“Mitt Romney says the U.S. must be willing to say ‘no more’ to its rocky trade relationship with China. If elected president, he vows to brand China a currency manipulator on his first day in office,” Sanford Reback and Caitlin Webber report for Bloomberg. “He also says he’ll place extra tariffs on Chinese imports to correct an undervaluation of the Chinese currency, the yuan, which helps make Chinese goods cheaper than U.S. goods.”
“That stance puts Romney at odds with President Barack Obama, who’s resisted formally rebuking China for its currency practices,” Reback and Webber report. “The problem is that getting tough with China also puts Romney in conflict with a bastion of Republican Party support, the U.S. business community. Many of the largest U.S. companies favor a less confrontational approach. They’re too concerned about being locked out of the Chinese market to risk taking a bold, public stance against objectionable Chinese practices. Romney’s jobs plan calls for the U.S. to ‘put on the table all unilateral actions’ for tackling unfair Chinese trade practices. He says success in a negotiation can come ‘only if you are willing to walk away.’ Rather than walk away, these U.S. producers of goods and services are focused on capturing as much of the large and growing Chinese market as they can.”
Reback and Webber report, “A weak yuan is only one of a myriad of Chinese trade and industrial policies that hurt U.S. companies. The U.S. trade deficit with China in goods totaled $295 billion last year, the largest deficit the U.S. has ever had with any country. Discriminatory regulations, favoritism of state-owned companies, and the forced transfer of U.S. technology to Chinese joint- venture partners may be more pernicious. Improved intellectual property protection in China would have increased U.S. companies’ sales by $107 billion in 2009, and U.S. employment by 2.1 million jobs, according to the U.S. International Trade Commission… U.S. companies such as Apple Inc. (AAPL) and Wynn Resorts Ltd. make a substantial share of their sales in China. Yum! Brands Inc. operates more than 3,900 KFC and 690 Pizza Hut restaurants there. General Motors Co. (GM), including through its joint ventures, sold more cars in China last year than it did in the U.S. As impressive as those numbers are, it’s the enormous potential of the Chinese domestic market that U.S. companies find irresistible. During the past 30 years, China lifted most of its 1.3 billion people out of poverty, increasing average annual incomes almost 20 times.”
“Romney has left himself some room to maneuver, even on the currency issue, an indication he appreciates the difference between running for the White House and governing,” Reback and Webber report. “In a Wall Street Journal op-ed on Feb. 16, he said ‘a trade war with China is the last thing I want,’ and that he would designate Beijing a currency manipulator ‘unless China changes its ways.’ Should he win the presidency, Romney may find it necessary to take advantage of that flexibility to keep U.S. business on board.”
Much more in the full article here.
[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]
Related articles:
Apple share of China smartphone market nearly halved in Q212 – August 24, 2012
Apple’s iPad surges to grab over 72 percent of China’s tablet market – August 9, 2012
TIME Magazine cover story: ‘The Cult of Apple in China’ – June 21, 2012
70% of iPhone production now comes from Foxconn’s Zhengzhou, China plant – May 25, 2012
Apple growth hinges on China, new devices – April 26, 2012
