Treading carefully [By Jiao Haiyang/China.org.cn]

The Year of the Dragon is a tough one for China. Not only does it have to sustain its social and economic development at home, but the country also has to face hostile trade policies imposed by the U.S. that are byproducts of its ongoing presidential election campaigns. Is China getting ready for these internal and external challenges? We'll see.

For decades, the United States' foreign policy regarding China has been a major debate topic in its presidential elections. As an election-year tradition, from Richard Nixon and John Kennedy in the 1970s, to Bill Clinton and George Bush in the 1990s, to Barack Obama and Mitt Romney (current frontrunner in Republican primaries) today, China occupied a featured spot in critical foreign policy discussions. American voters are wondering if Romney has a clear stance on his trade policy with China. If he does, his rhetoric about China so far shows only how shortsighted he is with regards to future U.S.-China economic and political relations.

Regardless of party affiliations, it seems that the tougher the presidential candidates get on China, the more support they tend to get from the American public. Tough-on-China rhetoric has become mainstream in U.S. politics; no viable presidential candidates can avoid it. Instead, each must take it to the next level in order to compete in the election.

There are several factors for this political climate in the U.S. First, China on the rise appears to be a threat. As the Pew Research poll showed in January 2011, 53 percent of Americans said it was very important for the U.S. to get tougher with China on trade and economic issues. While most Americans saw China as a rising global power, 43 percent said China's rise is a serious problem, and 22 percent even saw China as an adversary. All presidential candidates understand this ratio well and react accordingly.

Second, cheap "Made-in-China" goods have been blamed for hurting – or potentially hurting – certain American industries and thereby provoking the ire of related interest groups. These groups hold vital power in campaign fundraising and in getting votes. Take the 2009 tire incident as an example. Obama's decision to impose special tariffs on Chinese-made tires was well received by American labor unions. In return, they supported his healthcare overhaul in the U.S. However, two years later, while reviewing this trade policy, U.S. China Business Council President John Frisbie argued: "We disagree that the tariffs on imports of low-end Chinese tires have had any positive effect on American job or the American economy. All evidence suggests that the beneficiaries have been other low-end tire producers in Asia and Mexico." Therefore, the tire tariff on China came out as a political victory for Obama but an economic non-factor for the U.S. overall.

Third, campaign interests – not consumer interests – are always the top priority of any election year in the U.S. Cheap Chinese goods have for years kept inflation low in America, and they have helped to sustain the American consumer economy. By one estimate, inexpensive Chinese labor has contributed $1,000 a year to the typical American household via cheap goods from China. Also, it is worth mentioning that U.S. consumers will be the ultimate losers from any tough protectionism policies against China.

Fourth, U.S. politicians do not fully understand the interdependency in the U.S.-China economic relationship. Job protection is a strong argument for tougher trade policies, but how to calculate the impacts tariffs have on jobs is highly hypothetical and is causing ongoing debates among economists. China is a nation worthy of careful consideration by all American politicians who want to serve the American people and who want to optimize American interests. There has been tremendous and long-lasting misunderstandings in policymaking related to job protection in the U.S. and import duties on Chinese goods. Such misunderstandings are counterproductive and can lead to further harmful trade policies that will jeopardize American interests.

In conclusion, tough-on-China policies may help political campaigns this year, but they will not help the U.S. in the long term. American politicians eager for a trade war with China are rather self-serving, and they may well create an unacceptably high cost for American families as well as in the long-run for the U.S. with regards to U.S.-China bilateral relations. There is no doubt that a fair and mature relationship with China will serve U.S. interests better with respect to creating American jobs and fostering sustainable economic growth.

The author is a columnist with China.org.cn. For more information please visit: http://www.h5a3.com/opinion/zhanglijuan.htm

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