12/06/2008 05:12 am ET Updated May 25, 2011

China: Mixture of Hope, Skepticism Greet Obama Victory

BEIJING -- While it hasn"t bumped off the historic meetings between the mainland and Taiwan as the leading story, the election of Barack Obama to the presidency of the United States was a close second on the Chinese news this evening. The official reaction here has been congratulatory toward president-elect Obama, though notes of worry that the new administration could usher in protectionist trade measures are being voiced.

Those fears may be overblown. Obama's policies towards China probably won"t be too different from what McCain's would have been or what George W. Bush's have been. Stability in the region, peaceful resolution of tensions between China and Taiwan, and human rights issues are all important, but the one main pillar of U.S. policy toward China remains "mutually beneficial" trade and economic growth. At the Economic Observer, Wen Zhao warns Obama away from the trap both of the past two presidents have fallen into early in their first terms of flexing "their newfound strength" in which "China became one of the victims."

With that in mind, who did the Chinese want to win the U.S. presidency? Well, that depends on where you look. A China Daily poll recently found 75 percent of its respondents supporting Obama, though that may have more to do with English-speaking expats voting than Chinese. And while expats may have been partying at the Renaissance Hotel and bars and restaurants around Beijing and Shanghai today, a more accurate depiction of how Chinese viewed the U.S. elections likely comes from a recent Gallup Poll. In major cities like Beijing, Shanghai and Guangzhou president-elect Obama was favored by 41 percent compared to McCain's 13 percent. Across the country though, most people -- 83 percent -- didn't care, didn't want to answer, or had no opinion about who the U.S. president should be. And why should they care, asks Xujun Eberlin, the "U.S. president is not the one who cares about their rice bowl."

It's not surprising that most Chinese were ignoring the elections. The presidential election campaign largely ignored China as well. But how the new administration deals with China will be extremely important for the global economy, and eventually, how those Chinese do fill their rice bowls.

As the U.S.'s largest trading partner, owner of about 20 percent of its foreign debt, and holder of around $1.9 trillion in foreign reserves, China has every interest in a strong American economy that consumes its exported products. The recent economic downturn and looming global recession is beginning to hit China harder than was first thought. As exports dry up and job losses related to closings at toy, shoe, textile and other export-related manufacturers mount, China's leadership is becoming increasingly anxious. Instead of being the savior of the global economy as many would like it to be, China is one of the first countries starting to feel the impact of global financial crisis and onset of a global recession on its real economy. As many as 2.5 million jobs could be lost by the end of the year. GDP growth in the 3rd quarter fell to 9 percent and is predicted to drop to around 8 percent next year.

Prominent economist Nouriel Roubini, who predicted the current global financial crisis, says that China is in for a hard landing that could see its GDP growth rate drop to 7 percent, and possibly dip as low as 5-6 percent. A growth rate that low would fail to absorb the millions of new graduates and workers coming of age that will need jobs. And if the figures are correct about the job losses in south China's major export zones from a drop of 1.5 percent in GDP growth in the last quarter, a drop of 3 or 4 percent below what it is now could lead to serious political instability.

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