China Bashing: Does Trade Drive the “Bad” News about China in the USA?

Abstract A monthly index of “bad” news about China as reported in the USA from January 1990 to December 2008 is developed in this paper. “Bad” is defined as news touching on the following issues: human rights, Tibet, child labor, democracy, and repression. Using this bad news index, this paper documents a peculiar finding: 3–4 months after a trade deficit shock to the US–China bilateral trade balance, the frequency of bad news published about China by US media outlets rises sharply, then dies off slowly. Statistical analysis reveals that the likelihood that this finding is just a coincidence is relatively small—about 1%. In addition, this paper finds a robust association between the annual number of Congressional hearings on China and the US–China bilateral trade deficit. These results suggest that “China bashing” may be endogenous to fluctuations in the US–China bilateral trade balance.