Sino-American relations have always been a carefully choreographed exercise. This exercise has been well-played by President Obama and has worked to manage China relations for the benefit of American business. But what would a change in choreography mean for our country’s relationship with China?
Although not unusual, it is always intriguing to follow the logic behind the China-stance of a presidential nominee. Anti-China rhetoric typically follows the same patterns for presidential nominees as it does for nomination contenders wooing supporters during the caucus period: start out barking extremism to whip your most die-hard supporters in to a political frenzy, and end up touting moderation to please the general masses that you hope will vote you into the next round of power play. The unusual thing about the Romney campaign is the speed with which the candidate plans to act on his current China stance. Purportedly, he plans to declare China a “currency manipulator” on his first day in office. You would think there are other things to do on a first day in office besides burning bridges. If his policies on China remain as pugnacious as they appear today, we may be facing some serious problems in the realms of global economic systems and international relationships.
The point of contention that has been on the forefront for Romney has been business dealing with China. In particular he is upset by current trade agreements and Yuan : dollar exchange rates. He says that China takes advantage of American business interests by manipulating the exchange rate to devalue the Yuan. However, “the Chinese currency has appreciated over 30 percent since 2005…telling evidence by many experts that the Yuan is reaching an equilibrium in its exchange rate against the dollar.” It should be remembered that trade is a two way street. Nobody has tied our hands and made us forcibly sign disadvantageous trade agreements. If Romney strains trade relations with China too severely, American businesses will be left to deal with the fallout from decreased exports and employment cuts caused by weakened or otherwise limited economic activity, an issue the candidate never had to deal with during his time at Bain Capital.
Business relations aside, even more complex issues arise if Sino-American relations were to sour. In terms of sheer geography, many countries are dominated by China’s political influence and financial prosperity. Typically these countries tread a fine line between flattering China and courting the United States for favor, and many are not eager to choose a side. If a falling out were to occur, these countries’ hands would be forced. If physical proximity were to be the determining factor, many would side with China. Loosing friends in East and Southeast Asia would seriously retard existing plans to increase our military presence in the region, as friendly countries are more likely to let us use them as a base or port.
Another hot button issue for the Romney campaign—in an effort to appear empathetic and interested with the common people—is the matter of China’s record on human rights, primarily how the current administration has been able to stomach doing business with a country accused of egregious human rights violations. This is a valid consideration to make; however, it is impossible to change a country’s perception of what is acceptable treatment of their people overnight. This has to be worked at through persistent effort. China has historically acted in a defensive manner when confronted with an accusation, so perhaps the best method of transformation is a smarter, less intrusive system of reform than what the Romney administration would likely suggest. Perhaps something more akin to what our current administration has been utilizing?
It’s not news to anyone that there is a lot riding on this year’s presidential election. Of all the issues to consider, the most complex and weighted may be the future of Sino-American relations under a Romney-headed administration. Are we ready to operate under the command of a man who is essentially ready to cut overseas business ties, sacrifice carefully crafted relationships with a multiple Asian-Pacific partners, and squander a chance to have a real and lasting impact on the fate of human rights issues under current Chinese governing powers?
image source: Bloomberg