With a GOP-led House likely to push spending cuts, he sees China as a good rallying issue for U.S. spending policy
President Barack Obama left the Group of 20 summit in Seoul without persuading China to let its currency float more freely or take steps to trim its trade surplus. However, in recent months, Obama has been citing China more as a model than a threat. It turns out that the high-speed Chinese economy is a good foil for a politically challenged President.
Whether the subject is education, infrastructure, clean energy, or high tech, Obama often points to China's investments and warns that the U.S. must do the same or fall behind. "We should be able to agree now that it makes no sense for China to have better rail systems than us," Obama said at a news conference the day after the midterm elections. "And we just learned that China now has the fastest supercomputer on earth. That used to be us." In an Oct. 26 address to Democratic donors in Rhode Island, the President criticized Republican budget plans that he said would cut federal education funding by 20 percent. "Do you think China is cutting it by 20 percent?" he asked. "They're playing for first place, and we need to play for first place." Charles Freeman, a China specialist at the Center for Strategic and International Studies, says the Administration recognizes the value "of a near-peer competitor, both for domestic purposes and to focus foreign policy."
Obama and Chinese President Hu Jintao met face- to-face for the seventh time at the G-20 confab. They next meet in Washington in mid-January—the exact date has not been announced—when Obama hosts Hu for an official visit, complete with formal state dinner.
They'll have plenty to talk about. China's trade surplus with the U.S. totaled $201 billion through September, more than the next seven largest U.S. trading partners combined, according to the Commerce Dept. That trade gap, a drop in American manufacturing jobs, and the White House's contention that the yuan (which has gained 3 percent since a two-year peg to the dollar ended in June) is undervalued have made China a target for Congress.
At the same time, Obama has new hurdles to getting his agenda enacted, including spending on education, research, and infrastructure, following elections that handed Republicans control of the House next year. China is a good rallying issue as Obama pushes his spending plans, says Wendy Schiller, a political science professor at Brown University: "It's going to be hard for Republicans to say no when you mention competition with China."
Obama's predecessors used similar tactics, says H.W. Brands, a history professor at the University of Texas at Austin. "During the Cold War, Presidents talked about the Soviet Union. During the 1980s, when the Japanese economy was surging, they talked about Japan," says Brands. "President Obama talks about China for much the same reasons."
The bottom line: As Obama faces off with Republicans looking to shrink the government, he often cites China as a model for U.S. spending policy.