The rise of China may not necessarily be at the expense of the United States, three professors noted during a panel Tuesday night.
The participants in the discussion were Ed Tower and Lori Leachman, both professors of economics, and Bruce Jentleson, professor of public policy and political science. The academics discussed China and possible ensuing currency wars at the last Super Tuesday event of the semester hosted by Duke Political Union, the Roosevelt Institute, Duke International Relations Association and Duke East Asia Nexus.
All the professors agreed that the rise of China can have a positive impact on the world. Jentleson said a richer China can help in the economic development of other countries.
“[Global] trade is never a zero-sum [situation]—everyone gains,” Leachman said.
The panelists also addressed the question of whether China will follow the path of Japan, which had an appreciating currency that collapsed in the mid-90s. Leachman recalled the collapse of the Japanese market—the effect of the appreciation of the yen, inefficient lending and generally unwise banking practices.
A positive effect of an appreciated Chinese currency could allow the country to buy raw material at cheaper prices, and it would be less expensive for China to invest in other countries, Leachman said. Currency appreciation, however, could also displace the workforce.
A potential “currency war” between China and the U.S. dominated much of the panel’s discussion.
Jentleson said he does not think the United States is “heading toward confrontation with China,” adding that no country can dominate the 21st century in the same manner that the United States dominated during the Cold War era. Tower added that China’s ascendancy is the reason that the standard of living in the U.S. has risen despite a trade deficit.
Leachman noted that many Americans would rather see less domestic economic growth than fall as the preeminent economic power in the world.
The Obama administration is focusing too much on the effects that China has on the manufacturing sector of the U.S. economy, Tower said. He speculated that this is because the manufacturing sector is highly unionized and unions serve as major contributors to the Democratic Party.
Ultimately, the panel participants agreed that the United States should worry more about maintaining its economic strength than the possibility of a currency war with China.
Leachman said the United States’ problems lie with a large income disparity and Americans spending more than they make. Jentleson noted that the fears over China are a “distraction.”
Caitlin Gorback, a senior economics major, said the panel offered some “good points, such as the palliative effects of blaming China.”
Another student present at the event, junior Neel Mehta, said the panel provided a “holistic view from three different perspectives,” which allowed the audience to hear differing opinions about China’s new growth.
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