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Ted Kaufman Headshot

Romney Seeks an America More Like China

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I've heard some surprising things from candidates during this primary season, but Mitt Romney's answer last Friday to a question about government regulation was in a league of its own. Here's what he said:

I got the chance after I lost to John McCain last time, to go over to -- that was the good part of losing -- I got to go to the Olympic Games in China. It's pretty impressive over there how quickly they can build things, how productive they are as a society. You should see their airport compared to our airports, their highways, their train systems. They're moving quickly in part because the regulators see their job as encouraging private people. It's amazing. The head of Coca-Cola said the business environment is friendlier in China than in America. And that's because of the regulators. That's because of government.

I don't know anyone who defends unnecessary government regulation. Lincoln had it right when he said that government should do only what people cannot do for themselves. Of course, we should constantly monitor and reduce regulatory burdens that don't serve a useful purpose. But it is hard to take the knee-jerk anti-regulation crowd, which now seems to include Governor Romney, seriously. It was, after all, the lack of regulation and oversight on Wall Street that led to the meltdown of 2008 and the worst economic crisis since the Great Depression.

And now China's regulatory policies are something we ought to emulate? Wow.

Governor Romney is correct in saying that if a top government official in China says something is going to happen, it will happen. But a politician who says he is anti-big government should certainly realize that the government controls everything that goes on in China. Those "private people" the Chinese government is "encouraging" may be happy with how they are being treated now, but they would have no recourse if government officials changed their minds.

I have spent quite a bit of time in China and know one thing for sure: None of the reasons China is easy to deal with should be applied in a democratic United States.

How does non-regulation work in China? One example was the recent story about a toxic heavy metal spill into Longjiang River. Two companies had dumped cadmium, a poisonous component of batteries that causes kidney failure and bone damage, into the river. The spill was not reported for two weeks, while people continued to use the water for drinking and cooking. Can you imagine what is being dumped in China's rivers every day?

Another recent story concerned the summary destruction in Beijing of a historic house without any review or discussion. It occurred without notice during the Lunar New Year holiday when no one was watching. It is the rule rather than the exception in China -- the government can move unilaterally to condemn land to make way for development, many times for family and friends.

As for intellectual property rights, some U.S. corporations have learned the hard way. A few years ago, one of them signed up the required Chinese partner for a joint venture that was to use American technology to build a plant. The plant was built, but in short order the corporation learned that its Chinese partner had also built a number of other plants using the corporation's technology. It became a major competitor and would not reimburse the American company for the use of the technology. The U.S. company received no help from Chinese regulators or the legal system.

It may be easier for Coca Cola to do business in China right now, but if they chose to do so Chinese government officials could make it very difficult tomorrow.

Need we list all the products that have been shipped to the U.S. from China without proper regulation? They include toys laced with lead, counterfeit pharmaceuticals, dangerous tires, plastic-filled milk, and faulty drywall.

Do we really want to live in a country that cuts back on regulations to prevent those kinds of products from being distributed? Do we really want to live through another BP oil spill, a spill that could have been prevented if regulators had done their jobs instead of being held back by political appointees who did not believe in regulation?

I don't think so. Our debates ought to be about specific regulations and how necessary they are, not about government abandoning its regulatory function entirely.

And China? Give me a break.

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