Why We Shouldn’t Bash China

It is election season, which means China bashing is now in the headlines. After all, nothing motivates like fear. But, before we declare China the economic bogeyman, let’s consider the threats many believe they present.

1.China has become an economic rival. Consider Chinese brands. How many Chinese brands can you name? Of these, how many are in your home? While it is true many consumer products are made in China, most of these products were innovated and developed in the US. China’s inability to innovate will keep it from ever being a true rival. China has kept prices low which has been good for the US consumer.

2.China manipulates its currency to keep the yuan low. While there were headlines in August that China devalued the yuan by 2 percent, there has been very little reporting of China’s efforts all this month to raise the value of its currency. China has tapped into its huge foreign currency reserves to the tune of $40 billion to keep the value of the yuan from dropping further. Moreover, the the yuan’s value in the past 10 years has actually increased nearly 25 percent.

3.China Steals Jobs. There is no doubt China has become the world’s factory floor. However, the door to the factory is beginning to shut. China loses about 2 million workers a year. According to the IMF, China will experience labor shortages by 2025. Unless productivity increase significantly, China will not be competitive.

China, which imports $150 billion worth of goods making it the US's third largest customer, should really be treated as a partner and not a rival. There is so much to gain. As the Chinese economy grows. so does its appetite for technology. Just last week, China agreed to buy 300 jets from Boeing. On the other side of the coin, low cost production in China helps keep inflation in check. Plus, low prices for consumer items means more disposable income to purchase bigger ticket items produced in the US. And for entrepreneurs, working with China reduces barriers to innovation as new products can be quickly developed with very little investment.

As we mark the end of Chinese President Xi Jinping's first state visit to the U.S. -- a visit many describe as sending positive signals that the two countries will strengthen cooperation and pledge to work jointly with challenges -- we should keep in mind the benefits of a fruitful relationship with the Asian nation. This might be hard as the campaign season drags on, new players hit the political stage, and both parties pull out familiar attacks on China to make headlines. But in the cold light of day, if we take a minute to think objectively and look at the facts, there are many reasons why a world with the U.S. and China as partners, not rivals, is the best possible scenario.