Follow us:

Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

October 18, 2012 at 10:25 AM

Getting tough with China

Mitt Romney promises to “crack down on China when they cheat,” particularly as a currency manipulator. This even though Bain Capital, which he founded and led, has invested in China and outsourcing of American jobs. President Obama talks about setting up a task force “that goes after anybody who is taking advantage of American workers or businesses and not creating a level playing field” and bringing a few World Trade Organization cases against the PRC.

I’m sure the neocons would love to make China the next enemy of the United States, the better to keep funneling trillions to the Military-Industrial Complex — even though that war is one we might lose, with severe consequences. But the candidates miss the larger point. If being a currency manipulator is such a big deal, why did we trumpet the completion of the trade agreement with South Korea, one of the world’s biggest currency manipulators?

As with gas prices, climate change and so much else, the candidates fear telling the American people the truth. First, our appetites, buying endless amounts of cheap stuff on credit from China, are one of the big drivers of the trade deficit, the loss of jobs here and the damage to the middle class.

Second, China plays by its own rules and is barely concerned with the WTO. One big example is the insistence that American companies that want to sell in China set up production there and export from there. Historically, Americans would produce things and they would be loaded on ships for export. Not now. Those containers going to China are either empty, or often filled with scrap from dismantled American factories. Another problem is China increasingly insisting on American firms transferring technology to state-owned Chinese firms as a price of doing business; this happened with General Electric and avionics. Neither candidate wants to touch these critical problems.

Anyone who wants the reality of the situation should be a regular reader of Clyde Prestowitz’s blog. He’s a former top Reagan administration trade negotiator and knows the score.

And Don’t Miss: The housing recovery is officially here — what happens next? || The Atlantic

Today’s Econ Haiku:

The leaves change color

Candidates change positions

Let this season pass

Comments | More in China economy and business, Trade

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►