- The Washington Times - Thursday, October 18, 2012

President Obama and Republican challenger Mitt Romney risk offending China if they continue to bash the Asian giant in efforts to score political points with voters, according to economic analysts and experts.

In the latest political fad, Mr. Obama and Mr. Romney seem to agree that China is a trade-cheating job robber with an overvalued currency, and the two men are competing with each other over which candidate will be tougher.

“Republicans and Democrats never agree on anything, but they both agree China is wrong,” said Derek Scissors, Asia economist at the Heritage Foundation. “They’re in a race to beat up on China. So you do worry that no matter who wins, there’s a bipartisan consensus that we should blame China for all of our problems.”

But this strategy isn’t sitting well in China, or with U.S. trade groups trying to promote better relations with the world’s second-largest economy.

U.S. politicking could prevent Chinese foreign direct investment here, lead to Chinese retaliation against U.S. companies there, and potentially create a trade war that would hurt both countries, China analysts say.

Most experts agree that while neither man likely plans to follow through entirely on his promises to crack down on Beijing, the campaign talk might force the winner to do something so as not to appear like he had been lying to the voters.

Mr. Obama is preventing a Chinese wind-farm company from operating an Oregon farm because it is located near a naval base. He also accuses Mr. Romney on the campaign stump and in debates of sending American jobs to China.

For his part, Mr. Romney has said he would label the country a currency manipulator on his first day in office, and questions why the president hasn’t done that yet.

“President Obama is just as political on China as Romney,” Mr. Scissors said. “What President Obama has done is basically ignore this issue for three years and then suddenly decide he needs to sound tough for political reasons.”

This doesn’t look good in Chinese eyes.

“It’s basically a character assassination,” said Barry Broome, president and CEO of Greater Phoenix Economic Council, which is trying to attract Chinese investment to Arizona’s solar-power industry. “They’re watching this political debate, and this political debate is demeaning to them. It’s making them realize their worst concerns about the U.S. — that the U.S. looks down upon Chinese culture.”

That could make it difficult for whichever candidate wins when it’s time to sit at the negotiating table with China.

“It’s not very productive,” Mr. Broome said. “I don’t think you can offer a dialogue with China if you’re running for president of the United States and you call them cheaters. It’s incredibly offensive.”

But it’s a great way to win the election.

“Political leaders are basically just tapping into the fears and frustrations of voters,” Mr. Broome said.

“You can pick up a lot more votes by blaming China,” Mr. Scissors added. “It’s much easier to say ‘China cheats.’ Nobody running for office is going to say it’s their fault, first they’ll blame the other party, then they’ll blame China.”

But Mr. Scissors says the candidates are focusing on the wrong issues, noting that China has let its currency rise in value in recent years while such problems as China blocking access to its markets or not cracking down on intellectual property violations, are being ignored.

“Politically, we’re pretending something’s important when it’s not,” Mr. Scissors said, while Chinese laws that require native companies to control joint ventures is “actually a much bigger barrier than the exchange rate.”

Another problem is China’s disregard for intellectual property. “We expect people to pay us for our innovation,” he said, “and China just steals them.”



Click to Read More

Click to Hide