Below are some campaign quotes from Mitt Romney on China. He has labelled China an oppressor of human rights, a flagrant violator of intellectual property rights, an aggressive promoter of cyber espionage, and worst of all for China, a currency manipulator.
1. “We face another continuing challenge in a rising China. China is attentive to the interests of its government – but it too often disregards the rights of its people. It is selective in the freedoms it allows; and, as with its one-child policy, it can be ruthless in crushing the freedoms it denies. In conducting trade with America, it permits flagrant patent and copyright violations … forestalls American businesses from competing in its market … and manipulates its currency to obtain unfair advantage. It is in our mutual interest for China to be a partner for a stable and secure world, and we welcome its participation in trade. But the cheating must finally be brought to a stop. President Obama hasn’t done it and won’t do it. I will.”
2. “My own view on the relationship with China is this, which is that China is stealing our intellectual property, our patents, our designs, our know-how, our brand names. They’re hacking into our computers, stealing information from not only corporate computers but from government computers. And they’re manipulating their currency. And if I’m president of the United States, I’m not going to continue to talk about how important China is and how we have to get along. And I believe those things. They’re very important. And we do have to get along. But I’m also going to tell the Chinese it’s time to stop. You have to play by the rules. I will not let you kill American jobs any longer.”
Beijing clearly understands that at least some of this language is just campaign rhetoric. But the nation simply can not afford to take a chance. The formal label of “currency manipulator” carries with it the imposition of tariffs. And tariffs on Chinese goods, unlikely even under Romney as president, would launch an unprecedented trade war that could devastate China’s already slowing economy. Beijing has to nip this in the bud and to lessen one of Romney’s key campaign issues – in some ways weakening the candidacy. The best way of avoiding being called a currency manipulator of course is to strengthen the yuan. And that’s exactly what China has been doing in the last couple of months.
CNBC: – Harsh words from Republican candidate Mitt Romney about branding China a currency manipulator if he’s elected president next month is politics, but the rhetoric may well encourage Beijing to keep nudging its currency higher in the weeks ahead to avoid being at the centre of the U.S. election debate, analysts say.
Clearly the ECB-propped stabilisation of the crisis in the Eurozone also allowed Beijing to strengthen the currency, but the aggressive appreciation in recent weeks is to a great extent due to the US election. China needs President Obama to be reelected, and this currency adjustment certainly gives him additional ammunition in the campaign.
CNBC: – “There’s no doubt that the more aggressive stance taken by Romney will raise eyebrows in Beijing,” said Mitul Kotecha, head of global currency research at Credit Agricole in Hong Kong. “The strengthening in the yuan is not all related to the election but it is not a coincidence that the U.S. election is looming and the yuan’s fixing is higher.”
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