Mitt Romney has no China Strategy

When it comes to China, it becomes obvious to me that Mitt Romney has a problem. Heard on the radio this morning, and found on a transcript of the debate.

Barack Obama:

And that’s the reason why I set up a trade task force to go after cheaters when it came to international trade. That’s the reason why we have brought more cases against China for violating trade rules than the other — the previous administration had done in two terms. And we’ve won just about every case that we’ve filed, that — that has been decided. In fact, just recently, steelworkers in Ohio and throughout the Midwest, Pennsylvania, are in a position now to sell steel to China because we won that case.

We had a tire case in which they were flooding us with cheap domestic tires — or — or — or cheap Chinese tires. And we put a stop to it and, as a consequence, saved jobs throughout America. I have to say that Governor Romney criticized me for being too tough in that tire case, said this wouldn’t be good for American workers and that it would be protectionist. But I tell you, those workers don’t feel that way. They feel as if they had finally an administration who was going to take this issue seriously.

Over the long term, in order for us to compete with China, we’ve also got to make sure, though, that we’re taking — taking care of business here at home. If we don’t have the best education system in the world, if we don’t continue to put money into research and technology that will allow us to — to create great businesses here in the United States, that’s how we lose the competition. And unfortunately, Governor Romney’s budget and his proposals would not allow us to make those investments.

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Mitt Romney:

Well, first of all, it’s not government that makes business successful. It’s not government investments that make businesses grow and hire people.

Let me also note that the greatest threat that the world faces, the greatest national security threat, is a nuclear Iran.

Let’s talk about China. China has an interest that’s very much like ours in one respect, and that is they want a stable world. They don’t want war. They don’t want to see protectionism. They don’t want to see the — the world break out into — into various forms of chaos, because they have to — they have to manufacture goods and put people to work. And they have about 20,000 — 20 million, rather, people coming out of the farms every year, coming into the cities, needing jobs. So they want the economy to work and the world to be free and open.

And so we can be a partner with China. We don’t have to be an adversary in any way, shape or form. We can work with them. We can collaborate with them if they’re willing to be responsible.

Now, they look at us and say, is it a good idea to be with America?

How strong are we going to be? How strong is our economy?

They look at the fact that we owe them a trillion dollars and owe other people 16 trillion (dollars) in total, including them. They — they look at our — our decision to — to cut back on our military capabilities — a trillion dollars. The secretary of defense called these trillion dollars of cuts to our military devastating. It’s not my term. It’s the president’s own secretary of defense called them devastating. They look at America’s commitments around the world and they see what’s happening and they say, well, OK, is America going to be strong? And the answer is yes. If I’m president, America will be very strong.

We’ll also make sure that we have trade relations with China that work for us. I’ve watched year in and year out as companies have shut down and people have lost their jobs because China has not played by the same rules, in part by holding down artificially the value of their currency. It holds down the prices of their goods. It means our goods aren’t as competitive and we lose jobs. That’s got to end.

They’re making some progress; they need to make more. That’s why on day one I will label them a currency manipulator which allows us to apply tariffs where they’re taking jobs. They’re stealing our intellectual property, our patents, our designs, our technology, hacking into our computers, counterfeiting our goods. They have to understand, we want to trade with them, we want a world that’s stable, we like free enterprise, but you got to play by the rules.

Ezra Klein explained ahead of the debate why this is unlikely to impress Beijing, and why it shouldn’t impress the Chinese leadership. The New York Times adds some more points.

If Romney uses this one argument when it comes to U.S.-chinese trade relations (it’s been his leitmotif throughout his campaign), it only shows that he has no comprehensive strategy – other than doing business with China, and that would be that. What he refuses to see – ostensibly, anyway – is that as a president, he wouldn’t be in a position to talk to Xi Jinping the way Ronald Reagan talked to Zhao Ziyang. This is 2012, not 1988. There have been many crackdowns and many years of Chinese economic and political growth in between. And mind you, Reagan had come to office promising that he would seek to restore normal diplomatic relations with Taiwan. We know where that promise ended.

Obama on the other hand hasn’t talked tough, but he has been tough in defending his country’s industrial base. Basically, the choice between Obama and Romney boils down to a choice between these concepts.

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Related

» Can China Handle America’s Return, The Diplomat, Dec 14, 2011

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6 Responses to “Mitt Romney has no China Strategy”

  1. He’s generally weak on foreign policy, but I think since he does’t seem to have much of his own opinions, he’s too much influenced by certain advisors. We saw how that went in the early 2000s. I particularly liked this part from Obama:

    “And when it comes to our military and Chinese security, part of the reason that we were able to pivot to the Asia-Pacific region after having ended the war in Iraq and transitioning out of Afghanistan, is precisely because this is going to be a massive growth area in the future. And we believe China can be a partner, but we’re also sending a very clear signal that America is a Pacific power, that we are going to have a presence there. We are working with countries in the region to make sure, for example, that ships can pass through, that commerce continues. And we’re organizing trade relations with countries other than China so that China starts feeling more pressure about meeting basic international standards. That’s the kind of leadership we’ve shown in the region. That’s the kind of leadership that we’ll continue to show.” (from the transcript)

    I still think Obama’s silent diplomacy with Chinese is much more effective than the erratic slogans such as “On Day 1 I will declare China a currency manipulator”. And then what?

  2. “On Day 1 I will declare China a currency manipulator”. And then what?

    Great question. I don’t know. But Iran should be very afraid. Next time Syrians can’t receive VoA clearly, Romney will declare Tehran a <satellite signal manipulator.

  3. Good point on Reagan and Taiwan. There were limits before, and limits there shall ever be.

  4. I doubt Mitt Romney knows much about the rise of the Japanese auto industry, but he might want to revisit this idea that government involvement is inherently toxic to the rise of a given business or industry.

  5. but he might want to revisit this idea that government involvement is inherently toxic to the rise of a given business or industry.

    Gee – how un-American of you! Cracks aside, the defense of doctrines’ purity (stuff like “free market”) usually seems to come from vested interests, if not monopolies, and not from “thinkers”, even if businesses keep think tanks to have them do the philosophical decoration. The east-Asian and south-east Asian economic miracles would have been unthinkable without the state playing a guiding role. The problem for a government is to let go in time, in terms of (temporary) import tariffs, subsidies, tacit preferential treatment of domestic industries, etc.. Seems to me that the CCP finds the process of liberalization – in those terms, too – harder to do than most other former regimes in the region did.

    That said, it isn’t the CCP (or the CPSU, for that matter) who invented cartels or monopolies. Pure “free-market” ideology is probably one of the roads that lead to the destruction of efficiently-performing markets.

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