Obama, McCain lambast China — for now

China is also helping finance the U.S. budget deficit, holding US$491 billion in Treasury securities as of the end of March, second only to Japan. That compares with US$60 billion at the end of 2000.

Diplomatically, it has played a role in negotiations aimed at persuading North Korea to give up its nuclear weapons program. The U.S. has also sought Chinese support for stronger sanctions on Iran in the United Nations Security Council.

The China issue didn’t loom large on the 2008 campaign trail until the April 22 Pennsylvania primary. That’s when the United Steelworkers union and steel manufacturers worked to focus attention on trade complaints against China — and Democratic contenders Obama and Clinton responded.

Clinton, 60, a New York senator, says that as president she would formally label China a currency manipulator because it has kept the yuan artificially low in value against the dollar, making its exports to the U.S. cheaper. “I will get tough on China,” she said on April 16.

Obama, 46, accuses China of tilting the playing field by dumping products in the U.S., violating intellectual property rights and “grossly undervaluing” its currency.

“We need to finally confront the issue of trade with China,” the Illinois senator said on April 14. “Trade with China will only be good for you if China itself plays by the rules.”

While all three candidates have taken a break from their criticisms of China to issue statements of sympathy for victims of last week’s earthquake, the respite isn’t likely to last.

Both Democratic candidates have endorsed legislation that would make it easier for U.S. companies to seek higher import duties on Chinese products in compensation for its undervalued currency. They also call for greater scrutiny of sovereign-wealth funds, pools of government-controlled money that invest in companies. The US$200 billion China Investment Corp. last year bought stakes in Morgan Stanley and Blackstone Group LP.

And they question whether Bush should attend the opening ceremony of the Beijing Olympics in August in light of China’s human-rights violations in Tibet and support for a Sudanese government accused of committing genocide in Darfur.

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