It’s ironic that, in his acceptance speech for the Republican Party’s nomination for the United States presidency, Mitt Romney berated America for borrowing “a trillion dollars from China” exactly one day after Chinese premier Wen Jiabao told a gleeful German chancellor Angela Merkel that Beijing is willing to buy European sovereign bonds.
The difference of perception on China’s role in supporting the European and American economies is stark: one views China as a financial buoy at a time when European central banks have limited liquidity, and the other needs China as a scaremongering tool to drum up votes.
China may fit into both these roesl, but it’s obvious that one relationship is more fruitful than the other. And if Romney is concerned about making friends globally - which he ought to be given that he wants to be president of the free world - he should consider lightening up on the rhetoric because he’s not doing himself any favours abroad.
“You might have asked yourselves if these last years were really the America we want, the America that was won for us by the greatest generation. Does the America we want borrow a trillion dollars from China?” asked Romney on Thursday (August 30).
That’s not only insulting to China, which has been buying American Treasuries with America’s blessing and vice versa, but it’s insulting to eurozone leaders who need this support. What they don’t need is Mitt Romney’s high-handed comments.
But while Romney was busy dishing out scorn, premier Wen did what he could to assert China’s support for Europe at a time when the continent is spiralling further into debt.
“China is willing, on condition of fully evaluating the risks, to continue to invest in the eurozone sovereign debt market, and strengthen communication and discussion with the European Union, the European Central Bank, the [International Monetary Fund] and other key countries to support the indebted euro zone countries in overcoming hardships," he said following his rendez-vous with Merkel.
It’s true that the Republican National Convention isn’t the venue to make sweeping statements about the state of global affairs, but Romney couldn’t have gotten his timing more wrong. And after his botched goodwill tour across Europe (in which he insulted the UK at their Olympic preparations and offended Palestinians on their economic shortcomings, while his aide told reports in Poland to “kiss my ass”) it would be best that he doesn’t put salt on an open wound.
Romney’s entire campaign platform is based on his experience as a businessman, and right now it’s the Chinese that are looking pretty good at his own game.
It’s no secret that eurozone bonds are a precarious investment – precarious enough that sovereign wealth fund China Investment Corp. (CIC) backed away from European sovereign bonds earlier this year – but Wen tempered his promises, saying that Beijing would assess the risk before buying bonds. But his gesture still went far to show his support for the continent.
What Romney should learn from China is that diplomacy, just like business, is not always about the short-term gains: in the short term, China’s investments into eurobonds could be a bad bet. In the long term, China gains a powerful political ally in Europe.
For Romney, picking on China in the short term results in votes. In the long term, China will be more at odds with the US. That is a risk that America cannot afford.
It’s time that Romney takes a step back at the bigger picture, which is something that China apparently understands.