Apr 11, 2016

    China blame game in US 2016 race

    AS A close observer of several United States presidential elections, I have found the 2016 race bemusing in both predictable and unpredictable ways.

    The most baffling is that so many Americans say they support Hillary Clinton when various polls show that the majority think she is less honest and trustworthy compared with her rival, Vermont Senator Bernie Sanders.

    Honesty was everything for Americans when I travelled across the US in the summer and fall of 1998 when the only topic was the lie then-president Bill Clinton told about Monica Lewinsky.

    What was also unforeseen was billionaire candidate Donald Trump, who seemed no more than a comedian just months ago, is still one of the Republican front runners. But that is perhaps not that surprising given the US news media's obsession with Mr Trump over the past months and the amount of coverage he has received.

    What is entirely predictable is that China continues to be the bogeyman.

    With former Massachusetts governor Mitt Romney's 2012 vow about naming China a currency manipulator from "Day One" still ringing in my ears, Mrs Clinton and Mr Trump have both railed against China as a currency manipulator despite the fact this is less an issue than in 2012. Former US treasury secretary Larry Summers noted recently that it was a mistake for the US to push for China's exchange rate liberalisation in a hope for the yuan's appreciation while market forces are pushing down the currency.

    Nevertheless, US politicians like to fool average American voters, many of whom have little knowledge of the world, especially when their prime source for information is cable news networks.

    Mrs Clinton and Mr Trump talked about how the US has been ripped off by its growing economic relations with China. They are willing to say anything to please voters who lost manufacturing jobs due to globalisation, and more to automation.

    Mrs Clinton's back tracking on the Trans-Pacific Partnership Agreement, whose standards she called "golden" as secretary of state but which she now opposes so as not to offend powerful trade unions, reflects that motivation.

    Yes, globalisation has helped achieve the China economic miracle in the past three-plus decades, including lifting hundreds of millions of Chinese out of poverty.

    But this can mostly be credited to the Chinese government's policy of reform and opening up to the world.

    Former US ambassador to China Stapleton Roy, whose wisdom I often admire, reminds people that trade is a form of cooperation. And few US consumers are willing to pay much more in department stores or Walmart just because something is made in the US. It is against the basic economic principles of comparative advantage.

    Besides consumers, US corporations have also benefited enormously from trading with and investing in China.

    If US politicians are bothered by the made in China tag, they should come to China to see the numerous US brands, from GM and Ford to Coca-Cola and KFC.

    Many Chinese would probably like the US to take back some of their investments relocated to China to take advantage of the lax environmental regime.

    I hope Mrs Clinton and Mr Trump are ready to roll out red carpets for them when they return or adopt measures to make it more difficult for them to leave the US for developing nations.