HEMPSTEAD, NY - OCTOBER 16: Republican presidential candidate Mitt Romney (R) speaks as U.S. President Barack Obama answers a question during a town hall style debate at Hofstra University October 16, 2012 in Hempstead, New York. During the second of three presidential debates, the candidates fielded questions from audience members on a wide variety of issues. (Photo by John Moore/Getty Images) (John Moore/GETTY IMAGES)

While President Obama and Mitt Romney both agreed during the second 2012 presidential debate that China doesn’t play by the rules in international trade, the candidates spent a considerable amount of time arguing about who would be tougher on China if elected president in November.

Zachary A. Goldfarb discussed what tough talk on China really means:

Both Romney and Obama say that China doesn’t play by the rules in international trade. Romney says he will declare China a currency manipulator – potentially leading to tariffs – while Obama says he has filed cases against China for unfair trade practices. Obama has declined to declare China a currency manipulator.

The back-and-forth is to be expected. Presidential candidates – including Obama in 2008 — have long sought to win votes by attacking China as a bogeyman and blaming the country for the United States’ economic woes. There is plenty of evidence that China has not played by the rules, but presidents – including Obama and George W. Bush – tend to take a far more diplomatic line when they’re elected. Obama has filed a large number of trade cases against China, but he has been pretty politic about it.

Romney has promised to go after China on his first day in office, but there’s reason to believe he would hold off.

During the debate, President Obama and Romney accused each other of “investments in China.” Fact Checker Glenn Kessler said both candidates may be right:

President Obama declared that Mitt Romney was “the last person who is going to get tough with China.” He cited Romney investments in Chinese companies some of which were “pioneers” in outsourcing and in another that engaged in surveillance of Chinese citizens. Romney acknowledged holding some investments in China, but pointed out that these have been managed by a blind trust for the past eight years.

He said Obama, through his pension fund, also has “investments in China.” Bain Capital, the private equity firm Romney founded, did invest in firms that specialized in outsourcing during the years Romney ran the private equity firm...

In addition, Romney has a stake in a Bain investment fund that owns Uniview Technologies, a Chinese firm that produces “infra-red” cameras and surveillance gear. That investment did not occur until late 2011, long after Romney left Bain Capital. Obama deflected questions about his own investments in China with a joke. But independent reports have shown Obama holds shares in mutual funds that invest in Apple, Wal-Mart and other U.S. firms with operations in China.

However, Goldfarb reports that despite the political rhetoric, the United States is actually becoming less reliant on China to fund its budget hole over the past two years:

An enduring meme of the 2012 political campaign — and the battle over the ballooning federal debt in Washington — is that the government increasingly needs China to lend it money to meet its obligations.

But new data released Tuesday showed that taxpayers owe China 10 percent less than they did a year ago, even though the federal government has continued to borrow huge amounts of money overall. China also owns a smaller percentage of the U.S. debt than in the past, with the slack picked up by other countries such as Japan, as well as American investors.


- Wonkbook: Everything you need to know about the second presidential debate

- Say what: Dissecting their statements

- Fact Checker: Which four-Pinocchios claim resurfaced again?

- Live Q&A, Wednesday at Noon ET: Who won the debate?