On November 8, the 18th National Congress of the Chinese Communist Party will convene in Beijing to present current Vice President Xi Jinping as their next president. When Jinping takes office in March, he will face many challenges both from within his country and from the United States.
The Chinese have seen immense economic growth since Deng Xiaopeng’s economic reforms in 1992. In the past 10 years, under current President Hu Jintao, their economy has quadrupled. However, the global recession hit China hard and its economy is growing much slower than in the past.
According to The Economist, “rightists worry that China’s economic reforms have not gone nearly far enough and that political liberalization is needed to prevent an explosion of public resentment.” This resentment would undoubtedly challenge the Chinese Communist Party's continued censorship of public dissent. Protest has become harder to stifle due to the increasingly powerful influence of social media. The Economist also notes that Microbloggers relentlessly continue to expose injustices and push for a free press, which would be “a vital ally in the battle against corruption.”
Regarding the U.S.-China relationship, future President Xi hopes for mutually beneficial situations and cooperation “on the basis of respect, mutual trust, equity and mutual benefit,” according to a statement released by the Chinese Ministry of Foreign Affairs. Xi also called on the U.S. to “refrain from doing anything that might escalate tensions and complicate the situation.” In the U.S. presidential campaign, however, both candidates’ sentiments towards China proved comparatively sour and even threatening due to China’s management of its currency.
In a China-bashing rampage during the final presidential debate, China’s currency management was at the forefront of foreign policy issues. President Obama said he’s been tough on China, citing the fact that China’s currency has appreciated about 11%, adjusted for inflation, and that his administration urged China to further appreciate its currency, and protect U.S. companies’ intellectual property. The New York Times reported that the president also said his administration has set up a task force “to ensure that all countries are playing by the rules.” President Obama also praised China for its progress.
However, former Governor Romney has criticized the current administration for not being tough enough. Romney said that upon his first day in office, he would label China as a currency manipulator and accused its government of artificially lowering its exchange rate for an unfair trade advantage. Labeling China as a currency manipulator, which last occurred in 1994, would lead to negotiations about the issue. But because these negotiations are currently taking place anyway, labeling China as a currency manipulator would only damage the U.S.-China relationship, and thus both economies.
Such China-bashing and talk of harmful labeling has already caused weariness among Chinese officials, as its state-run news agency Xinhua called it “a ritual” that “negatively impacts China-U.S. relations and leaves Americans with the impression that China is responsible for their country’s decline.” They further warned that “scapegoating, isolating and vilifying China will hurt both sides.”
As the first and second largest economies in the world respectively, the U.S. and China are interdependent on one another, and we simply cannot afford to damage relations with our fourth-largest trade partner. The Asian country’s manufacturing is undeniably key to industry, and its investment in the U.S. has been increasing. Moreover, there are hundreds of thousands of American jobs that are dependent on exports to China. “In the worst case” scenario, economic and foreign policy expert Annie Lowrey of the New York Times has warned, “it could set off a trade war, leading to falling American exports to China and more expensive Chinese imports.” With so many of our imports coming from China, more expensive Chinese products would be burdensome for American consumers, and that is the last thing we need for our painfully slowrecovering economy.
Instead, Romney and Obama should take the Xinhau writer, Liu Jie's advice and “acknowledge that engaging with China,” rather than vilifying it, “will amplify win-win results.” After all, strong trade relationships supplement and build strong economies in our global economy, and, as Liu Jie says, “the economic interests of the world's top two economies are far too intertwined for these economic powers to handle a break up.”