Politics can be punishing for someone who tells the truth. All hell broke loose in the US because Gregory Mankiw, chairman of the White House Council of Economic Advisers, reflected that the migration of service jobs to China and India was 'just a new way to do international trade'. If you had 100 economists in a room, 99 would agree and say that outsourcing is a good thing in making America more efficient and competitive. But there are no votes in that. The Democrats jumped on Dr Mankiw's statement with glee, promising to run adverts saying it proved President George W. Bush did not care about job losses. Democratic senators tabled a resolution demanding that Mr Bush sack his chief economist. Other senators have called for tax credits to offset job losses and want a tax on products coming in from countries with a favourable balance of trade. Mr Bush may be the first president since Herbert Hoover (1929-33) to have to defend the fact that there are fewer people in work in the US today than when he was elected. This is dynamite. China's success is stunning. Within two years, Japan, the world's second-largest economy, will be exporting more to China than the US. South Korea does now. Today, China is the world's fourth-largest exporter and is heading for the third spot. This scares people, but China's imports have also surged, growing 40 per cent last year, making it the biggest importer of steel and coal, and the second biggest of oil. Recently, China broke the US$1,000 per capita barrier, and according to the Financial Times, China's growth in per-capita purchasing power contributed more than one-third of the total global growth rate last year - greater than the US, and far outperforming Japan and Europe. The global economy is so integrated that figures can be misleading. General Motors reached its profits targets, despite falling revenues in the US, South Africa and Europe, because of the success of its China operation. Despite all these fantastic statistics, it is worth noting that China's economy is still only the size of California's. Yet some politicians are dusting off their anti-Japan speeches of the 1970s and 1980s, this time casting China as the enemy. I guess people need someone to blame. The European Central Bank has blamed China for Europe's poor growth and high unemployment. China's inexpensive products and export drive have been blamed by some Japanese for their deflation. The US blames China for job losses and says it has forced down wages. But higher tariffs against China would not save US jobs, although it might just save some in Mexico. Europe's inflexible labour markets and high government spending are not China's fault. Economists say that China could be held responsible for no more than 0.1-0.2 per cent of Japan's deflation. US manufacturing job losses have more to do with increases in productivity. The Chicago Federal Reserve has shown that China's currency has had little impact on US jobs. Some French commentators have enjoyed suggesting that China's purchase of US bonds will limit America's power in the future. Yet, the loss to China of dumping US bonds would be lethal. How would depriving America of funds to buy Chinese exports help China? Beijing has met US Treasury officials to discuss how to put some flexibility into the rigid exchange rate system that pegs the yuan to the dollar. The conspiracy theories about China do not add up. On the other side of the ledger, growing Chinese imports, cheap and efficient products as inputs to global commerce raise productivity in host countries and ease inflationary pressure. The west spends and Asia saves, but who is to blame for that? Hong Kong understands this because it has lost jobs to the mainland, but now China is moving upmarket. Textile jobs are shifting to Africa. A Japanese businessman told me he now sourced sesame seeds from Mozambique because China was too expensive. Isn't that great? It is what globalisation is all about - spreading wealth and jobs. But it is hard for politicians confronted by voters who have lost their jobs, and rightfully expect their elected representatives to do something about it. Explaining that job losses are not caused by imports does not work. People need someone to blame, and it is elected politicians who will pay with their jobs. That is why the Republicans are sweating. Mike Moore, a former prime minister of New Zealand, was the first director-general of the World Trade Organisation