Forget the furor over China trade and Ralph Lauren’s outsourcing of U.S. Olympic uniforms to the Asian nation. A former top Bush official wants the U.S. to put out the welcome mat to the world’s second-largest economy.
Despite heated anti-China rhetoric in the Washington and on the campaign trail, policy leaders led by ex-Treasury Secretary Hank Paulson are building a campaign to let Beijing invest in the United States just like Japan has done. The reason: They’re going to take their money someplace and “it’s in our best interests to capture our share,” according to Paulson.
The former Bush-era Treasury boss said Washington should “welcome” Chinese investments because it would expand jobs and ease growing suspicions between the two nations. In an address to the Atlantic Council Tuesday, he said that Chinese investments overseas have produced 5.6 million jobs, but the U.S. has grabbed only 4,000 of them.
His call is part of a broader Atlantic Council effort to draw up a new international agenda for President Obama’s second term or Mitt Romney’s first. Several other policy leaders have offered their plans to Atlantic.
But Paulson’s call to open the floodgates to Chinese investment comes at a time when anti-China sentiment is high in the U.S., as evidenced by Senate Majority Leader Harry Reid’s angry call last week to burn U.S. Olympic uniforms because they were made in China.
In fact, two Chinese reporters quizzed Paulson on the anti-Chinese rhetoric in Washington and he said that it was an unfortunate issue that plays well with voters. “People respond positively to it,” he said. But he added that once the campaign is over, the nationalism should end.
Pushing to let China invest in the U.S. wasn’t the only controversial suggestion Paulson made. His key points offered as advice to whoever wins the presidency:
Unlock the promise of capital and cross-investment by assuring greater openness to Chinese investment in the United States. This means China needs to pursue a market-determined currency that will better position it to respond to the current crisis, while preventing its own crisis down the road.
Assure financial markets that are transparent and have strong oversight by correcting flawed practices on both sides of the Pacific that have led to massive producer and consumer debt.
Work to strengthen market confidence in our economies, which, for the United States, means overcoming the markets’ lack of confidence in government’s ability to take the necessary steps to protect the US economy; and for China, it means overcoming a lack of transparency.
Free up bilateral trade and grant China market economy status on a sector by sector basis.
Help technology flow more efficiently and promote innovation by reforming the United States’ outdated export control system while still assuring national security.
