Why China wasn’t a campaign issue

This reflects the growing maturity of the Sino-American relationship as well as the fact that both candidates appreciate the value of America’s relationship with China.

Now, with the United States mired in an economic collapse brought on by the securitization of subprime mortgages — otherwise known as “toxic securities” exported to the rest of the world — Beijing’s value to Washington is likely to trump other issues, such as human rights, religious freedom and Tibet.

Recently, China — holding 10 percent of U.S. Treasury notes — surpassed Japan as America’s largest creditor. And Washington clearly wants China to continue to lend it money as the United States tries to spend its way out of recession, to the tune of hundreds of billions if not trillions of dollars.

The question is whether Beijing will be willing to play this role. China realizes that it is in its interests to help bring the United States, but Beijing faces severe economic challenges of its own. It, too, has announced a massive fiscal package and has made it clear that its main contribution to the global crisis is to keep its own economy growing.

During the campaign, Obama did say that he would keep Chinese toys out of the country. He also urged Bush to boycott the opening ceremony of the Olympics. But these issues are unlikely to emerge again in any serious way.

But he said more than once that, as president, he would press China to revalue its currency so as to level the playing field. Last month, in a letter to the National Council on Textile Organizations, he again accused China of “manipulation of its currency’s value” and said that the country had to change its foreign exchange policies. He promised to “use all diplomatic means at my disposal to induce China to make these changes.”

This is an issue that will emerge again. But with thousands of factories shutting down in China, throwing millions of people out of work, it is unlikely that Beijing will agree to reduce its exports by raising the value of its currency. Pressure from Obama is unlikely to yield positive results. But Obama in the letter limited himself to “all diplomatic means.” He did not say that he would seek to impose tariffs on Chinese goods if Beijing refuses to comply. So he may have left himself enough wriggle room.

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