As Romney and Obama duel over who can better change China's economic behavior, it's time for a fresh perspective on how much the US can change any country.
China has long served as a mirror for Americans, a reflection of their own interests. Today, for example, it’s a mirror on what ails the US economy – a need for better competitiveness and education. But it also shows up in the arguments between Mitt Romney and President Obama over how to deal with the Chinese trade challenge.
Just a few decades ago, China was simply the “red menace,” or a model of governance (communism) to be avoided and blocked. Before that, it served as an object for projecting American ideals onto the world with almost missionary zeal. In 1940, for example, US Sen. Kenneth Wherry stated in a speech: “With God’s help, we will lift Shanghai up and up, ever up, until it is just like Kansas City!”
In the early 19th century, trade with a newly opened China was an expression of an America becoming a global power. And Chinese immigrants, imported as cheap labor for building railroads in the United States, provided the first impression of an America becoming less white and Protestant.
With a population that is nearly a quarter of humanity, China can’t help but serve as a mirror. Whatever it does – such as manipulate its currency – has an outsized effect, forcing a reaction.
And one thing its current leaders have done very well since 1979 is practice economic nationalism, or playing by China’s own rules as it competes for global markets. Even though it joined the World Trade Organization in 2001, it has bent the WTO’s rules to its advantage.
This insular and mercantile approach has lifted hundreds of millions of Chinese out of poverty. But the effect is to stoke economic nationalism in China’s competitors. In the US, warnings of a Chinese “threat” have been part of presidential campaigns for 20 years. They have reached their loudest in the Romney campaign, forcing Mr. Obama to respond.
Mr. Romney promises to officially declare China a “currency manipulator” if elected – “on Day 1” of his administration. It is a popular promise in places like Ohio. And Romney would slap trade barriers on Chinese goods to force Beijing to change its ways.