During Tuesday night’s presidential debate, Mitt Romney brought up economic issues related to China multiple times. Writing for The New Republic, John B. Judis looked into the seriousness of Romney’s claims. Judis concluded that “not only is Romney exaggerating the China threat, but he’s doing so at the expense of more, or equally, pressing economic and social issues.”
According to Judis, a number of other issues affect China’s economic advantages over America. Cost of production is much lower for one. Also, its location within the “Asian high-tech hub” of countries manufacturing high-demand electronics like iPhones. Lastly, China is able to respond to market demands and start producing new models of electronics.
Even with wages rising, China is still able to keep contracts with major American countries that hired or outsourced work to China. Other companies have chosen to return manufacturing work to America; it offsets higher labor costs by saving on transportation and energy costs.
So is China so looming a problem as it’s been made out to be? Not exactly – or at least not for sure. I hope Judis is right in hypothesizing that “today’s debate over China’s currency manipulation may, too, be occurring just as the problem it is addressing has quietly begun to be solved.”