Pearlstein Wants Tough Trade Measures Against China…and the U.S.
Steven Pearlstein’s ready for the nuclear option. With the conviction of a man who knows he won’t be held accountable for the consequences of his prescriptions, Pearlstein says the time has come for action against China. Hopefully, those whose fingers are actually near the button will recognize Pearlstein’s suggestion for what it is: an outburst of frustration over what he considers China’s insubordination.
In his Washington Post business column yesterday, Pearlstein criticizes U.S. policymakers for blindly adhering to the view that China will inevitably transition to democratic capitalism, while they’ve excused market-distorting protectionism, mercantilism, and state dominance over the economy in China. Pearlstein writes:
Up to now, a succession of administrations has argued against directly challenging China over its mercantilist policies, figuring it would be more effective in the long run to let the economic relationship grow deeper and give the Chinese the time and respect their culture demands to make the inevitable transition to democratic capitalism.
What we have discovered, however, is that the Chinese don’t view the transition as inevitable and that, in any case, they really aren’t much interested in relationships. If anything, they’ve proven to be relentlessly transactional. And their view of business and economics remains so thoroughly mercantilist that they not only can’t imagine any other way, but assume that everyone else thinks the way they do. To try to convince them otherwise is folly.
Pearlstein’s suggestion that the Chinese “aren’t much interested in relationships” strikes me as frustration over the fact that China is no longer a U.S. supplicant. Perhaps the truth is that China isn’t much interested in a one-way relationship, where it is expected to meet all U.S. demands, while seeing its own wishes ignored. Calling them “relentlessly transactional” is accusing them of naivety for missing the bigger picture, which, for Pearlstein, is that the U.S. is still top dog and China ignores that at its peril.
Pearlstein is not the first columnist to criticize the Chinese government for putting its interests ahead of America’s (or, more accurately, putting what it believes to be its best interests ahead of what U.S. policymakers believe to be in their own interests). In a recent Cato policy paper titled Manufacturing Discord: Growing Tensions Threaten the U.S.-China Economic Relationship, I was addressing opinion leaders who have staked out positions similar to Pearlstein’s when I wrote:
Lately, the media have spilled lots of ink over the proposition that China has thrived at U.S. expense for too long, and that China’s growing assertiveness signals an urgent need for aggressive U.S. policy changes….
One explanation for the change in tenor is that media pundits, policymakers, and other analysts are viewing the relationship through a prism that has been altered by the fact of a rapidly rising China. That China emerged from the financial meltdown and subsequent global recession wealthier and on a virtually unchanged high-growth trajectory, while the United States faces slow growth, high unemployment, and a large debt (much of it owned by the Chinese), is breeding anxiety and changing perceptions of the relationship in both countries….
Other Countries as Ends-in-Themselves
Here in Babylon on the Potomac, most foreign policy discussions begin and end with the United States: How can we extend our control of the world? Who is challenging us? What problems might, say, a rising China, pose to American primacy? We are, as Madeleine Albright asserted, the “indispensable nation.” One popular scholar recently advanced the theory that the U.S. government is, and should be, the world’s government. There’s a real refusal to recognize that we are, as a simple matter of fact, isolated by the blessings of geography and power. We’re just not a 19th century continental European power, no matter how much we threat-inflate and conceive of ourselves as the only source of order in a disorderly world.
You’d think we’d be inclined to recognize the luxury that our isolation affords us, but you’d be wrong. Consequently, in discussions about the rise of China, for example, U.S. analysts generally pose the question as a simple U.S. vs. China confrontation: How quickly can they challenge us? Where should our “red lines” be? Which allies will support us? If our strategists were smart, they’d be thinking more creatively about offloading responsibility to countries that live more closely to China, and waiting to see how things progress. While the ChiCom menace tends to get represented as ten feet tall in these discussions, the Chinese have a host of significant problems, including the internal unrest that has been on display recently, among others.
High on the list of “other problems” is China’s relationship with countries like India. Much more so than the United States, countries like India and Japan have a lot to lose, potentially, from China’s rise. Liberal international relations thinkers are right to point out the positive-sumness of economic relations between potential adversaries. Economic ties between China and Taiwan, China and the U.S., China and Japan, are also positive forces that can help to moderate security competition. That said, security itself is zero-sum. Either you control your sea lines of communication or else another country does. If another country does, bad things can happen to you, as, for example, Japan remembers all too well.
All of which is a long-winded way of introducing this excellent article by James Lamont and Amy Kazmin in the Financial Times. Lamont and Kazmin highlight the growing unease in New Delhi about China. Unease tends to crop up when a big powerful neighbor does things like claim whole provinces of your country as its own territory, as China does with the Indian province of Arunachal Pradesh. (For more on this subject, see my talk on Capitol Hill from May 2008: video here.)
In fairness, the Bush administration did some smart things on this front, like trying to improve ties with India. For years, U.S.-India relations had been tainted by a cold war mindset where we resented their association with the Non-aligned Movement. (I think the India nuclear deal has a lot of downsides, but the intentions underpinning it were smart ones.) Similarly, the Bush administration signed a joint agreement with Japan stating that a peaceful resolution of the Taiwan dispute is a “common strategic objective.”
But the important part will be beyond getting other countries to accept our goodies (the India nuclear deal) or sign a statement of interest (the joint Japan-US statement on Taiwan). Those countries would rather, ceteris paribus, stand tall against China from over the shoulder of the United States. The only way that we will get to a point where the countries with the most to lose pay the most for a hedge against China is for the United States to credibly commit to do less. And on that front, there is a lot more work to be done.
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