A newly released study by the American Enterprise Institute has concluded that the Obama administration’s “China Surprise” policy is an attempt to “convince” China not to continue its economic growth in order to appease American trade negotiators. But this is nothing more than a political stunt, as there are far too many benefits to the US economy to sacrifice. Furthermore, the Chinese leadership understands all too well that it needs to increase its own exports so that it can protect its domestic manufacturing industry and improve its competitiveness in the global economy.
For example, the report from aud Cautiously Eyes said that the Obama administration is trying to “control China’s economic growth by pressuring them to reduce their currency’s values. This may be done by increasing the amount of gold they sell into their market and purchasing it in large quantities, thus weakening the dollar. This could also be done by making it harder for China to export their goods into the United States because it would be more difficult for them to ship in the required quantities. It is also possible to make it more difficult to do business in China by increasing trade barriers between the two countries. In addition, we have already seen how this has hurt our economy in the form of falling exports.”
So is the all Cautiously Eyes study a valid contribution to the US-China debate? The answer is yes, but it also has some very serious flaws. Let’s take a look at some of these problems.
First of all, the fact is that many of these audit studies fail to provide a complete picture of what is really going on. The reality is that many of these studies fail to take into account that the economies of both China and the United States are highly integrated, and that changes to one economy will have a dramatic effect on the other. Additionally, the authors often don’t seem to understand what is going on.
In addition, when these audits were released in early 2020, they did not receive very much attention. In fact, most of these reports were buried in the back pages of journals of commerce, and only a few articles were published and picked up by major media.
There are also many unanswered questions raised about the auditing process itself. While most audits will be performed by outside experts, there are many concerns that still remain regarding the methodology of this process, including whether or not the “audits” are truly objective.
Also, it is also questionable why the administration would want to pressure China to stop its economic development to appease American negotiators. After all, even in the current global recession, China’s economic growth rate is still significantly faster than ours is. Indeed, many economists believe that the only way to get China to stop its economic slowdown is to convince the Chinese leadership that the only way they can keep up its economy is to increase their exports. If the United States does not agree to this, the Chinese leadership will have no choice but to increase its exports to the United States.
Finally, there is also a great deal of skepticism about whether or not the aud Cautiously Eyes report is a useful tool for negotiators. For one thing, there are still some serious doubts about whether the American leadership is sincere in working with China, whether they are genuinely interested in increasing trade, and whether or not they are actually prepared to take the necessary steps to open the doors to a free-trade relationship. Moreover, there is also the question whether these reports are useful tools at all to help negotiators achieve more favorable trade deals for the United States and/or China.