Romney's stance on China debated
Updated: 2012-08-29 10:53
By Zhang Yuwei in Tampa (China Daily)
Republicans air concerns over harming lucrative trade
It is common knowledge that the economy is foremost in US voters' minds as the 2012 presidential and congressional elections approach. Less clear is the domestic economic impact of international trade, especially with China and Latin America, according to experts attending this week's Republican National Convention.
At the same time, trade between the United States and China has been politicized this election year despite the risks of harming the lucrative relationship between the world's two biggest economies.
Mitt Romney, who was formally nominated on Tuesday at the Republican convention in Tampa, Florida, has been outspoken in his views on China. The former Massachusetts governor and co-founder of private-equity firm Bain Capital has accused President Barack Obama of lacking toughness in handling trade issues with China. Romney claims the yuan currency is kept artificially cheap, giving Chinese exports an unfair advantage over US goods.
John Engler, a former Michigan governor and now president of the pro-trade Business Roundtable, said on Tuesday that the US must contend with other aspects of trade policy, including free-trade agreements with other countries. Currency undervaluation is "not just a China problem", he said.
"China is exacerbated because of the size of the trade volume that flows back and forth," Engler said during a panel discussion on trade inside the convention arena.
Romney has vowed several times during the campaign that he would label China a "currency manipulator" on his first day in office if he's elected.
Participants on the panel, which was organized by financial-news provider Bloomberg LP and the convention's Tampa Bay Host Committee, questioned that pledge, however. Several said Romney either wouldn't attempt to make such a move immediately as president or, more likely, that it's merely "campaign rhetoric".
"It would be a delicate challenge for the Romney administration," said Engler, adding that there are "many other urgent issues" than this. He wouldn't rule out that Obama's would-be successor might "look at" the idea once in office.
The US Treasury Department, in its most recent semiannual report to Congress on international exchange-rate policies in late May, declined to label China a currency manipulator. But the department said it would "press for policy changes that yield greater exchange-rate flexibility" in the yuan.
The yuan has risen in value by 40 percent against the dollar since 2005, when China began implementing currency reforms.
The US exported more than $100 billion in goods and services to China in 2011. China is the third-most common destination for US exports, behind Canada and Mexico, and has become one of the top three export markets for 30 states in the country, according to the Washington-based US-China Business Council, which represents over 200 US companies doing business in China.
This year, five governors, including Republicans Dave Heineman of Nebraska and C.L. "Butch" Otter of Idaho, both of whom are attending their party's convention in Tampa, have led trade missions to China, attempting to expand opportunities with the world's second-biggest economy.
On the April trade trip that Otter led, representatives of 16 Idaho companies and organizations visited Shanghai, Chengdu and Beijing to learn more about the Chinese market. Over 40 percent of Idaho-based chief executives surveyed said China - buyer of more than $626 million of their state's goods in 2011 - was the destination they most wanted to sell to.
Jose Abreu, director of the Miami-Dade Aviation Department and a former Florida transportation secretary, said on Tuesday's panel that while states such as his have benefited from trade with many countries, including China, there is "not enough two-way" trade involving the Asian nation.
The problem, Abreu said, is that getting tough on China - over the yuan-exchange rate or by imposing tariffs on imports of solar panels and other renewable-energy gear - is likely to harm US-Chinese economic interdependence.