With Mitt Romney and Barack Obama trading jabs over who will be tougher on China, somehow the bigger picture has been lost: Which U.S. presidential candidate would be better for U.S.-China relations?
It's an important question for Beijing. In 2011, the United States was China's largest trading partner. With millions of its own jobs at stake, Beijing is not only mindful of the U.S. presidential candidates' strong views on China's currency, but on the bigger issue of how each would direct economic policy over the next four years. And this attention comes at a particularly delicate time, as Beijing is watching the U.S. "return to Asia" and "rebalancing" in the Asia-Pacific and thinking about how this will evolve as China rises. These U.S. policies -- along with issues including labor, environment, market access, and intellectual property rights -- will directly affect China's development and prosperity. That in turn will influence China's domestic stability and perhaps even its government's legitimacy, especially as its new leadership emerges from the November Communist Party Congress, just days after the U.S. election.
Despite his aggressive rhetoric, a President Romney might actually be better for China.
Traditionally, Republicans have favored free trade, free enterprise, and less regulation -- qualities more or less compatible with China's present state economic philosophy of development, investment, trade, entrepreneurship, and efficiency -- not to mention a shared concern over the economic risk of curbing climate change. Since the two countries established an official relationship in 1979, their overall relations have been better when Republicans have been in power. The logic is simple: no delusion from the outset, fewer human rights distractions, frank talk, and concrete cooperation whenever possible. This plain dealing tends to stabilize China-U.S. bilateral relations, as it avoids speculation and gaming.
Candidate Romney's repeated promise that he would label China a currency manipulator on his first day in office is well known. But could he really afford to do so? China imported $120 billion of U.S. commodities in 2011, and roughly 1 million Chinese visitors toured the United States that year, each spending an average of around $7,000. Despite China's slowing economy, these numbers will increase in 2012. Would a President Romney really honor his threat, at the cost of hundreds of thousands of U.S. jobs? Two days before the 2008 presidential election, Obama issued a similar threat to protect the U.S. textile business from Chinese competition. After winning the election, his administration spent roughly four months investigating whether China was, in fact, artificially suppressing its currency. The conclusion? China was not manipulating the renminbi.
If Romney does win, he will likely follow in Obama's footsteps; after all, he'd have to think not only of the U.S. economy, but of his second term. As president, Romney should understand that China can be less a competitor than an opportunity for the United States. The current U.S. economic and financial stress is primarily an outcome of globalization and U.S. overspending, especially due to the wars in Iraq and Afghanistan. Washington could blame Beijing for exacerbating the U.S. financial crisis, or it could engage with China -- working together for a collectively beneficial solution.
As America's decade-long war in Central Asia draws to an end, China and the United States will have far less need to cooperate on the anti-terrorism front. And this redistribution of resources could cause problems. With China's fast growth and the U.S. frustration with what it sees as Beijing's growing assertiveness, the Obama administration has shifted to a "pivot" strategy to balance China in East Asia and beyond. A growing amount of friction between the two countries, brought on by concerns such as Washington's suspicion of China's intentions in the South China Sea, have deepened their strategic distrust. If Obama succeeds, he will surely continue in this direction.
President Romney's foreign policy would not necessarily be all that great for China either. He has promised to sell more advanced weaponry to Taiwan and would likely not care to spare much time explaining America's Asia security policy to Beijing. Rather, his administration would simply assert U.S. leadership in the region. On the surface, his blunt statements, if extrapolated into policy, would be more threatening toward Beijing. Nevertheless, because it is so direct, his rhetoric would invite less illusion and misperception, which could in the end be less misleading and less frustrating.
Obama still fruitlessly tries to explain that his Asia pivot isn't intended to contain China, and he makes gestures to cooperate with China when it is possible. This overture (before the pivot) succeeded in the first year of his administration, but since the end of 2009, the bilateral relationship has soured.
Today, China's increased capacity allows it more confidence and means to shape the Sino-U.S. relationship. However, this has to be applied properly, and much of this is based on knowing clearly where the other party stands. China might have had good reasons to bluntly reject the U.S. demand to curb global warming at the 2009 Copenhagen climate change summit, but it would be more constructive if China had engaged the United States more patiently and courteously. Beijing had cause to demand an immediate halt of Washington's weapons sales to Taiwan in 2010 with the threat that the United States would face "real" sanctions. But again, compromise would have been better. Beijing has legitimate "core interests" in the South China Sea, but once again it would make more sense to clarify as early as possible that China doesn't aspire to claim the entire region, as it did early this year. A good China-U.S. relationship depends on both countries. China's rise makes the relationship less dependent on the United States than it used to be, but it is not yet the time when this relationship is more dependent on Beijing's actions than it is on Washington's.
The truth is that it still matters to Beijing who's in the White House. And China won't have as much to worry about with a President Romney. If Romney wins in November, both he and presumably Xi Jinping will likely shake hands and forget what candidate Romney has said thus far, in much the same manner as both Beijing and Washington have moved beyond the rhetoric of the 2008 U.S. presidential campaign.
But China has reason to be concerned that a second term for Obama -- and the continuation of present policies -- would present continuous challenges to the relationship. A new president would allow for a clean slate, one that wouldn't push the United States in a harmful direction with regard to China. And, frankly, the quiet truth is that even if President Romney were to intend irrationally to hurt China, there's little chance he would actually be able to chart a path to do so in which the United States remained unhurt by its own actions.