China bashing no cure for US economic problems
US Republican Presidential candidate Mitt Romney Tuesday launched an assault on China in a campaign speech, accusing the Global economic powerhouse of manipulating its currency and stealing US intellectual property (IP).
The former Massachusetts Governor's China-bashing rhetoric seemed contagious, as a handful of Democratic politicians also picked up the negative tone, and leveled charges against China as if Beijing's monetary and trade policies have hindered job creation in the United States.
China bashing has become a tool of tool of US labor leaders and politicians in these times. Politicians tend to cater to, and even ratchet up the negative sentiment of poorly informed voters toward China, imagining that they can ride the anti-China sentiment to political office, and perhaps the White House.
Such low tactics sometimes work in the US, but there are consequences: blaming China for US economic problems only lets US politician hide behind lame excuses, relieving them of their responsibility to take bold action to address the problems.
The facts show that China is a responsible player on the World stage, whose impressive economic development benefits all and threatens none.
The Los Angeles Times reported that the US$45-B contracts reached between Chinese and US enterprises during Chinese President Hu Jintao's January visit will create 235,000 jobs in the United States.
The Chinese currency (RMB) or Yuan, has appreciated more than 20% vs. the USD since China un-pegged it from the Greenback in Y 2005.
Beijing has exercised a prudent approach to the revaluation of the Yuan, because radical exchange rate fluctuation a recipe for financial, and economic calamity.
The Chinese currency is not to blame for the trade imbalance between China and the United States, as vindicated by the fact that noticeable appreciation of the Yuan over the past years did not help ease US trade deficits with China.
Beijing has repeatedly declared that it has no intent to pursue a trade surplus. The relatively low labor costs in China stem from the reality that China remains a developing country.
China remains at the low-profit end of the World economic system. It still has a long way to go before it can parallel the United States in terms of talent and expertise.
Another China-bashing tool of US politicians is to hint that Beijing encourages piracy. The Chinese government is noticibly against any kind of patent infringement, and has long been engaged in strong efforts to crack down on those crimes. Every thinking person knows the difference between government policy and individual behavior.
Rather than scapegoating China and the Yuan, viable and mutually beneficial options are available for the United States to erase much of its Red ink, including relaxing its restrictions on high-tech exports to China, opening its door wider to Chinese investors, and taking the restrictions off of its banking industry.
China is not cause of the US' economic quagmire, and bashing Beijing is no cure for Washington's problems.
What US policymakers should work on is to revamp their practices, and foster more co-operation with China, which benefits from a thriving US economy. The politicians have it wrong and the Global business leaders have it right, a look at the balance sheets is the best evidence.
In this, the Information Age, it is advisable that politicians like Mr. Romney abandon the China fear mongering bashing approach, and adopt a positive path to gain the White House.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.