China bashing doesn’t help California

by Joseph Perkins | October 26, 2012 11:12 am

[1]Oct. 26, 2012

By Joseph Perkins

I imagine that Jeremy Potash, executive director of the California-Asia Business Council[2], winced this week while watching the foreign policy debate between President Obama and Gov. Mitt Romney.

Her group is trying to increase trade between California, the world’s ninth-largest economy, and China, the world’s second-largest economy.

And it certainly did not help that the president and the governor spent the last 15 minutes of their debate bashing China, each trying to persuade protectionist voters that they’d be tougher on Beijing than his opponent.

The pandering by both Obama and Romney was no doubt driven by polls showing that Americans view China as a threat to their economic well being.

For instance, a survey this past spring by Pew Research Center[3] found that 78 percent of respondents said the large amount of U.S. debt held by China is a “very serious problem” for this country; 71 percent said the same of U.S. job losses China; and 61 percent about our trade deficit with China.

Yet, while our indebtedness to Beijing, our trade deficit with China and our real or imagined job losses to the People’s Republic are legitimate concerns, the very last thing California needs is beef with China and its 1.4 billion consumers.

California exports

Indeed, California exports to Mainland China increased to $14.2 billion in 2011 from $9.7 billion in 2009[4], according to the U.S. Commerce Department. That’s nearly a 50 percent increase in sales of California goods and services to China in just a three year span. And it was especially welcome during a time the state was recovering from the Great Recession.

California even benefits from all the Chinese-made goods that flow into this country, including the low-priced Chinese-made tires Obama railed against during his meet up with Romney in Boca Raton, Fla.

That’s because the Ports of Los Angeles, Long Beach and Oakland handle, among them, 45 percent of the waterborne containerized cargo[5] shipped to the United States. Those Chinese imports support tens of thousands of port-related jobs, including wholesale trade, warehousing and transportation.

Chinese imports also are a boon to California consumers, who are able to save a considerable amount of their disposable incomes by purchasing goods “made in China” for American companies.

That includes California-based companies Apple, whose iPhone is made in China; Gap, which outsources some its clothing manufacturing to China; and Mattel, which entrusts much of its toy making to Chinese elves.

All told, Chinese imports make up less than 3 percent of total U.S. personal consumption, according to a report last year by the Federal Reserve of San Francisco[6], authored by senior economist Galina Hale and senior research advisor Bart Hobijn.

And of that amount, more than half the value of those “made in China” consumer goods actually redounds to U.S. companies (and their workers). Like Apple and Gap and Mattel.

No state profits as much from trade with China as California.  And no state stands to lose as much if the protectionist banter this week between Obama and Romney is translated into actual trade policy by whichever man the voters elect.

  1. [Image]:
  2. California-Asia Business Council:
  3. Pew Research Center:
  4. increased to $14.2 billion in 2011 from $9.7 billion in 2009:
  5. 45 percent of the waterborne containerized cargo:
  6. report last year by the Federal Reserve of San Francisco:

Source URL: