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LAST WORDS: Politics vs. Policy - A Credibility Gap
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altThere’s hardly a dull moment when following the love/hate relationship between the United States and China. This year, however, seems to have a bit more intrigue than usual.
 
2012 marks a significant time for the world’s two largest economies. In November, Hu Jintao will be stepping down as president, likely paving the way for presumptive nominee Xi Jinping.  This roughly coincides with the presidential election in the United States, where Republican Mitt Romney challenges the incumbent President, Barack Obama. 
 
The news headlines in the months leading up to these events are a steady diet of vitriol, muscle flexing, bold proclamations and occasional diplomacy.  
 
The three actors in this drama are playing different roles but their motivation is the same – striking the perfect balance between pleasing their party and constituents while not saying anything that will be too damaging for the long-term relationship of the two countries.  
 
To this effect, Vice President Xi has had several high-level meetings with the Obama administration in an attempt to appear ‘statesmanlike’. In doing so, however, it was noted that he should not appear to be too “soft” on America.  
 
Meanwhile, President Obama has ramped up the rhetoric in the months leading up to the November election.  His attack ads on Mitt Romney’s business dealings while with Bain Capital are evidence of this – making (sometimes dubious) claims that Romney was a catalyst in driving jobs overseas whilst running the venture capital firm.  The Obama administration has also made a few eleventh-hour pleas to the WTO regarding China’s trade practices, which are seen mostly as thinly veiled attempts at improving his tough on China’ credentials.  
 
Mitt Romney has offered perhaps the fieriest rhetoric of the three.  He has labelled Obama as being weak on China and has tried to connect the slow economic recovery in the US to China’s “unfair” trade practices. He promised to label China as a “currency manipulator” on his first day in office and to aggressively pursue violations of intellectual property rights.  His statements haven’t been received well in China, where some have said that these types of actions could potentially spark a trade war.  
 
Taking a hard-line position towards China is nothing new in American politics. The two countries have a complicated history and their present-day relationship is equally knotty.  Conflicting interests however, are often mitigated by mutual dependence.  
 
Brash talk may energise people in America’s manufacturing heartland, but it is not based in reality.  When then Senator Obama was running for president in 2008, his tone on China was similar to Governor Romney’s current stance.  
 
His first term, however, has seen frequent use of soft-power and his recognition of China’s rapid growth prompted a renewed focus on the Pacific in what was dubbed the ‘Asia-pivot’.
 
altThe gap between campaign promises and the actions taken once in office illustrates the truth of the story - suddenly, the issues become real and the respective politicians have to deal with each other. Hence, presidential candidates rarely follow through with their tough campaign promises once elected.  Most politically informed people are not surprised by this and the leaders themselves are also acutely aware of the reality. 
 
An excerpt from Vice President Xi, in an interview with the Washington Post, demonstrates this point: 
 
“As economic globalisation gathers momentum, China and the United States have become highly interdependent economically. Such economic relations would not enjoy sustained, rapid growth if they were not based on mutual benefit or if they failed to deliver great benefits to the United States. The Americans who know the real picture of China-U.S. economic relations, including those in the business community, will echo this point.”
 
Additionally, Governor Romney’s talk about labelling China as a currency manipulator underscores the point that some promises are irrelevant or counterproductive.  First, the U.S. treasury has said publicly that the Chinese Yuan has made progress; hard evidence shows that it has increased 40% since 2005 and 12% since 2010 (after being adjusted for inflation).  
 
In addition, with the Chinese economy facing problems of its own, namely fear of a housing bubble, inflation and rising unemployment, now is probably not a great time to start hammering them on their currency.  Economist and Nobel laureate Paul Krugman stated, “I was very much for that… but the window for that has passed… if you were thinking you were going to get a big boost out of beating up on the Chinese now, two years ago I thought was really a good time to do that. But my god, now that is totally out of date.”
 
In a quote to Bloomberg Businessweek, economist Joseph Stiglizt argues that “China is the only real engine of global economic growth… I’m not sure it’s in our interest to have a major slowdown in China.”
 
The drum-banging about IP rights, although mostly justifiable, should be seen through the lens of history. One could make the claim that this is a natural phenomenon commonly found in developing countries.  
 
James Fallows, a national correspondent for the Atlantic – pointed this out succinctly in a recent essay: “Talking about Chinese industrial growth, Americans are in the position of 19th-century Europeans who acted as if America’s industrial rise could be explained simply by its vast natural resources and its exploitation of immigrant and slave labour, plus its very casual attitude toward copyright and patent laws protecting foreign, mainly British, books and inventions.”
 
The US should be looking internally to solve its economic woes rather than looking to place the blame on China or any other country. The waning American influence will do little to influence Chinese economic policy and there is arguably more to gain from genuine diplomatic overtures than from petty, symbolic shows of strength.  
 
altThe US should welcome China as an ally in aiding economic recovery and growth rather than attempting so-called ’containment policies’ – particularly when taking into account China’s growing middle-class and its appetite for American made electronics, automobiles, clothing and entertainment.  Unfortunately,  appearing to be confrontational towards its second largest trading partner scores political points for US politicians.    
 
Vice President Xi is no stranger to the US or its political mechanisms.  He lived in the US for a short time whilst studying agricultural techniques in Iowa; his daughter attends Harvard and he is long-time friends with former US Treasury Secretary Henry Paulson.  He has shown understanding of the diplomatic hurdles he will face after taking the reins of the PRC.  In a February address to the US State Department, he said that “To build a new type of co-operative partnership between two countries like ours is a pioneering endeavour with great and far-reaching significance. There is no precedent for us to follow and no ready experience for us to refer to. We can only do what Mr. Deng Xiaoping said, “Cross the river by feeling the stones.”
 
Perhaps his speech is garden-variety political decorum, but to his credit, he has shown restraint by not returning any jabs at the US or its leaders.  With all that’s at stake, no one expects a perfect relationship between China and the US. But come November, Xi should find out that whoever is elected will be much more congenial than they had wished to appear during election season.  
 

By Christopher Ribeiro
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