Beijing Nervous About White House Changing Hands
Whether Obama can deliver his campaign promises, or whether he is capable of bringing the changes his supporters expect, only history will tell. In U.S. history, many presidents won by a landslide but ended up with low approval rates. Many became presidents by only a margin but by the end of their terms were regarded the best presidents.
The United States is a political superpower and the global leader both economically, and militarily. The leading trend of thoughts and policies of the candidates presented during the presidential campaign process causes undeniable impact on other countries. The dependency of China’s development on the world is higher than ever due to economic globalization. Beijing is keeping a close eye on how the U.S. presidential change could affect China.China’s largest export market is the United States. The trend of the U.S. economy and changes of its foreign economic policies will have a direct and indirect impact on China’s foreign trade. The growth of export contributes 30 percent of China’s gross national product (GNP). Foreign trade provides 120 million jobs in China. China’s global trade surplus and huge foreign exchange reserve is mostly from its trade surplus with the United States.
Obama Will Be Tougher on China Economic Policies
Based on Obama’s public speeches, his economic stand toward China is tougher than George Bush and Republican presidential nominee John McCain’s position. McCain proposed free trade while Obama wanted fair trade. ‘Free’ and ‘fair’ trade are two totally different positions in trade. The difference is not only ideology, but most importantly their basic political interests.
For example, the largest union in the United States, American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), supports Obama. The AFL-CIO believes a totalitarian country such as China artificially lowers the cost of labor by depriving laborers’ basic rights. Also, cheap labor draws the majority of U.S. investors to China. This is why China enjoys a trade surplus with the United States and the U.S. manufacturing sector cuts jobs after jobs. The AFL-CIO thinks since President Regan, the international trade policies of all presidents, not matter Democrat or Republican, have favored the financial industry and investors and have ignored blue-collar workers. They hope Obama can solve this problem.Two weeks before the vote, two scholars and I were invited to the AFL-CIO to give a speech on globalization. A union representative told us that Obama made a clear promise to the unions at the very beginning of his campaign that he would push for fair trade and protect work opportunities for U.S. workers. This was why many unions contributed much to Obama’s campaign. The AFL-CIO set up a campaign office for Obama in its headquarter with full time staff and 70 phone lines to get people to vote. The union’s local offices had similar setups. The representative told me the members of the union and their families account for 25 percent of the vote.
Possible Trade Policy Change with China
Sure there were Democratic presidential candidates that talked about taking care of blue collar workers in their international trade policies and did not do much after being elected. For example, the union strongly supported former President Clinton during his presidential campaign and Clinton did not cash the check. His active role in building the North American Free Trade Agreement, NAFTA, was seen as a betrayal to union workers. When asked about whether the union would boycott Obama if he did not realize his promise, the representative seriously told me they did not think Obama would fail them. If Obama is like Clinton, the union workers could take to the streets and protest against the government. That would take a heavy toll on U.S. politics and Obama knows it all to well.
Specific details of Obama’s economic policy for China are yet to come. Under the current international trade structure, it is unknown how much room is left for changes in U.S. trade policy. However, the anxiety among U.S. workers during the economic downturn and the strong power with the unions could influence the new president’s economic policies. In fact, five days before Obama was elected president, he criticized Beijing for manipulating the Chinese yuan exchange rate that worsened unemployment in the United States. This might be a signal that he would adjust trade policy with China.Read article in Chinese.
