Accepting his party’s presidential nomination at the Democratic National Convention, US Senator Barack Obama lamented the plight of an American worker who watched as his factory’s equipment was “shipped off to China.”
It was a mild remark, but one typical of the US presidential campaign. Neither Obama nor Republican candidate John McCain has made many references to China, despite the fact that Beijing is one of Washington’s key economic partners and the election is taking place against the backdrop of a struggling US economy.
Perhaps the gentle atmosphere is a sign that relations have matured.
“Certain fundamental aspects of US-China relations will remain consistent no matter who is in the White House,” said Jan Kiely, American co-director of the Hopkins-Nanjing Center for Chinese and American Studies at Nanjing University, offering his personal opinion.
“But a new president will have the chance to influence the relationship through his actions and simply by the amount of attention he gives to it.”
Some issues will inevitably be inherited from current President George W. Bush. The WTO has still to adjudicate on several trade complaints filed by the US against China. And, closer to home, a number of China-related bills, covering everything from human rights to intellectual property rights, remain in bureaucratic channels on Capitol Hill.
One of these, the China Currency Manipulation Act of 2008, was endorsed by Obama. The bill claims that Beijing maintains its currency at an artificially low level in order to keep its exports affordable. Any punitive action on this front would require the Treasury secretary’s endorsement.
The yuan fell 0.2% against the US dollar in August, but it has gained a healthy 6.5% so far this year. Similarly, China’s share of the US trade deficit – US$175 billion in 2007 – is likely to fall as export growth slows.
This may appease the US to some extent, but it remains to be seen by how much.
“We cannot afford another four years of the massive trade deficits we’ve had under President Bush – trade deficits that Senator McCain’s economic policies would only make worse,” Obama said in August.
Although Obama’s solutions focus as much on dealing with internal issues as they do securing better trade agreements, experts don’t discount a potential bout of protectionism.
“John McCain will argue with China based on a case by case situation,” said Jin Canrong, associate dean of the School of International Studies at Renmin University in Beijing. “But it’s possible Obama will take a more general critical attitude.”
Should Obama win, though, political power-plays are unlikely to obscure his view of the bigger economic picture. Jin argues that the engagement policy raised by the Clinton administration is the only option for the US, a view shared by Li Cheng, a senior fellow at the Brookings Institution in Washington. Li said the consensus among China watchers was that Sino-US relations would be largely unaffected by the election result.
Nevertheless, Kiely warns that continuity doesn’t necessarily equate to a smooth ride.
“Challenges abound, events will arise and leadership in cultivating and guiding the relationship will be ever more crucial on both sides,” he said.