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Pacific Perspectives
The U.S.-China Relationship: Only Paper Thin?
By Tom Plate
Los Angeles ?It is not always easy to tell whether the government of China
is really, truly that angry when it tells the world that it is really, truly
angry.
But lately China has been telling anyone who𠑥l listen that it𠏋 furious
beyond words with the U.S. right now. The cause for Beijing𠏋 dismay is the
Bush administration𠏋 move toward imposing hefty import taxes on incoming
Chinese coated paper. The sulking out of Beijing is sullen and significant,
even if somewhat stage-managed. This is because the Chinese appreciate that
such U.S. trade retaliation could spread from coated paper to a whole raft
of allegedly subsidized Chinese imports.
The growing anger on the American side originates mainly with those
industries who feel their products are undercut by China-originating
plastic, steel and textile goods that are priced impossibly cheaply. These
industries are well-represented by their well-paid pals in Congress,
especially Democrats who, having won control of Congress just five months
ago, are now drooling over winning back the White House.
Picking a fight with Beijing at this moment seems like a grand, no-lose idea
to the Democrats. For all its economic advances, China remains a mainly
repressive state that𠏋 a poster icon for U.S. human rights groups of all
kinds ?and these groups have members who wouldn㦙 vote for a Republican
even
What𠏋 more, the Chinese have stashed away the equivalent of over a trillion
U.S. dollars in reserve deposits, largely due to the fact that it peddles so
much more of its stuff here than America does in China. Another issue is the
Chinese government𠏋 determination to keep the value of its currency lower
than its market value. Among other things, this helps all Chinese exporters
market their goods at lower prices in foreign countries.
It𠏋 all very complicated. You can find experts, in the West and in Asia,
who make strong arguments on all sides of these issues. Personally and
professionally, I find the careful analysis of Prof. Lawrence J. Lau and his
crack team at the Stanford Center for International Development the most
persuasive. They have argued that the U.S. actually benefits more from the
trade imbalance because there is more value-added to the U.S. economy from
our exports to them, than for the Chinese economy from theirs to ours.
So the work of the Lau team makes you wonder why the Democrats would want to
ruin a thing that𠏋 good for the U.S. There𠏋 another reason why the
impending Democratic attack on China𠏋 economic ways and means is bad news
for America, even if it racks up lots of votes for the Democratic Party. The
fact of the matter is that unless China self-destructs, it is well on its
way to becoming a world power ?no matter what human-rights groups on the
left and neo-conservatives on the right want. The U.S. can thus choose to
work with the Chinese or choose to make an enemy out of them by going
ballistic to every perceived inequity. 鏠hina𠏋 efforts do not necessarily
conflict with U.S. interests,?writes Fletcher School professor Daniel
Drezner in 孏he New New World Order,?a deeply thoughtful international
overview in the current 焅oreign Affairs?journal, 弎ut,?he adds, 懀hey
could if Beijing so desired.?
The Bush administration, on the whole, has managed relations with Beijing
about a billion times better than its fiasco approach to the Middle East.
Alas, now it is the Democratic Congress that looms as the new unilateralist
know-nothings. Travel almost anywhere in Asia and you will hear the same
plea over and over again: Whatever you Americans do, don㦙 create
unnecessary trouble with China. We don㦙 want to have to take sides and you
don㦙 want the trouble the Chinese can cause.
Singapore𠏋 Prime Minister Lee Hsien Loong recently put the matter to me in
these sharp terms: 孏he trade deficit has become a political issue. It has
been linked up with the exchange rate. Economically speaking, it doesn㦙
follow, but that𠏋 the politics and you can㦙 unlink that. So that is a
problem and if Congress pushes the wrong way, you can have a lot of rough
weather as you did with Japan in the ?0s. But this will be much worse
because China is much bigger and it𠏋 a completely different relationship.
The U.S. can fight with Japan and it𠏋 not going to be your enemy. But if
you fight with China, that's very big trouble.?
Iraq notwithstanding, America remains the world𠏋 only military and economic
superpower. But to keep that position, it needs to pick its enemies very
carefully. If there𠏋 one country that needs to be handled with care, it𠏋
China. In a perfect world, the coated-paper threat would be thrown in the
trash can of domestic politics. But the U.S. presidential campaign has in
effect already begun. Expect a lot more of this kind of nonsense ?with some
of it almost certainly coming back to haunt us.
UCLA Prof Tom Plate𠏋 new book is titled 鏠onfessions of an American Media
Man.??Tom Plate, 2007. Distributed by the UCLA Media Center.
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