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China commentary slams Romney's "foolish" China-bashing
U.S. Republican presidential nominee and former Massachusetts Governor Mitt Romney reacts as he is presented with cake from a member of the media who celebrated her birthday on the campaign plane on the way to Long Island, New York September 13, 2012.
Credit: Reuters/Jim Young
BEIJING |
BEIJING (Reuters) - U.S. Republican presidential candidate Mitt Romney's attacks on China and promise to name the country a currency manipulator if elected are foolish and hypocritical, China's official Xinhua news agency said on Friday.
In a strongly worded English-language commentary, Xinhua said Romney's anti-China rhetoric, if converted into policy upon him assuming office, would trigger a catastrophic trade war and damage the already weak global economic recovery.
"It is rather ironic that a considerable portion of this China-battering politician's wealth was actually obtained by doing business with Chinese companies before he entered politics," Xinhua wrote.
"Such blaming-China-on-everything remarks are as false as they are foolish, for it has never been a myth that pushing up the value of China's currency would be of little use to boost the chronically slack job market of the world's sole superpower, not to mention to magically turn the poor U.S. economic performance around."
Romney has repeatedly pledged to get tougher with China on its trade and currency practices, including pledging to quickly declare China a currency manipulator if elected.
His opponent, President Barack Obama, has accused Romney, who founded and led private equity firm Bain Capital, of outsourcing jobs to both India and China.
China says the yuan's exchange rate is essentially set by market forces, and that the currency has appreciated about 30 percent against the dollar since a landmark revaluation in 2005.
The Chinese government has generally been silent in the run-up to the November presidential poll due to a policy of non-interference in the affairs of other countries.
But state media has waded into the debate to lambaste what it sees as attempts to play the "China card", in a reflection of official thinking and concern the country's name is being unfairly dragged through the mud overseas.
Xinhua said such China-bashing had been "a cancer in U.S. electoral politics, seriously plaguing the relations between the two countries.
"It has also become a handy tool for U.S. politicians who try to court the votes and support of ill-informed voters by ratcheting up antagonistic sentiment towards China, while truly serious social and economic woes within the United States have been left unfixed."
The United States should "put its own fiscal house back in order, substantially slash its tremendous military expenditure, and optimize its economic structure", it added.
"It is advisable that politicians, including Romney, should abandon ... short-sighted China-bashing tricks and adopt at least a little bit of statesmanship on China-U.S. ties."
(Reporting by Ben Blanchard; Editing by Ron Popeski)
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More … baby … more!
But hey, what Ben B. is doing isn’t any different. Keeping the dollar down and melting public debt away with inflation.
No different in my eyes.
The Fed’s quantitative easing and China’s currency manipulation are not equivalent at all.
China’s dictators depress the yuan’s value to gain an unfair advantage in world trade. The low yuan value makes Chinese labor very cheap compared to American labor. This gives Chinese exporters and manufacturers a huge price advantage. And this explains China’s massive trade surplus and 8% growth rate. It also partly explains China’s high inflation.
In contrast, the Fed’s dual mandate is to simultaneously limit inflation and maximize employment. Has the Fed also devalued the US dollar? Certainly not against the yuan or the Euro! The yuan value has increased only 3.5% annually over the past two years. And the Euro is generally weak.
In fact, the Fed’s quantitative easing has not degraded the US dollar, because other deflationary factors are working in opposition. For example,
1. American banks are cautious about lending, and this restrains economic growth.
2. American companies are investing less in America, because they are concerned about the slow economy.
3. Money tends to circulate more slowly in the US these days, because consumers are poorer, and the unemployed have little money to spend.
These deflationary factors tend to support the dollar. Also, the US dollar gets bid up when considered a safe haven from Euro contagion panic.
Apparently, Ben Bernanke understands this, and intends QE to boost the US economy, not to drastically devalue the dollar.
Actually, since the Fed must control inflation, they must limit any action that would sharply devalue the US dollar. This is because a drastic devaluation would drastically increase import prices, which would cause inflation. Hence, while the Fed could act to ease the dollar lower, they cannot cause a sharp devaluation. And they have no way to target a specific currency, such as the yuan. In contrast, China targets whatever specific currency it pleases, to retain its price advantage.
Clearly, it is China who is guilty of currency manipulation, not the USA.
China’s dictators are manipulating the yuan value to keep the Chinese economy racing ahead, so as to distract Chinese citizens from their lack of democracy and freedom. Sadly, the consequence for us is economic devastation and high unemployment, which is the price we are paying to help China’s dictators stay in power.
In fact, the USA has lost 2.8 million jobs and 56,000 businesses to China since 2000.
Reference:
http://blogs.reuters.com/david-cay-johnston/2012/06/20/americas-long-slope-down/
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