“On Day One, I’ll declare China a currency manipulator,” Republican candidate Mitt Romney says in stump speeches in Ohio and other industrial states, part of a pledge to “crack down” on tactics that he says improperly draw away U.S. technology, ideas and jobs.
And President Obama has been hammering Romney’s investments in China through the private-equity firm Bain Capital, a record that he says belies the Republican candidate’s severe-sounding approach. “Governor, you’re the last person who is going to get tough on China,” Obama said in the CNN-sponsored televised debate last week.
In contrast, Obama emphasizes his supposedly more rigorous approach. “We have brought more trade cases against China in one term than the previous administration did in two,” he says.
Despite the heated rhetoric, an examination of the record of the two candidates shows that both are centrists on trade with a reluctance to dramatically change the trajectory of U.S.-China relations.
Obama has talked tough on China before, but his record in office does not impress advocates of a crackdown.
In the 2008 presidential campaign Obama vowed, as Romney does today, to adopt a hard line on Chinese currency manipulation. But once in office, he never did, preferring a negotiated response that he says has been effective.
“That’s a weak point for Obama. He should have been more active,” said Thea Lee, chief international economist at the AFL-CIO.
Others concerned about offshore job migration recall that Obama also pledged in 2008 to cut tax incentives for companies moving jobs overseas but did not reach the goal.
“After being elected, Obama had a big majority in both chambers [of Congress] and huge public opinion approval, yet he didn’t get it done,” said Ron Hira, a professor at the Rochester Institute of Technology who tracks the movement of U.S. jobs offshore.
Romney has experience with investment in China and other countries, but he doesn’t talk about it much on the stump. As the Obama campaign has frequently noted, Bain Capital has had a stake in companies engaged in some of the very practices Romney now decries.
Romney’s relationship with China is complicated. But it is perhaps brought into sharpest relief by looking back to 1998, when several Bain Capital entities under his control made a passive investment in a Chinese manufacturing firm, Global Tech Appliances.
During the 1990s, Global Tech was manufacturing bread-makers and other kitchen appliances for Sunbeam, an American company that had begun laying off North American factory workers.
An early 1998 prospectus from Global Tech described six-day-a-week production at its plants in China and noted the growing international trend toward outsourcing. The prospectus said that well-equipped Chinese factories “along with the use of inexpensive labor enables the Company to efficiently produce” goods for brand-name manufacturers in the West that are “increasingly outsourcing product development and manufacturing.”