The Failure of China Bashing

With China's rapid growth increasingly affecting a wide range of issues worldwide, it has become expedient for US presidential candidates to blame China for some of America's domestic problems. But in this year's US presidential election campaign, China bashing has been virtually non-existent. There are good reasons for this welcome change.

Recent US elections rarely spared China, which found itself a frequent target of populist demagoguery. Its exchange-rate regime, which pegs the Renminbi to the US dollar, was blamed for the mounting US trade deficit. Never mind that America's bilateral trade deficit with China, even including Hong Kong, accounts for less than one-fifth of the total US deficit: growing imports from China and more direct investment by US companies supposedly fueled US unemployment.

Similarly, the unfinished reforms in China's banking sector and state-owned enterprises have been used as evidence of state subsidies for dumping activities. Although the majority of China's exports now come from private companies that receive virtually no loans from state banks , American candidates in previous elections routinely sought to curry favor with working class voters by vowing to protect US jobs against China's supposedly unfair business practices. The jobs issue could be exploited further by citing poor working conditions, low wages, child labor, and other problems commonly found in developing countries.

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