“I understand my opponent has been running around Ohio claiming he’s going to roll up his sleeves and he’s going to take the fight to China. Now, here’s the thing. His experience has been owning companies that were called ‘pioneers’ in the business of outsourcing jobs to countries like China. He made money investing in companies that uprooted from here and went to China. Pioneers. Now, Ohio, you can’t stand up to China when all you’ve done is send them our jobs.”

– President Obama, at a rally in Cincinnati

President Barack Obama’s comments in Ohio match an ad airing in North Carolina that asserts Romney outsourced jobs to China.

This is a pretty serious charge. What’s the evidence for this?

Obama’s reference to Romney owning companies that were “pioneers” comes directly from a June front-page article in The Washington Post.

The actual article, in fact, does not say that transfers of U.S. jobs took place while Romney ran the private equity firm of Bain Capital. Instead, it says that Bain was prescient in identifying an emerging business trend – the movement of back-office, customer service and other functions out of companies that were willing to let third parties handle that business. Several of the companies mentioned have grown into major international players in offshoring.

However, the president put it bluntly: “You can’t stand up to China when all you’ve done is send them our jobs.”

No evidence found

The Obama campaign pointed to several Bain investments to back up this claim, but upon close examination they fall apart.

In the case of Holson Burnes, a Rhode Island company that manufactured picture frame and photo albums, there is no evidence American jobs were ever shipped to China.

Two other companies named by the Obama campaign, Stream International and Modus Media, were mentioned in the Post article, though no reference is made of Stream having operations in China. Modus was originally a subsidiary of Stream but became an independent company in 1998. Modus had operations that included facilities in China, but there is no evidence that U.S. jobs were shipped there while Romney was managing Bain. (In 2000, Modus closed a plant in California while opening one in Mexico, not China.)

Finally, there is Hong Kong-based Global-Tech Appliances, which manufactured appliances for a number of consumer product companies, such as Sunbeam and Hamilton Beach. But this was an investment made by two Bain affiliates, principally Brookside Capital. Brookside is in essence a hedge fund, meaning it makes passive stock investments.

Still, it is worth noting that in a 1999 Securities and Exchange Commission filing Romney was listed as “the sole shareholder, sole director, President and Chief Executive Officer of Brookside Inc., and thus is the controlling person of Brookside Inc.” Presumably he kept a close watch on Brookside’s investments, but these stock purchases still are of a different nature than Bain Capital’s private-equity deals.

Global-Tech certainly benefited from outsourcing, though one news release issued by the company during the 1998-2000 period of Bain ownership bemoans the fact that Sunbeam had delayed closing its plants, forcing Global-Tech to delay expansion plans.

A passive investment

Without evidence of a direct investment, it seems a stretch to say Romney shipped jobs to China because of a passive investment in a foreign company. This is different from investments in which Bain Capital took a direct role in helping to manage a company.

The president and his campaign have gone too far here. There is no evidence that Romney, through Bain investments in which he had an active role, was responsible for shipping American jobs to China.

We would have considered this a major error, except for the fact that some of the Bain investments were a harbinger of broader trends in the transfer of American jobs overseas. Global-Tech also benefited from outsourcing, but as far as we can tell it was a passive investment by a Bain-related hedge fund.

That means Romney probably profited from outsourcing. But that is a far cry from saying that Romney himself was responsible for outsourcing American jobs to China.