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Analysis: Lost in debate: reality of U.S.-China ties

By Joe Mcdonald

Associated Press

Published: Wednesday, Oct. 17 2012 6:00 a.m. MDT

FILE - In this Nov. 12, 2011 file photo, U.S. President Barack Obama, right, meets with Chinese President Hu Jintao at the APEC Summit in Honolulu. In the simplistic narrative of U.S. presidential politics, China is a Hollywood villain, a monetary cheat that is stealing American jobs. But in the debate Tuesday night, Oct. 16, 2012 the one-dimensional caricature offered up by Obama and Republican challenger Mitt Romney obscures the crucial reality of U.S.-China relations: For all the talk about getting tough on Beijing, the U.S. and China are deeply entwined, defying easy solutions to the friction and troubles that beset their relations.

Charles Dharapak, File, Associated Press

BEIJING — In the simplistic narrative of U.S. presidential politics, China is a Hollywood villain, a monetary cheat that is stealing American jobs.

But the one-dimensional caricature offered up by President Barack Obama and Republican challenger Mitt Romney obscures the crucial reality of U.S.-China relations: For all the talk about getting tough on Beijing, the U.S. and China are deeply entwined, defying easy solutions to the friction and troubles that beset their relations.

The two countries are the first and second largest economies in the world, doing nearly a half-trillion dollars in trade which in turn buoys the global economy. Their governments are in constant contact on North Korea's and Iran's nuclear programs and Syria's civil war and are trying to work out rules of the road for their huge militaries and such 21st century problems as cyberwarfare.

Few relationships are as critical to the world today. Managing the competition for global influence between the world's superpower and its still-rising rival so that it does not become outright confrontation will be a priority for whoever wins next month's presidential election.

Little of the enormity and importance of U.S.-China ties found its way into Tuesday night's debate between Obama and Romney. Instead, the candidates used it as a convenient foil for their campaign positions about revitalizing the U.S. economy and getting Americans back to work.

Both candidates sought to portray China as vacuuming up American jobs. Their arguments contained half-truths and flaws.

Romney said excessive regulation and misguided policies during Obama's first term drained away American jobs, turning China into "the largest manufacturer in the world." Obama said Romney, through his work for private equity and investment firm Bain Capital, bore responsibility by investing in companies that moved jobs to China.

The title of No. 1 manufacturer is a matter of dispute. The research firm IHS Global Insight said last year that China overtook the United States in 2010, with total output of $1.995 trillion, compared with $1.952 trillion for the U.S. The National Association of Manufacturers disputed that, saying the United States still was in the lead and IHS Global Insight's figures were distorted by changes in exchange rates and other factors.

Left unsaid by both candidates: That if low-cost manufacturing jobs don't go to China, they'll go somewhere else. Think Mexico.

Obama, for his part, said his focus on doubling U.S. exports is "creating tens of thousands of jobs all across the country." But one concrete example he cited in getting tough on China — slapping levies on imports of low-priced Chinese-made tires that he said saved 1,000 jobs — had mixed results.

Economists at the Peterson Institute for International Economics in Washington have said that some 1,200 jobs might have been preserved, but that the cost amounted to $1.1 billion in higher prices paid by American consumers — or $900,000 per job. Whether the outcome was good or bad for Americans is a matter of perspective.

Nor did they point out that in an era of globalized business, an Apple iPhone created in America and assembled in China helps both, as well as component suppliers in Japan, Germany and South Korea.

True, China has used its mix of free-market, state-directed economic policies to support Chinese business to the disadvantage of foreign competitors. Romney came closest to hitting that mark, ticking off China's rampant theft of intellectual property and other trade secrets as well as policies that help hold down the value of its currency, the yuan, thereby keeping low the price of Chinese exports.

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