Anticipating the forthcoming regime change in Washington, a host of academics and pundits have begun to offer suggestions and recommendations on how President-elect Joe Biden should rebuild the bilateral relations with China.
Bill Overholt just gave one of the most comprehensive reviews on this subject. He was the first Western observer to see the “rise of China,” when he published a book with that title in 1993 and remained, arguably, the dean of the group of unbiased and objective China watchers in the West. Currently, he is senior research fellow at Harvard’s Kennedy School of Government.
Overholt recently gave a lecture titled “Myths and Realities in Sino-American Relations” at Harvard’s Fairbank Center for Chinese Studies. The edited version of his talk is not yet ready for posting on YouTube, but he generously made a copy of original unedited recording available to me, which Asia Times readers can access by clicking on the link above. The video also includes commentary by Harvard Professor Emeritus Ezra Vogel and former World Bank chief economist Larry Summers.
I firmly believe separation of myths from reality is essential to regaining a healthy bilateral relationship between the US and China.
Never-ending Tiananmen protest
One of the most enduring myths traces its roots to the student protest in Beijing’s Tiananmen Square that occurred in May and early June 1989. Now, on every June 4, virtually every TV screen in the West displays the image of the young man standing in front of a column of tanks as a reminder that the “fight for democracy” was short-lived.
That’s how a myth was born. The students in Beijing were protesting official corruption and unfair job assignments after graduation. A gaggle of Western reporters had happened to follow Soviet leader Mikhail Gorbachev on his visit to Beijing. They saw a ragtag group of students huddled on the Square and rhapsodized that they were demanding democracy.
Thus the West has not only not forgotten about the Tiananmen incident, but it has become a legendary cudgel used by political leaders and the media to attack China, alleging lack of democracy and violations of human rights.
In the 30-plus years since June 1989, China has undergone a dramatic rate of economic reform unprecedented in the history of mankind. In 1989, China’s gross domestic product was barely 6% of that of the US. Since then, China’s GDP has doubled every seven years. Today, China’s economy is closing the gap and is about to surpass the US, most likely within the next five years.
China has also lifted more than 800 million people out of poverty and the most recent report indicated that it has eliminated “absolute poverty.” The Wall Street Journal made the same observation. This was accomplished by building roads to remote villages, provide subsidized housing and vocational training and technical guidance to improve farming based on advances in science.
Depending on local conditions, the poor improved their livelihoods by raising higher-valued crops, selling handicrafts via the Internet and hosting guesthouses for tourists.
The country’s critics do not acknowledge what the Communist Party in China has done in alleviating poverty but concentrate on outlier situations and individuals that are useful to accentuate the ideological differences between the US and China. China-bashers cannot let go of the false memory that the CPC suppressed democracy at Tiananmen Square.
How does Washington compare?
If Beijing were to join the ideological spitting contest, it could easily point out that Food Stamps given to welfare recipients in the US cannot provide the dignity of a steadily improving livelihood. And Beijing might well ask, “By the way, Washington, how many have you taken out of poverty? And why do people of color get shot and arrested more frequently than the general population?”
Another myth is that China threatens US national security, despite 800 to 1,000 American military bases surrounding the globe compared with China’s single one on the Horn of Africa. That base in Djibouti is to support People’s Liberation Army Navy ships protecting the shipping lanes from pirates.
A more reasonable explanation is that the Pentagon and the weapons industry need China to justify the annual budget allocation for weapons of mass destruction.
Every time a US naval flotilla visits the South China Sea, it comes home feeling less secure, because American sailors increasingly face menacing missiles and weapons of carrier destruction on atolls turned into military bases by China.
For decades, American ships and planes had a free run along the coast of China, and it would appear that Beijing is fed up with the constant intrusions and now has the wherewithal to threaten unwelcome visitors.
Apparently, the Pentagon’s feeling less “free” after its “freedom of navigation operations” on the South China Sea is not enough to discourage it from sending flotillas halfway around the world, but it is making it worry more and swagger less.
Lose-lose trade war
Rectifying unfair trade and bringing jobs back to America was the most prominent myth of President Donald Trump’s election campaign, and it failed miserably. The tariffs he levied on imports from China raised the cost of goods to the American consumer, and China’s tariffs in retaliation reduced American exports to China. The tariffs were supposed to reduce the trade imbalance; instead, the US trade deficit got bigger.
The tariff war was supposed to bring American manufacturing back to the US, which never happened. Jobs were shipped to China in the first place to take advantage of the lower labor costs. If tariff barriers make it unprofitable to make the product in China, the factory may be forced to locate to lower-cost places such as Vietnam or Bangladesh – but certainly not back to the US, where the high cost base was the original reason to leave.
Unfortunately, America’s organized labor vigorously perpetuated the myth that China “stole” America’s manufacturing jobs. The reality is that, as the economy evolved, most jobs were eliminated by automation. As Overholt said in his lecture, “China lost nearly 45 million manufacturing jobs while we were losing 3 million, but Chinese leaders moved most of those displaced people into services while American leaders just tried to shift the responsibility.”
There are other myths big and small that get in the way of normal relations between the two largest economies of the world. As I pointed out in my last commentary, if Biden can find ways to collaborate with China, he will see a more rapid economic recovery, job creation, help in infrastructure and booming free trade.
I said, “The world is entitled to exhale in relief now that the reign of error by US President Donald Trump is over.” Indeed, with a rational Biden administration headed by a veteran diplomat in Antony Blinken as secretary of state, we can expect dialogue and serious negotiations over contentious issues, but not the endless confrontations, tantrums and outrageous accusations that we witnessed from Mike Pompeo.
RCEP, a 15-country free-trade bloc
The most telling indication on the future of bilateral relations is the recently concluded Regional Comprehensive Economic Partnership among the 10 ASEAN countries and China, Japan, South Korea, Australia and New Zealand.
According to an analysis by Brookings, “RCEP will connect about 30% of the world’s people and output and, in the right political context, will generate significant gains.” Brookings goes on the say, “RCEP could add $209 billion annually to world incomes, and $500 billion to world trade by 2030.” It is the world’s biggest trading bloc, bigger than the European Union and the United States-Mexico-Canada Agreement.
As Pepe Escobar has explained, RCEP is a real deal. The agreement was driven by the Association of Southeast Asian Nations and took eight years to reach consensus. It was just as well that the US was not involved because the Americans would have lost their patience and staying power long before the end. Further, the agreement does not provide for America or anyone to be first. No ideology whatsoever, just free and open trade.
With China and Japan, the world’s second- and third-largest economy respectively, as members of RCEP, it’s understandable why even Australia joined. Since Trump became president, the right-wing government in Canberra has been acting like a jackal madly attacking Beijing on all sorts of ideological issues to please its masters, Trump and Pompeo.
Prime Minister Scott Morrison’s government seemed to have forgotten that 37% of Australia’s exports go to China, its most important customer, and only 4% to the US. Recently, China decided to give Morrison a bitter dose of medicine by raising tariffs on Australian exports and letting perishables rot on the dock.
With the prospect of Trump no longer glowering in his corner, Morrison was not so stupid as to opt out of RCEP, most likely his last chance to repair his relationship with Beijing and save Australia’s economic future.
When Joe Biden moves into the Oval Office on January 20, one hopes that his top diplomat, Tony Blinken, will be ready to deal with China based on reality, free from myths and ideological baggage. Issues of common interest such as climate change and controlling the Covid-19 pandemic would provide easy footing for the two parties to move forward.
Blinken has publicly stated that China should be viewed as a competitor. Chinese stateswoman Fu Ying wrote in The New York Times this month that cooperative competition is possible between China and the US. She is former vice-minister of foreign affairs and one of China’s most visible spokespeople on international relations.
Constructive competition will make both China and the US stronger and presage positive outcomes for both. The zero-sum confrontation favored by the Trump administration would not have done so. Let’s hope that under Blinken’s leadership, the two countries can move along the path of win-win outcomes.
George Koo recently retired from a global advisory services firm where he advised clients on their China strategies and business operations. Educated at MIT, the Stevens Institute and Santa Clara University, he is the founder and former managing director of International Strategic Alliances. He is currently a board member of Freschfield’s, a novel green building platform.