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Issue Date: Vol. 52, No. 3, March 2012, Posted On: 3/18/2012

Talking Tough To China? It's No Time For Cowboy Diplomacy

Hank Schlesinger
China trade discourse, China-American trade relations, China-U.S trade, bulk vending, vending machine business, vending, bulk vendor, bulk vender, coin-operated, coin machine, coin-op news, Vending Times, Hank Schlesinger, trade diplomacy, bulk vending supplies

Politicians can always find common ground as long as they can identify a common threat. Right now, for instance, Republicans and Democrats are uniting for some China bashing. It is very much a tough talk game. Whoever can talk the toughest, the most belligerently, will be declared the winner. The only presidential candidate who ever lived and worked in China, and spoke the native language, was Jon Huntsman, who has long dropped out of the race.

In bulk vending, this tough talking game could be a worrisome aspect of the political season. A trade war with China could destroy the industry from top to bottom. A double-digit jump in the cost of merchandise would prove devastating to bulk vending amid already rising prices and razor-thin profit margins.

When candidates and incumbents vow to defeat or stand up to China's "godless socialism," alarm bells sound in bulk vending and beyond. It's scary stuff. Even if Chinese leaders took the highly unlikely step of allowing their currency to "float" in value on the open market -- because of some unspecified threat made by the U.S. -- it would cause massive disruptions. By some estimates, the yuan is undervalued by as much as 40%. While it would make some U.S. products more attractive on the world market, it would devastate more industries unable to absorb increased costs.

What's on the table are mortgages, car payments and college funds. In the political season that has come to resemble a sporting event highlighted by "trash talk" ads, it's easy to forget that little detail. There is a lot riding on America's approach to diplomacy in the next few years.

The world is also paying attention to the tough talk. Europeans see it as "typical American bluster" or part and parcel of the cowboy shoot'em up mentality; the more thoughtful are interpreting it as a simple political ploy. The idea, it seems, is to paint the other guy as somehow weak when it comes to engaging Chinese leadership. That is to say, the tough talk is political and not policy oriented.

In many ways, that is worrisome. Tough talk is woefully short of depth that leads to substantial and long-term policy. Tough talk isn't policy, it's a vibe. Put into action, it probably involves pounding a fist on a table, and maybe some yelling and an icy stare. That's what I imagine, since it is actually more of a pose without substance. Even worse, it's shortsighted. What's needed is a durable policy approach to China that benefits both countries. I suggest something that offers stability with protections for American businesses for things like copyrights and increased access to China's rising affluent market.

Tough talk aside, diplomacy isn't for sissies. It's complicated, and boring, and nowhere near as confrontational as name-calling. But it is the way nations do business. I wonder who, if anyone, has something resembling a long-term strategy -- and just when they will take the time to fill the rest of us in on it.

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