Mitt Romney has threatened to declare China a currency manipulator and, in a February Wall Street Journal oped on China, stated, “A nation that represses its own people cannot ultimately be a trusted partner in an international system based on economic and political freedom.” But while his campaign has had no shortage of tough talk towards China, Romney’s history at Bain Capital and his ongoing investments in its funds suggest the former Massachusetts Governor has looked favorably on companies that benefit from China’s low labor costs and controlled currency.
Even more strikingly, Reuters’ Rachelle Younglai reports today: “As chairman of the 2002 Winter Olympics, he also said Beijing should not be punished for human rights abuses.” According to Younglai, Romney was quoted in the Chicago Tribune saying:
They have practices, as reported in the media, that violate my sense of human rights, but we should not build walls even if we vehemently disagree with many of their practices. Building bridges increases the possibility for spreading the ideas of civil societies.
Romney’s inconsistent positions on China have already been cited by fellow Republicans and Washington policy analysts as a casualty of campaign season rhetoric. Last February, Romney supporter Jon Huntsman called Romney’s China policy “wrongheaded,” and dismissed his bluster on China as “typical campaign rhetoric.”
That rhetoric also stands at odds with Romney’s business record. His history at Bain Capital, the private equity firm he founded in 1984 and ran through 1999, may pose some difficult questions for a candidate who now claims he would declare China a currency manipulator if elected president. His presidential campaign promotes how three of the companies that Bain invested in during this time — Staples, Sports Authority and Dominos Pizza — created more than 100,000 jobs combined. But when Reuters conducted an examination of products at Staples and Sports Authority stores, they found that Chinese manufactured products formed the backbone of the companies’ business. 40 percent of Staples products in the sample and two-thirds of Sports Authority products were manufactured in China. Dominos has, since Romney left Bain, announced plans to franchise their restaurant in China.
Bain’s heavy investments in companies that outsource manufacturing to China means that Romney, and the company he helped found, directly benefited from Beijing’s undervaluation of its currency and inexpensive labor.
While talking tough on China, Romney toed a very different line while CEO of Bain and chairman of the 2002 Winter Olympics. Indeed, Bain’s investments in China and Romney’s ongoing investments — including, via a Bain fund, in a controversial Chinese company which provides surveillance tools to the Chinese government — underscores the disconnect between Romney’s business career and positions taken in his campaign.