China could bring us together

GUESTWORK | Nick Capo

Many of our political leaders are acting like children playing with fire. A more incendiary simile might compare them to children playing in a sandbox with no minds focused on the future.

Pick your problem – unemployment, global warming, debt, the looming revenue shortfall for entitlement programs, trade with China – and you can find any number of commentators, experts, or concerned citizens offering smart solutions. Unfortunately, you also find too many political leaders pandering for votes.

After visiting China in early June, I began to research one problem – U.S. trade relations with China – and to read about the Chinese Communist Party (CCP), the world’s largest political party in the world’s largest authoritarian country. The more I learn, the more I worry.

Witnessing the World Expo in Shanghai confirmed my belief that China’s rise is real and that rumors of its impending demise are sadly misinformed. The CCP now numbers at least 78 million members and is growing at a rate of about two million members per year. Many new members are college graduates or wealthy entrepreneurs. In size, the CCP already equals our entire Baby Boomer generation.

Richard McGregor, in his book, The Party, makes an important point: “China will destabilize the world not only if it fails but if it succeeds as well. . . . The rest of the world will have to adjust and compete.”

The U.S. House of Representatives and Illinois Democrat Alexi Giannoulias are playing with fire in risking a trade war by supporting sanctions to combat China’s currency manipulation. We have tried this strategy before – against China about five years ago, against Japan in the 1980s. It simply does not work. But at least these leaders are grappling with a real problem. According to the Economic Policy Institute, Illinois lost 105,500 jobs from 2001 to 2008, solely due to the effects of trade with China.

Mark Kirk’s support for the tired probusiness argument, though, is questionable, even glib. China still is not democratizing after three decades of increasing business openness. Yes, Illinois exported $2.47 billion in goods and commodities to China in 2009, up from 1.52 billion in 2006. But Illinois imported $17.84 billion from China in 2009, according to the U. S. Census Bureau.

I am looking at the statistic that Illinois imported $2.12 billion from other countries in one category – “television camera, digitl camra & vid cam recorder.” How many of those purchases were manufactured in China and charged to credit cards?

We desperately need our political leaders to tell us that our problems have less to do with China than with our internal failures. Because of our failure to adopt wise wage and tax policies, too much of the average American’s standard of living (cheap clothing, cheap electronics, and so on) is tied directly to China, and many large countries (Germany, the European Union, Japan, Brazil, India, most of the African nations) might side with China in a trade war. It is too late now to put the global-trade genie back in the bottle.

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