11/16/2010 03:53 pm ET Updated May 25, 2011

Climbing a Tree to Catch a Fish

I view with alarm a growing tendency for American politicians from both parties to attribute America's economic difficulties to China. Watching the midterm campaign ads made clear that both Republicans and Democrats accuse each other of standing by while China manipulates its currency, sucking American jobs and wealth across the Pacific.

The overarching midterm election theme is that people are unhappy with politicians, jobs, and the state of the economy. Blaming China for America's unemployment and for the decline in U.S. manufacturing jobs has become politically convenient. The Republicans are defensive because these problems began on their watch; the Democrats say the lack of economic improvement under their leadership is because of China's economic policies, rather than their own actions.

Casting blame solves nothing. We must take action to find solutions. China is not the bogeyman for all that ails us.

Some in China are concerned that President Obama and other US political figures are blaming unemployment on how the yuan is pegged to the dollar. Chinese voices call for the U.S. to enhance the competitiveness of its own companies, rather than use China's own initiative and drive as an excuse for U.S. overspending and underinvestment.

A Hong Kong newspaper suggests that if the United States doesn't find solutions to its domestic problems, and instead shifts blame to the yuan exchange rate or trade protectionism, "it will certainly be like climbing a tree to catch a fish."

Conventional wisdom, dating back to Nixon's arrival in China, holds that the Chinese prefer to deal with Republicans. Many Chinese appreciate the Republicans' pro-business stance. And some Chinese are suspicious of the Democrats' reliance on organized labor, whose members protest against perceived job losses to China.

In this year's midterm elections, Democrats, already defensive over the soft U.S. economy, found China to be a convenient scapegoat. A strong Democratic Party supporter, the United Steelworkers, has been very vocal in calling for sanctions on a wide range of Chinese imports. In a rare show of bipartisanship, many House Republicans also voted to accuse China of currency manipulation.

The reality is that differences of opinion regarding China do not divide cleanly along U.S. political party lines. Republicans often fret about national security and military issues. Democrats are indeed concerned about losing American jobs to Chinese workers.

As a nation accustomed to dominating the world stage, we Americans are uncertain how to react to China's increasing strength in so many arenas. Scapegoating China is convenient for the Democrats. The Republicans want to be tough against China, rejecting Chinese investment in the US because of security concerns. China ends up blamed by both sides for America's difficulties.

Just as Washington politicians blame China for huge job losses, some Chinese politicians have found it convenient to argue that currency changes forced on Japan in the 1980s are responsible for Japan's lost decades. They are concerned that actions such as Bernanke's quantitative easing will put China in a similar position. But the Beijing consensus that currency rises caused Japan's lost decade is just as false as the Washington consensus that China's currency policies are largely responsible for U.S. job losses.

China does need to change its currency system. Even though currency issues are a relatively minor cause of global imbalances, they do make a serious problem worse. China bears a responsibility to become part of the solution, rather than part of the problem.

For its part, America must open up and permit robust inbound Chinese investment, creating new jobs and avenues for economic growth. An example of what not to do was the insistence by 50 members of Congress that Chinese investment in a Mississippi factory making steel reinforcing bars would threaten national security and cost jobs.

On November 14, 2010 an article in China's People's Daily online newspaper noted, "As the U.S. is under criticism for threatening nations' economic stability by flooding money into the global market, China is preparing its own gift to the world economic recovery -- its large market." American companies must learn to accept this "gift" by learning how to market to China's exploding new middle class, which is hungry for consumer goods and services of every kind.

China and the U.S. have so many opportunities to help each other prosper. There is too much at stake for us to allow scapegoating or demonizing of either China or the US.

Both nations must beware of their own tendencies towards climbing trees to catch fish.