President Obama and Republican candidate Mitt Romney keep promising to be tough on China. Although their grievances are legitimate, simple-minded China-bashing is a dumb way to pursue them. Both countries will have to wise up if they want global trade to work to their benefit.

Romney’s pledge to declare China a “currency manipulator” is probably an empty threat. As Romney well knows, such a move – tantamount to imposing trade sanctions – would have little effect on China’s policies and spark a trade war that would hurt the United States at least as much as China.

That said, China does manipulate its currency. It has made its exports artificially cheap and done real harm to producers in other countries, including the U.S. Although the renminbi has appreciated by 11 percent since Obama took office, the increase in China’s foreign reserves demonstrates that the currency is still cheap. The country’s rising dollar reserves also show how much China is still helping to finance the U.S. budget deficit – another complication for Americans who want to get tough.

China, though, isn’t alone in managing its exchange rate to boost exports. Others include Japan, which is on track to edge out China as the U.S. government’s largest creditor.

Hence, the U.S. needs to take a fairer, more comprehensive approach in its efforts to restore global balance. The U.S. should work toward bringing currency policy under more effective review, either through the International Monetary Fund or the World Trade Organization. Member countries should promise to allow movement of currencies toward levels that would reduce trade imbalances. The WTO could decide when and how to punish those who failed to comply.

The Chinese, for their part, should recognize that strong multinational oversight is in their best interests. The WTO was designed to help governments promote trade through exchanges of concessions. The idea that opening up to trade hurts your economy unless you’re compensated for it is bad economics, but it’s good domestic politics in that it helps contain protectionist passions. That’s why the international trade-policy system has worked so well.

Since China made the bold move of joining the WTO in 2001, its trade bureaucrats have settled into a narrow-minded litigating mode, seeking gains where they can, using delay to shield temporary trading advantages.

That’s a pity. China faces an enormous challenge in the next few years as it rebalances its economy toward consumption and imports. Greater enthusiasm for the underlying purposes of WTO membership would serve China well as it seeks to curb protectionist sentiment at home and withstand pressures from trade partners such as the U.S. It would help to move domestic economic reform forward and deflect the foreign criticism that China resents so acutely.

A fuller commitment to the principles of WTO membership would require a whole new approach. It can’t remain a selfish user and gamer of the system. It should focus on strengthening an international regime that offers the best guarantee of the liberal trading order on which its prosperity will depend.

The global trading system suffers from a lack of leadership. The U.S.’ narrow focus on China underscores the point.

Although the multilateral system has survived the global economic slump better than many expected, it’s no thanks to the efforts of governments to strengthen it.

The U.S., as the architect of the WTO system, should reaffirm its commitment to the larger idea. So should China. Theirs is already the most important bilateral relationship in the world. They can benefit themselves and everybody else by forming a partnership to strengthen the multilateral trading system. More goodwill and a lot more ambition on both sides will be needed to make it happen.