International Law

Bilateral Trade and China Bashing

By Stan

Intriguing post by Will Lewis on a study about the relationship between U.S.-China trade stats and China bashing in the US of A:

A few weeks ago, George Mason University economists Carlos Ramirez and Rong Rong gave us a handy tool, available free of charge at SSRN, for predicting the US news cycle on bad stuff that China does, China Bashing: Does Trade Drive the ‘Bad’ News About China in the US?

The authors found that there is a 95 to 99 percent chance that US-China trade deficit shocks lead to a sharp rise in bad news about China reported in the US.

No big surprise with the conclusions here, although it’s interesting that this whole thing was researched with this sort of specificity. What really caught my eye was the following:

There has been a shock to the US-China trade deficit, but it is no traditional shock. Rather, the latest trade data shows a continued narrowing of the deficit. According to Ramirez and Rong’s research, we shouldn’t be seeing any large proportionate uptick in bad news in China as a result.

I can’t let this one go without throwing my opinion out there — this is probably my all-time favorite topic. Basically, I think that trade numbers are probably issue #1, in relation to encouraging bad China news in the US, but there are a lot of other issues as well. These include cyberspying, China’s international charm offensive, international monetary policy, the value of the RMB (related to trade of course), and various foreign policy matters such as North Korea.

You never know when one of these issues will rear its ugly head and create the impetus for a whole bunch of negative China stories. As we’ve seen in the past couple of days, all China needs to do is purchase T-bills at a slower pace than was the case in 2008, and some dork in newspaperland will accuse Beijing of trying to sabotage the US dollar.

That being said, it makes it rather difficult to predict the tenor of China news in the US in the upcoming months. Any time when there are a lot of folks out of work, however, the nationalist/populist fringe is always on the lookout for a foreign scapegoat.

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Full post as published by China Hearsay on April 15, 2009 (boomark / email).