In the first presidential debate of 2012, Mitt Romney delivered a stinging blow against President Obama and his domestic policies:
“What things would I cut from spending? Well, first of all, I will eliminate all programs by this test, if they don’t pass it: Is the program so critical it’s worth borrowing money from China to pay for it? And if not, I’ll get rid of it.”
In this one piece of grandstanding Romney deftly combined fears of inefficient big government with a broader anxiety about the power of China, portraying Obama as not only inadequate as a governmental leader, but as accidentally empowering Beijing from federal incompetence.
The Sino-American relationship is fascinating. Over the past century it has undergone profound change, filtering into the internal debates of the United States. China has been perceived as friend, foe, and various shades in-between.
In the nineteenth century China was little mentioned in the United States. Popular American interest in China was largely confined to immigration scares in California. Instead, American focus was on Japan, which was rapidly modernising after the Meiji Restoration, poised to become a powerful economic and military ally in the Far East.
However, the United States and European powers had identified the lucrative economic potential of the immense population within China. China was the ‘sleeping giant’ of Asia: a potentially huge market for goods and investment, but unmistakeably backward and difficult to access.The British had even fought two wars to continue the trade of opium to addicted Chinese customers.
However, access to the China market was by no means ensured, threatened by the Japanese, rival powers, and Chinese Communists.
The ‘loss of China’ in 1949 to Chairman Mao’s Communists ushered in an entirely new period of US-China relations. Ideologically opposed to the U.S., Beijing and Moscow were portrayed as the great enemies of the Cold War, though a brief period of detente under President Nixon in the 1970s sought to drive a wedge between their relationship.
The market-friendly reforms of Deng Xiaoping in the 1980s were welcomed by the West as an indication that communism itself was a flawed and broken system, later validated by the dissolution of the Soviet Union.
Since then, however, the China Conundrum has developed.
China: Friend or Foe?
In essence, Washington’s embrace of a reformed China, engaged in international capitalism and receiving American goods, has been replaced with a budding fear over the power of the Middle Kingdom. Yet at the same time, American economic growth is pinned to the Chinese economy.
In the past decade American power has come under increased scrutiny. Political commentators speculate that the unrivalled position of the United States is waning, and that we are entering a period of relative decline whereby American authority will be compromised by new powers.
China is frequently the subject of such speculation, with a massive population of 1.3 billion, the second highest defence spending in the world, and, most importantly, an economy that rivals the size of the U.S.
It is this economic muscle that makes China so intriguing. Countries across Africa, Asia and Latin America are taking in massive amounts of Chinese investment, jumping onto the Beijing bandwagon that had, until only recently, been achieving staggeringly high growth rates of 10% per annum.
The United States is also tied up with Chinese investment and commerce. While Republicans warn of over reliance on Chinese businesses, the American economy is heavily reliant on a healthy, prosperous Chinese market. American businesses seek new opportunities throughout China, and western stock markets are virtually bound to Chinese vitality.
Romney’s quip in 2012 also hinted towards the concern around Chinese credit. Some within the Republican Party believe it to be a fundamental indictment against the U.S. political economy if American lawmakers are compelled to borrow money from Beijing.
The recent stock market plunge in China charged the issue with even greater urgency. Prominent political figures in the U.S. have frequently blamed China for currency manipulation and indulged in a paranoia concerning Chinese investment. Donald Trump, in particular, has emphasised that he would be ‘tough’ on the Chinese in trade negotiations and security matters:
“Oh, would China be in trouble. The poor Chinese”
Yet the drops in the Shanghai Index this summer have also sparked fears of a new global recession.
This is the uncomfortable truth of the current international, often-interdependent financial system. In the years to come, American politicians must find effective language to resolve the China conundrum, and decide whether this Asian economic power is friend, or foe.