solutions, provide policy alternatives, and then let voters decide who is more suitable for the most powerful nation in the world's top job.
However, these debates should also remain positive. Candidates should not fight like children. They should be more constructive towards international relations on both bilateral and multilateral issues, realize the global impacts of U.S. economic policy, and develop a progressive strategy to deal with China trade. Furthermore, they should convince the American people that practical and rational government action should be taken to restructure the American economy.
With positive and professional debates, the American people would be much clearer about whom should they vote for and why they should vote. With a billion eyes watching them, there is little time left for U.S. candidates to skirt the issues with scripted rhetoric. No matter who wins the election, winning on China would mark a return to positive and collaborative spirit that made the U.S. great.
The author is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/zhanglijuan.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
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