An Op-Ed from Bloomberg News aggregates some of China’s Netizens’ reaction to the U.S. Currency Exchange Rate Oversight Reform Act. The commentary ranges from uncertainty to warnings of the macroeconomic implications of the bill.
While the Beijing papers worry about macro-economic and political consequences of the yuan’s possible revaluation, media in other, more economically dynamic regions of the country are concerned with the more immediate impact it would have on pocketbooks. On Oct. 17, Chen Xu, a columnist with Shanghai’s independent Oriental Morning Post, wrote that even though domestic politics are behind the U.S. push for currency revaluation:
It is impossible for the Beijing government to succumb to the external political pressure to appreciate the RMB and thereby harm their own export industry in the current global economic turbulence.
The editorial is mostly polite, until the end, when he sharply noted: “Beijing isn’t interested in the attitudes of Americans regarding this issue.”
That last point is almost certainly a blustery overstatement, and the proof is in the English: More than any other important Sino-U.S. issue in recent memory, China’s English-language newspapers have commissioned and translated currency-related editorials that speak directly to American audiences. Take, for example, a prickly editorial by Tao Wenzhao, a senior researcher with the Center for U.S.-China Relations at Beijing’s elite Tsinghua University. Hewrote:
Economic globalization has expedited international competition, as well as industrial structural adjustments in the U.S. Labor-intensive industries have become “sunset industries,” and the U.S. is outsourcing its manufacturing to other countries, including China.
We are never going to get those labor-intensive assembly jobs back from China — the wage differentials are far too great, no matter how much China revalues its currency. We need to focus on multiplying more people at the high-value ideation and orchestration end of the supply chain, and in the manufacturing processes where one person can be highly productive, and well paid, by operating multiple machines. We need to focus on “Imagined in America” and “Orchestrated From America” and “Made in America by a smart worker using a phalanx of smarter robots.” In total value terms, America still manufactures almost as much as China. We just do it with far fewer people, which is why we need more start-ups.
But we also need to stop thinking that a middle class can be sustained only by factory jobs. Thirty years ago, Hong Kong was a manufacturing center. Now its economy is 97 percent services. It has adjusted so well that this year the Hong Kong government is giving a bonus of $775 to each of its residents. One reason is that Hong Kong has transformed itself into a huge tourist center that last year received 36 million visitors — 23 million from China. Their hotel stays, dining and jewelry purchases are driving prosperity here. The U.S. Commerce Department says 801,000 Mainland Chinese visited the U.S. last year, adding $5 billion to the U.S. economy. More Chinese want to come, but, for security reasons, visas are hard to obtain. If we let in as many Chinese tourists as Hong Kong, it would inject more than $115 billion into what is a highly unionized U.S. hotel, restaurant, gaming and tourism industry.
Another idea officials here offer is that the United States invites Chinese firms to invest in toll bridges, toll roads, and rail systems across the United States, in partnership with American companies. They could build them, and operate them for a set number of years, until their investment pays out, and then transfer them to full U.S. ownership. It may be the only way we can rebuild our infrastructure.