The Candidates on U.S. Policy toward China

Thursday, June 7, 2007 7:08

When assessing political risk for China operations, the natural course of thought for many is to look at China’s political situation.. and then make judgments. There are numerous laws coming our, numerous laws are being reformed, and depending on the scandal of the month things can change very quickly.

However, 18 months ago I started to see that it was going to be important for firms to assess their U.S. political risk as well. Schumer was gearing up to push a bill that would assess a 27% tax on Chinese goods, the RMB was getting nearly daily coverage, and with during the run up to the midterm elections … there was definitely a change of mind set when it came to China

and the 6 months I wrote a piece entitled How U.S. Politics May Affect Your Operations in China where I laid out the political climate in Washington D.C., and the various bills that were being discussed in the house or senate.

For me, especially in the last 3-6 months, one of the greatest concerns I have is the increased rhetoric that is coming out of the U.S. (on both sides of the aisle), and this will surely continue for the next 16 months until the 2008 Presidential election.

And as it turns out… I am not the only one who is following this…..

Yesterday, I received an email from Joanna Klonsky of the Council on Foreign Relations letting me know they had released a report detailing how 2008 Presidential candidates viewed China entitled The Candidates on U.S. Policy toward China

Through a couple paragraphs on each candidate (7 donkeys and 11 elephants), she does an excellent job of setting the tone for many of the candidates, and the reader can also click through to a number of speeches or papers to learn more.

Joseph R. Biden

Sen. Biden (D-DE) subscribes to the view that the U.S. should attempt to engage and guide China. In a 2001 speech before the Asia Pacific Council of the American Chambers of Commerce, Biden said, “Our top priority should remain integrating China into the community of nations, articulating the rules of the road, and then holding the Chinese government accountable for its actions.” In 2000, Biden voted for the U.S.-China Trade Relations Act, which normalized trade relations with China.

John McCain

Sen. McCain (R-AZ) has supported a U.S. policy that will “hedge” against China’s growing global influence. “That doesn’t imply an effort to oppose China’s emergence as an influential power, but it does mean maintaining our military presence in East Asia, strengthening our alliance with Japan and our relations with other Asian countries, and working through groups like the APEC forum to further American interests and values,” McCain said in a 2005 speech to the Committee of 100, a nonpartisan organization of Chinese Americans.

In 2000, McCain voted for the U.S.-China Trade Relations Act.

To be honest, some of these candidates scare me (the two above are both on the moderate side), and I am only hopeful as the scariest of them are also the most unlikely to be elected.

There are few issues or relationships more important that China, and regardless of their political affiliation, it will be important for them to understand the issues surrounding China (economic and political) and manage the relationship properly.

Otherwise.. I will be out of a job… and Wal-Mart is going to have to find another country to buy their $18 billion worth of goods (9 billion directly.. $9 billion indirectly according to Forbes article Union Attacks Wal-Mart on China Goods)

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2 Responses to “The Candidates on U.S. Policy toward China”

  1. Jeff G Deutsch says:

    June 9th, 2007 at 8:05 pm

    I REALLY dug that CFR article too, and did a quick and dirty statistical map of each candidate’s China compass here. By my calculations, the Dems are much more China-friendly, though some candidates (particularly Dennis Kucinich and Sam Brownback) would be very bad news for the PRC. The GOP is much more anti-China, especially Tom Tancredo and Duncan Hunter. Rudy Giuliani is the most pro-China candidate.

    Jeff G Deutsch

  2. rbrubaker says:

    June 10th, 2007 at 8:40 am

    Hi Jeff,

    Thanks for checking in.

    CFR did a great job with this, and I hope you (and others) will continue to track the candidates.

    Right now, I am unsure of where any of them stand, but I am concerned about negative sentiment on both sides of the aisles. I have yet to meet many politicians on their tours that have a strong knowledge of China, the core issues, or what the consequences might be should they take certain actions (like – what would happen to retail prices in WalMart, Home Depot, and Target if a 27% tax on Chinese goods were passed…

    I am interested in knowing your opinions on Rudy vs. McCain. My impressions were that both were more on the pro-China relationship side, but I have not seen much (Rudy’s previous position did not really lend him to much history) to really indicate much.

    Anyone have a guess as to if and when the candidates will begin making trips here?