Working with China is a far more productive strategy than exclusion
Tom Velk and Olivia Gong say the West gains nothing from bashing China. Rather, it should welcome its investment in commodity-producing assets in the form of transparent partnerships
It is hard to tell which society, Asian or Western, is imprisoned by the more retrograde ideas. Equally so, pleasant surprise is the result of hearing that new and positive attitudes take root in what was previously infertile political soil.
US President Barack Obama is asking the World Trade Organisation to censure China because it supplied US$1 billion in subsidies to its vehicles parts exporters. It's as if Obama wants the world to forget that only a short time ago he supplied General Motors with US$50 billion or more in taxpayer-financed subsidies. US presidential candidate Mitt Romney says China is a "cheater" that manipulates its currency's value so as to artificially stimulate export sales. Yet his own blind trust is invested in China National Offshore Oil Corporation.
Such irrational attacks on free trade by both parties, including the upside-down argument that consumers in importing nations should be denied bargains if they are "too cheap", reverse cause and effect.
The quantity of Chinese money, and hence its value, is determined by China's inflow of international money. When a Chinese exporter earns foreign currency (for example, dollars), it sells the foreign money to the Chinese government via the domestic banking system, and gets renminbi in exchange - thereby increasing China's domestic money supply. If Chinese internal growth is inadequate to absorb the excess money, inflation results.
A lower value for the Chinese currency means it will be cheaper for the West to make additional overseas investment. It also means the West can have cheaper, good-quality goods.
Hammering China produces no benefit. There is a strong likelihood that when Western demagogues demand an increase in the value of Chinese money, they are really insisting that China should depress its own growth by artificially choking its exports. China's won't do it, nor should it.
The logical counter-argument for China is to tell the West: "Make your own industries more efficient, and you would not need to import so much from us."