It’s now been two week (actually a bit more) since returning from China. China, it now seems, is unavoidable. The Presidential Debate featured 45 seconds of chest-thumping and sloganeering by both candidates in a not-so-subtle attempt to demonize that economic system. There’s plenty to concern us. The New Yorker article “Boss Rail” exposed the ugly underbelly of Chinese expansion and the payment of tribute up and down the line which is behind every Chinese project, it seems.
But, I have gotten hung up on the proposition that China succeeds at our expense because it manipulates its currency. Romney has harped on it as have others. Fortunately, the New York Times has a recent and balanced piece (I think) which shows that Romney is, shall we say, inconsistent on the point. What is lost (among other things), that whilst encouraging exports, the money China pockets from its expansion 1) provides cheaper goods to U.S. Consumers and 2) also contributes to historically low interest rates for us in the U.S. As usual we want it both ways. And, by the way, there is a compelling argument that, these days China does not fund our national debt quite as much. Oh my. Now what?
I have also realized that my preoccupation with China is common: I am not special. My mindset is referred to commonly as The China Syndrome, which was describe by Thomas Friedman as “what has become known at The China Syndrome by which journalists visit China and are essentially wowed by its fast-paced growth”
Guilty here. As is Friedman, as described here. I don’t have the answers, but I think the solution is something beyond painting the Chinese as the boogeyman.