February 16, 2012

Getting Worser all the Time!

Governor Romney's guest editorial on China was not as bad as I feared.

Then again, I expected it to be incredibly bad.

Unless China changes its ways, on day one of my presidency I will designate it a currency manipulator and take appropriate counteraction. A trade war with China is the last thing I want, but I cannot tolerate our current trade surrender.

Day One, huh? I think the Governor is lifting this riff from Speaker Gingrich's effective South Carolina speech: "On my way to the first inauguration ball, I will repeal ObamaCare!" It works better with a crowd, a good idea, and a fiendish glint in the presenter's eye.

I happen to be a fan of the yuan/dollar peg. But a larger issue is our countries' relationship. Not content with a trade war, Governor Romney wants to prepare for a shooting war -- with our banker and best customer.

We must also maintain military forces commensurate to the long-term challenge posed by China's build-up. For more than a decade now we have witnessed double-digit increases in China's officially reported military spending. And even that does not capture the full extent of its spending on defense. Nor do the gross numbers tell us anything about the most troubling aspects of China's strategy, which is designed to exert pressure on China's neighbors and blunt the ability of the United States to project power into the Pacific and keep the peace from which China itself has benefited.

Maybe I've been watching too much Rep. Ron Paul lately, but I see managing the China relationship in the context of trade. Intellectual property theft and human rights are legitimate concerns. And, to be fair, the Governor discusses them eloquently.

But bluster seems unlikely to win the day, and -- more importantly -- it marks Romney's being outside the free-trade camp. Larry Kudlow would join him on human rights and piracy; so would I. But currency manipulation is a canard. And, while military strength should be watched, who is surprised that an advancing economic power with a long history is spending newfound wealth on its military?

We could influence them a lot more with trade.

2012 Posted by John Kranz at February 16, 2012 1:19 PM

So fixed exchange rates are now considered currency manipulation?

Posted by: hb at February 16, 2012 2:05 PM

If used to sell us things too cheap, yeah! Dirty Foreigners.

Posted by: jk at February 16, 2012 2:16 PM | What do you think? [2]