Romney's China Blunder

Mitt Romney appears to be a  businessman who talks like a Michigan Democrat.  Does he really have the answers?
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From the Wall Street Journal:

"Declaring Beijing a 'currency manipulator' is likely to backfire

At a recent Republican Presidential debate, Jon Huntsman slammed Mitt Romney's promise to designate China as a "currency manipulator" and impose trade sanctions if he is elected. "Mitt," the former U.S. ambassador to China said, "now is not the time, in a recession, to enter a trade war."

Well put. The President of the United States has a responsibility to lead on trade issues, and by extension so do serious aspirants to the office....

Mr. Romney's economic platform, unveiled this month, was marred by a crude assessment of the economic relationship with China as one-sided and harmful to the U.S....


Let's start with the simplistic logic that running a trade deficit is prima facie evidence that the U.S. is losing out. Much of the U.S. deficit with China is composed of intra-company trade conducted by U.S. firms. They outsource their parts and goods pipelines to stay globally competitive.

Using bilateral figures is especially misleading in China's case, since many Chinese factories do the final assembly of products made from imported parts. Chinese companies add little value; it is often Japanese, Korean and Taiwanese suppliers that profit most....


The real problem is China's refusal, largely for political reasons, to liberalize its financial system and allow the free flow of capital....

Especially in bad economic times ... the easiest path for Congressmen is always to vote for special or regional interests. Serious Presidential candidates have to protect the national interest."

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Link: http://online.wsj.com/article/SB10001424053111904836104576558090193802586.html?mod=WSJ_Opinion_LEADTop