For US and China, cooperation is best way forward

Whether one believes him or not, Chinese President Xi Jinping is right: cooperation is the “only viable way.” There are too many issues – climate change, global security, economic recovery, just to name a few – that cannot be addressed by any one nation, including the United States. While every leader should and must look after his/her nation’s interests first, it need not be a “zero-sum” game.

Unlike US President Donald Trump’s “America First” posture, Xi’s proposed Belt and Road Initiative (BRI) is a “China First” policy but includes the world (or at least part of it). It’s a classic example of his so-called interconnected, inclusive, invigorated and innovative trade and investment architecture. Participating countries would be a market for its industrial overcapacity and they would benefit from new Chinese investment and trade. Linking China to Europe with a sea route in the south and railway in the north,  the world is truly interconnected from China to South Asia, the Middle East, Africa, Central Asia and Europe. What’s more, the BRI is already bearing fruit – trade between China and the over 60 participating countries along the route increased by over 15% year-on-year in October 2017. China has invested over US$65 billion in these countries and plans to invest nearly US$1 trillion in infrastructure construction and industries over the next decade.

Xi has called on the US to “cool its rhetoric” on and establish a dialogue with Pyongyang, which is the only way to lower the temperature on the Korean Peninsula. Nuclear weapons being its only realistic “issuance policy,” there is no way that the DPRK would give them up without incurring unthinkable amounts property damages and loss of human lives.

To that end, “cooperation is the only viable way” to address the world’s troubling economic and geopolitical issues.

Troubling economic and geopolitical issues

On economic issues,  the world, particularly that of the developed one, is still struggling to recover from the 2007 financial crisis. The economies of the US, EU and Japan are growing at less than 2% annually. According to the International Monetary Fund (IMF),  the emerged markets’ future growth rate would be no better and could be worse if rising protectionism and populism in the EU and US are not reversed.

The emerging economies are also dependent on global economic cooperation and integration. India’s economic growth rate is expected to decline in 2017 to 6.5% from 7.5% in the previous two years. Uncertain, if not falling, commodity demand and prices are putting growth in Russia and Brazil at risk. All three require international investment and markets to pull their economies out of the malaise. Though the Chinese economy is expected to grow between 6% and 7% annually over the next five years, that is partly based on an improvement in the world economy.

On the geopolitical front, flashpoints are evident in the Middle East, Eastern Europe and, of course, the Korean Peninsula. With Donald Trump decertifying the Iran nuclear deal agreed on by Iran and the “P5 + 1” – the US, UK, France, China, Russia and Germany – Iran vows not only to maintain its missile program and might resume its nuclear weapons one. That would rile Israel and Saudi Arabia and could lead to war. Rejecting a freeze on holding military exercises with South Korea and sending three carrier battle groups to Asia could prompt North Korea to conduct more nuclear weapons tests. Adding fuel to the fire is  Nato, the Western alliance formed after World War II to deter the Soviet Union from expanding into Western Europe, which is beefing up its military in Eastern Europe to deter “Russian aggression.” Russia is pushing back, deploying more soldiers and weapons along its western border.

Perhaps most important is the formation of a US-China collaborative relationship, China being America’s biggest trade partner, the world’s second-largest economy and third most powerful military. Indeed, most analysts would agree that no issues, from climate change to international trade and financial reforms, can be addressed without both countries joining the conversations. What’s more, the US could reap huge benefits from cooperation.

Benefits of China-US cooperation

Trump’s November 9-10 visit to China has already brought huge rewards to the US, clinching over US$250 billion of business deals for American firms. That number would surge with a cooperative relationship.

Trump’s November 9-10 visit to China has already brought huge rewards to the US, clinching over US$250 billion of business deals for American firms. That number would surge with a cooperative relationship

First, Trump’s US$1 trillion infrastructure expansion and rebuilding projects would become a reality with Chinese financial and technical help. China has over US$3 trillion, US$21 trillion and US$1.2 trillion respectively in foreign reserves, capital formation (bank deposits) and US Treasury holdings. It has become the world’s leader in high-speed railway, bridge, highway, power generation plant, and airport construction.

Second, the currently over US$650 billion in two-way trade could mushroom given their huge markets and high degree of economic cooperation. China’s huge and fast-growing middle-class population could be the “US business’ and farmers’ dream,” easily buying more American high-tech, industrial, consumer and agricultural products. China is already buying 25% of  Boeing’s commercial airplanes, and a cooperative relationship would bring it more business. The increasingly affluent and growing Chinese middle class should be the US Cattle, hog and soybean growers’ “dream,. China’s over 1.35 billion mouths eat a lot of beef, pork and soybean-based foodstuffs. Other beneficiaries include the energy and high-tech sectors.

Third, growing trade between China and the US would enhance and sustain world economic recovery. Globalization has established an efficient international supply chain. More production in the US and China would increase the economic activities of countries involved in it. For example, building more airplanes for the Chinese market would increase the demand for Canadian commodities.

Fourth, a US-China cooperative relationship would improve global security by steering the two countries away from the “Thucydides Trap” – the likelihood of a war between an existent power (the US) and a rising one (China).

However, given the deeply entrenched mistrust of communism and strong anti-China sentiments in America, a US-China cooperative relationship would be difficult to attain.

The problem of forming a US-China cooperative relationship

Many in the US are of the opinion that China is evil and anti-America, not living by “universal rules, values or democratic ideals.” Michael Pillsbury, a former US government senior official, wrote in his book, the Hundred Year Marathon, that China is using deception to supplant the US as the global hegemon by 2049 (the 100th anniversary of the People’s Republic of China). Just recently, US Secretary of State Rex Tillerson tried to recruit India into a 100-year alliance against China, saying that the communist regime is not conducive to world peace and progress.

To that end, the anti-China rhetoric could be more relentless and heated, not less. American journalists covering the Trump state visit are said to be “disappointed” and “shocked” by the US president for not blaming China for the huge “trade imbalance,” not doing enough to curb North Korea’s nuclear ambitions, and castigating the Asian giant for building islands in the South China Sea. US newspapers and pundits are climbing over each other to denounce Trump for “making China great.” New Jersey Democratic Senator Robert Menendez, on trial for bribery, criticized Trump for “kowtowing” to China and making “America weak” on the world stage.

Whether or not the anti-China rhetoric is right, the majority of Americans believe it, perhaps due to decades of subjective reporting on the country. The interpreter for a Tibetan delegation (who visited North America to explore business opportunities in the early 2000s) told this author he could not find one positive report on China during his month-long trip. His observation is as true today as it was 15 years ago.

The negative image that most Americans (and Canadians) have of China has allowed the anti-China crowd to fan its rhetoric.  It does not matter that China has little leverage over North Korea and is not responsible for the huge US trade deficit. It was George W Bush’s labeling North Korea as a member of the “Axis of Evil” that prompted its nuclear weapons program. It was paranoid US trade policies of blocking exports deemed “dual military-civilian use” that has squandered many business opportunities. Using value-added figures (ignoring re-export figures) has distorted the deficit numbers. As indicated in past articles, China only contributed US$11 of the US$174 cost in producing Apple’s iPad. The other costs were incurred elsewhere, including the US.

To the anti-China crowd, everything China does has a sinister motive behind it. China’s building of a strong military is seen as an intention to bully smaller neighbors. It’s building of the world’s largest ocean dredger is viewed as a sign that China will build more islands in the South China Sea. China’s Road and Belt Initiative and Asian Infrastructure Investment are seen as a “Trojan Horse” to supplant US global dominance and put participating nations forever into debt. Even the recently concluded business deals of over US$250 billion are looked at with cynicism, suggesting that they might not materialize and that they are a “publicity stunt.” Deep suspicion of China’s words and deeds have turned speculation into “facts.”

That’s a shame because a US-China cooperative relationship can help  Trump “Make America Great Again” sooner rather than later. Besides, China does not always lie, nor do its critics always tell the truth about the Asian giant.