When movies starring Jackie Chan began distributing in the United States, his name became a favorite taunt against Asian Americans in school yards across the country.
Now, US leaders have introduced a new label into the American psyche – “currency manipulator.”
Both President Barack Obama and challenger Mitt Romney have held nothing back in finding a scapegoat for America’s economic woes. Forget the big banks that sent the US economy into a tailspin that it has yet to recover from, or European countries that can no longer pay their bills. The candidates both agree that China is the greatest economic rival of the US and the easiest punching bag, and are racing to convince the electorate that they will be the tougher president against the world’s second largest economy.
In debates, Romney has pledged to label China as a currency manipulator and slap tariffs on Chinese products as he sees fit. Obama has repeatedly touted his tariff in 2009 against Chinese tire imports as an example of protecting American jobs, especially in key battleground states such as Ohio and Michigan.
The sudden attention on China is reminiscent of the 1980s, when Japan was the source of angst for many in the US due to the dominance of Japanese cars and electronics. Now, China is catching up to the US, while holding $1.15 trillion in US debt, making people jittery that the US is borrowing money from its greatest geo-political rival.
What makes China an even easier target is that Americans do not know much about its society and culture. The Chinese government is also vilified as being undemocratic, opaque in decision-making, and often difficult to negotiate with.
But most analysts and media outlets agree that both candidates are guilty of misrepresenting the issue for political gain.
On currency, the Chinese yuan has risen 8.5 percent against the US dollar since Obama was sworn in, and about 30 percent since 2005, when the Chinese government removed the currency’s peg to the dollar. Although some would argue that the currency has more room to appreciate, the direction is unmistakably in the US’s favor.
Obama’s tariff against Chinese tire imports did save about 1,200 jobs, but that cost the US $1.1 billion, according to the Peterson Institute for International Economics. That cost came from higher prices that US consumers paid for more expensive tire imports from other countries. The total bill was a whopping $917,000 per job saved - hardly a good deal.
Once elected, neither candidate can do much by punishing China, because the US stands to lose tremendously if a trade war broke out.
China is now so integral to the US economy that when the Chinese economy slows down, the US economy also sneezes. General Motors, which Obama proudly claims to have saved, sold 34,000 more cars in China than it did in the United States in September. About 18 percent of Apple Inc’s revenues in the second quarter came from China sales.
If the US and China ever retaliated against each other with tariffs and trade barriers, economic havoc would result for consumers and companies alike.
Indeed, administrations usually tone it down when they conduct bilateral relations. US officials who visit Beijing tend to say publicly that China’s peaceful rise is good for the world, and that China stands to benefit the most from opening up its economy. The reasons they give are pronouncedly more positive and forward-looking – if Chinese companies compete fairly with US companies, they will become more competitive. If China protects US intellectual property rights, Chinese products will also enjoy the same protections.
Right now, the candidates are making threats against China that they will not likely carry out.
If the China-bashing continues for the sole purpose of scoring political points, the unintended effect could be a spike in nativist, Us-versus-Them sentiments at home. Both Obama and Romney’s rhetoric could become dinner table and living room fodder across the US. It’ll only be a matter of time before kids start singling out Asian Americans in the school yard.