CommentInsight & Opinion

Restraint needed on China-bashing during US election

PUBLISHED : Thursday, 20 September, 2012, 12:00am
UPDATED : Thursday, 20 September, 2012, 7:02pm
 

China-bashing is a well-established standby for US election candidates, which hasn't done much for mutual understanding, even if it hasn't done lasting damage. For example, former president Bill Clinton did it on the campaign trail in 1992 but later backed China's entry into the World Trade Organisation. In the current race for the White House, Republican challenger Mitt Romney has gone one better, if that is the word, by pledging to risk a trade war on his first day in office by declaring China a currency manipulator.

If that day comes, he would appear more statesmanlike if he forgot he ever said it.

Meanwhile, a close election race has forced President Barack Obama to act in response to Romney's jibes that he is soft on China. The timing and place of his response, while campaigning in the electoral swing state of Ohio, is testament to the political factor.

Romney is talking tough for the benefit of a domestic audience, but Obama has played it by the book by laying a complaint with the WTO. It charges that China illegally subsidises its car-parts exporters, which compete with a key sector of Ohio's industrial base. It remains to be seen whether the issue is considered worthy of a hearing under multilateral trade rules.

We trust Obama will not be tempted to stray from those rules and that Romney will show more restraint if the presidential race looks tight in key industrial states, where job losses are blamed on competition from China with the advantage of an allegedly undervalued currency.

There are good reasons for this. Sino-US relations are navigating a sensitive course between renewed US strategic commitment to the region, and tensions between China and its neighbours over competing territorial claims. A serious trade dispute could knock them off course.

China is also going through a sensitive once-in-a-decade leadership transition at the same time as it tries to nudge its economy onto a sustainable growth path through greater domestic consumption and less reliance on exports and investment.

Trade tensions that strengthen protectionist tendencies can do nothing to smooth the path of economic reform, or of global economic recovery. It is not smart politics in the long run to aggravate them unnecessarily for electoral advantage.

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