China bashing has become as much a part of the modern American political tradition as criticizing foreign producers of oil, yet it seems few have actually stopped to think about whether it is justified. The American electorate has become accustomed to the predictable torrent of anti-Chinese rhetoric from politicians of a variety of political persuasions -- in large part because of a subtle and uncomfortable recognition that China is beating the U.S. at its own game; Some would even say the Chinese are better capitalists than Americans will ever be. Indeed, China has made remarkable economic progress over the past twenty years -- in large part because of its embrace of 'socialism with Chinese characteristics' -- otherwise known elsewhere as capitalism.
A decade ago, American politicians bashed China largely for political reasons. Today, it is for primarily economic reasons. With China having become the second largest economy in the world last year, and poised to overtake the U.S. in economic size in the next decade, it is no wonder American politicians are on the offensive. It should be no surprise that Americans may bristle at the notion that capitalism has helped China slowly dominate the global economy.
China is, of course, not above criticism, just like any other country, and American politicians do raise some valid points in criticizing China. For example, the Chinese yuan is undoubtedly undervalued, given that it does not freely float in the foreign exchange markets. And the Chinese government does control large parts of the Chinese economy through state-owned enterprises, which distorts the domestic market and gives some Chinese companies unfair competitive advantages. But China must compete in the global marketplace like any other country and it pays a price for supporting companies that should otherwise fail as a result of being poorly run, inefficient, and bloated.
If the U.S. does not like the way China does business, it is free to do business somewhere else. What goes left unsaid, however, is that China has become too important for the U.S. do that, and what U.S. politicians fail to acknowledge is that the U.S. is becoming increasingly irrelevant to the economies of Asia, while China has become the cornerstone of Asia's fantastic economic growth. China's trade with the ASEAN countries jumped six-fold between 2000 and 2009, to US$193 billion, surpassing that of the U.S. China's share of Southeast Asia's total commerce for the period increased to 11.3 percent from 4 percent, whereas the U.S.'s share of trade with the bloc fell to 10.6 percent from 15 percent.
Another thing that gets left unsaid is how important China has become as a destination of U.S. exports. According to the U.S. Treasury's own report, "in the second half of 2009, U.S. exports to China increased by 15 percent on a year-over-year basis, while U.S. exports to the rest of the world fell by 13 percent. In the first quarter of 2010, U.S. goods exports to China rose by more than 40 percent compared to the same period the year before, while U.S. exports to the rest of the world rose by less than 20 percent." China's rapidly growing middle class is the single most important factor for the success of President Obama's Nation Export initiative. The U.S. not only needs to tap China's vast foreign currency reserves (in excess of $3 trillion -- more than 10 times that of the U.S.) in order to finance its trade deficit and fiscal deficit, it also needs access to China's vast market in order to sustain its economic recovery and create much needed jobs for American workers. When was the last time you heard a U.S. politician admit that?
Of course, both countries have legitimate criticisms of the other, but they know they need each other, and neither country is going to disappear. So instead of following predictable (and boring) scripts, why not turn the page on Cold War-esque rhetoric and find ways to join hands with China so as to mutually benefit from each other's comparative advantages? The fact is, China needs and wants the U.S. to succeed economically -- as the largest holder of U.S. Treasury Bills -- and the U.S. should want China to succeed, so that it has a long-term marketplace for its exports. We are not talking here about some starry-eyed vision of utopia, but rather, a realistic and sensible approach to future bilateral economic relations. Rather than bashing China, U.S. politicians would be well advised to forge a stronger relationship with China.
President Obama gets it. Last year he said:
"I believe there is much to be gained from a closer working relationship with China. Indeed there are very few global challenges, if any, we can address effectively without China's active cooperation. They are a global economic power, and engagement with China's government is an important step in stemming the financial crisis that has devastated economies around the world. Both of our nations seek to lay a foundation for sustainable growth and lasting prosperity. My Administration is also working with China on a number of security issues, including stopping North Korea's nuclear program, rolling back the advance of extremists in Pakistan, and ending the humanitarian crisis in Dar fur. The United States and China share common interests on a host of issues -- including energy security and climate change, food safety and public health, and nuclear non-proliferation and counter-terrorism.We want to work with them to address these issues in the years ahead. Improved relations with China will require candor and open discussion about those issues on which we may disagree. We must address human rights, democracy, and free speech. We must also work to ensure that our nations play by the rules in open and transparent economic competition. These important matters will be essential elements of our ongoing dialogue with China."
The only Republican candidate for president we heard that kind of approach from was John Huntsman, who unfortunately failed to connect with American voters.
A sustainable economic recovery in the U.S. cannot be achieved by isolating China. The U.S. and China may seem like the odd couple: the leading proponent of democracy and most individually-oriented nation and the leading communist and most communal-oriented nation. But considering what we can achieve together and what we will lose if we are pitted against each other, forming a Sino-American strategic alliance is critical to the future economic viability of both nations. American politicians, and the American people, would be much better off recognizing this, rather than using demagoguery to sow divisiveness between China and the U.S. The 21st century has no place for tiresome dated Cold War rhetoric. President Obama has the right approach.
*Daniel Wagner is CEO of Country Risk Solutions, a cross-border risk consulting firm based in Connecticut (USA), Director of Global Strategy with the PRS Group, and author of the new book Managing Country Risk. Dee Woo is a lecturer in economics at the Beijing Royal School.
Follow Daniel Wagner on Twitter: www.twitter.com/countryriskmgmt
Scott Paul: Professor Romer Needs Manufacturing 101
John Fullerton and Peter Malik: Beyond Firm-Level Sustainable Capitalism
Dave Johnson: Manufacturing on Planet Economus
i was getting tired of them bashing us europeans, who as a whole have long since overtaken the usa as economic superpower.
http://www.huffingtonpost.com/daniel-wagner/chinabashing-is-a-tiresome-sport_b_1269734.html?ref=china#comments
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Certainly China acts in its own self interest, so does the US and everyone else. That's what countries should do for their citizens. Still, there are plenty of areas where the US and China can mutually benefit. As someone who manages sales for the entire Asia region including China, for a large US company, I find the anti-China rhetoric in the US to be troubling. Sure the Chinese protect their domestic companies first, this is what the US should do as well. However if Germany and Korea can sell more stuff to China than the US, we are clearly missing something. China bashing doesn't help, it only hurts people like us who are trying to export more American goods/services to China. Instead of bashing China, how about working with them to come up with a friendlier trading policy favoring the US over other nations?
Dee and I are not two starry-eyed ideologues who are either naive or unrealistic. What we are saying in this post is that both sides should stop waving their flags and preaching demagaguery to their people and simply stop and look at the world as it is. Neither China nor the US are going anywhere. Neither are going to stop being the powerful influences on the global economy that they are. China is what it is. The U.S. is what it is. Does anyone really think that the two countries - and the world - will be better off by putting their finger in each other's eye?
The U.S. will not, and cannot, control of influence China. History has shown that China will do whatever it wants to do, and that it isn't helpful to try to tell it what to do - any more than it would be for any other country to do so. So why not admit that each side has a comparative advantage and collectively benefit from it? Why not simply say, we need each other and we are here to stay, so how do we make the most of it?
The world would be a much better place if we simply admitted some simple truths. This is one of them...
DW
The collateral damage is often something we are too late to see.Look back in history and you'll know what I'm talking about.
The US and China alliance is not something we would like it to be. This doesn't mean it's not a good thing. It just means it's not good enough and we all should work hard to improve it.By "We",I mean each one of us, not just put blind trust in politicians.
They're not the right values, they're unreliable, they're dangerous, and it all operates in the open.
That being the case, it comes down to state-sponsored industrial terrorism.
It isn't "bashing" if it's true.
Sure we could use China's market for exports, but they have no intention of allowing this. They have clear industrial policies that accept imports only until they can build domestic production and then put up non-tariff barriers to protect local industries. Rightly so (for them). Western policymakers, and one-eyed Wall streeters have idealized visions of trade and politics with China, when what is needed is simple acceptance of areas of disagreement and competition. Pretending that we are going to link hands and enjoy a mutually beneficial relationship whilst walking off into the capitalist sunset helps no one. It just delays the hard choices we will have to make and increases the costs of later action
On top of that, the same can be said for the Chinese. What is good for Wall Street and the Chinese government and capitalists has not been great for the Chinese. Working conditions are awful. Wages are paltry. Inequality has skyrocketed. Pollution is abysmal.
The subsidies, dumping and currency manipulation is cheating, not beating us at our own game unless you apply Wall Street ethics to all Americans.
Washington tolerating this cheating at the behest of Wall Street has created the trade imbalance, the dependence on deficit financing, and the loss of market share and regional influence.
American values have been thrown out the window so one percenters can get richer.
To top it all off, we are now subjected to PR and lobbying about how great and necessary it all is.
"The subsidies, dumping and currency manipulatiÂon is cheating"
The US government/Federal Reserve has never done any of these. durrrrrrrrrrrrrrrrrrr
I would be more inclined to ask all the yahoos "If we cut off relations with China, who'll make all that junk that you buy at Wal-Mart?"
But it serves nobody's interests to make China the villain. However, we must acknowledge that we cannot continue along our current path. If this means we must impose trade barriers, then so be it.
The U.S. economy has lost 50,000 manufacturing jobs per month since 2001, the year China joined the WTO. For each manufacturing job lost, 3-4 support jobs are lost in support roles. (1)
As a result, the American Middle Class is disappearing, and the Wall Street bankers accumulate a greater and greater share of the world's wealth. (2)
References:
1. http://www.tradenewswire.net/archives/1308
2. http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
A Jeep sold in China sells for $85,000 (US) with about $35,000 added in Chinese tariffs. Chinese imports to America see a paultry fraction of this to promote the sale of Chinese products in America. Sure, it's legal, but is it "fair" practice? And you quoted 2009 figures in the article. If you look at more recent estimates the trade gap is widening between the two countries. Ultimately, America will have to apply tariffs to Chinese goods (in defiance of the Free Trade agreement) if we are to cauterize America's bleeding or alternately...begin a campaign against buying Chinese goods. Neither of these options is preferred rather renegotiating the agreement with China stands as a better option...yet when? After America's deficit widens to what point...to prove it's not working for us?
Additionally, technology and patent rights must be universally observed and protected by import nations. China doesn't honor any other nations patent rights, rather has long reverse-engineered import products and then exported to compete with the originating nation (though quality is generally sacrificed over cost).
Instead of suggesting we "work together" (which America has demonstrated), to build "common" goals. China should demonstrate some international respect for global markets instead of acting like a shark.
Say what you want about 911, with all due respect to the families who lossed loved ones, that mission was homegrown, meaning Israel Mossad and the CIA was behind 911. I believe more now than ever based on what is happening with Iranian scientist, what happened in Dubi and learning Israel faked being CIA agents to recruit a terrorist group in Iran to do mischief and blame it on the US. Saddam was threatening to sale his oil to the West not using the Dollar or the Euro but the Dinar. That's why they went into Iraq, not because of WMD. The West would no longer be able to rip off Iraqs oil profits like they did in Iran. They started war in Iraq and Afganistan, which cost billions of dollars which was put on the Chinese credit card, passed the Bush Tax Cuts and didn't pay for the new medicaid program. Who is responsible for the mess this country is in, the Chinese? Really?