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The world looks to Obama - Part II

By Mary Kay Magistad - posted Tuesday, 11 November 2008

Many Chinese cheered along with the rest of the world when Barack Obama became the first African-American to be elected president.

“This really makes history,” said Li Bo, a software consultant, at a jubilant American Chamber of Commerce election party in a Beijing hotel. “I’m proud for America. I’m proud for the American people’s choice.”

And that’s despite the fact that Li was wearing a McCain sticker and voted for John McCain in the mock election at this party, which Obama won handily. Li said his preference for McCain was because Obama had been making protectionist noises in the final weeks of the campaign.


Obama did say in a letter to the National Council of Textile Organizations that he will “use all diplomatic means at my disposal” to get China to stop artificially keeping its currency cheap and relying so heavily on exports to feed its economic growth.

Chinese Foreign Ministry spokesperson Jiang Yu said in response, “The renminbi exchange rate is not the fundamental cause of the deficit in China-US trade. We’re willing to appropriately handle problems in China-US trade on a basis of equal, friendly consultation.”

This is a polite but firm message that China will not tolerate being bullied, especially not in the middle of a global economic downturn where China’s still robust growth may prove indispensible in helping other major economies out of a recessionary rut. Previous US presidents learned the hard way that going head to head with China before first building a constructive, multifaceted relationship, is a recipe for frustration.

President Bill Clinton started his presidency promising to get tough with China on human rights. After that it led to Secretary of State Warren Christopher getting a humiliating cold shoulder during a visit to Beijing; the Clinton administration delinked trade and human rights, and learned to manage the relationship on multiple levels.

President George W. Bush started out calling China a “strategic competitor” and viewing it as a threat. But after the 9-11 attacks, China suddenly became a US ally in the “war on terror” and helped bring North Korea to the negotiating table about its nuclear program.

Former Hong Kong governor Chris Patten had his own rough patches, learning how to work constructively with China’s leaders. On a recent book tour to Beijing, he offered this advice to the next US president:


“I think the most important message for a new US president to give to his opposite numbers is that he’s going to place the relationship with China at the heart of US foreign policy, and he’s going to resist pressures to become protectionist. It will get him off on the right footing, and it will also be the right thing to do.”

Slapping steep tariffs on Chinese exports certainly won’t win the Obama administration friends in southern China’s factory belt, where laid-off factory workers already blame recession-hit American consumers for no longer keeping up their end of the unspoken deal - buying lots of cheap Chinese-manufactured goods so China’s factories can run and pay their workers.

Eddie Leung, president of the Association of Foreign Invested Enterprises in Dongguan, has said 20 per cent of the 45,000 factories in Guangzhou, Dongguan and Shenzhen could close within the next couple of months, taking some 2.7 million jobs with them.

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Reprinted with permission from YaleGlobal Online - - (c) 2008 Yale Center for the Study of Globalization.

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About the Author

Mary Kay Magistad covers Northeast Asia for The World.

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