(lChinese President Xi Jinping U.S. President Donald Trump at Mar-a-Lago state in Palm Beach, Florida, U.S., April 6, 2017. REUTERS/Carlos Barria/File Photo
American politicians like to blame others for their own problems, and China has emerged as America’s favorite scapegoat, said American economist Stephen Roach.
Stephen Roach, a senior fellow of the Jackson Institute of Global Affairs under Yale University, made the statement in an interview with China Central Television (CCTV) in New York on July 13.
In his book “Unbalanced: The Codependency of America and China”, Roach discussed what caused the trade deficit of the U.S. to China, and argued that the “low-saving” culture and the “enjoy-now-pay-later” lifestyle of the U.S. are the main reasons behind the trade deficit.
“When you don’t save but you want a growth, you must import surplus savings from abroad, and to do that, you run a big balance of payments deficit, and trade deficits with many countries to attract foreign capital. Last year, we had trade deficits with 102 individual countries. That’s an outgrowth of our saving-investment imbalance, not a reflection of China doing damage to us through currencies, unfair trade practices or industrial policy as the Trump Administration is trying to convince the Americans to believe,” said Roach.
Roach had worked in the American investment bank Morgan Stanley for over three decades and cooperated with many Chinese companies. He has his own experience of working with China Construction Bank to establish China International Capital Corporation Limited when he was at Morgan Stanley as an example to refute the so-called “forced-technology transfer”.
“We worked together. Of course, we shared people, we shared systems, we shared solutions, we shared strategies. It was nothing forced about that. We wanted to build a successful business. That’s what joint ventures are all about,” said Roach.
Roach continued to say that China has emerged as America’s favorite scapegoat, and it was fundamentally because of the U.S. political system.
“Why is it that we need to blame others for our problems? I think it goes back to the value proposition behind our political system. We have a very short-term political horizon. We have our House of Representatives gets reelected every two years, senators every six years, the president every four years. None of them can admit that they may have made a mistake in governing, passing laws. And rather than admit that they make mistakes, they find it very convenient to blame others for issues that arise in the United States with respect to income inequality, jobs, real wages,” said Roach. — Reuters