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Saturday, August 28, 2004

Cold War II?

Big story on the front page of The New York Times today about the growing economic prowess of China. The basic story line is no surprise, but the extent to which things have progressed was news to me. For example, the Chinese are big into Australia now -- billions and billions in trade going in either direction every year.

And China's using its economic muscle to score political points with the neighbors. O.k., if we're talking places like Myanmar, it's hard for me to get too worked up about it. But when you see that they'll soon be calling some shots in Australia, for crying out loud... Makes you think. Some day, certainly by the time my kids are my age, there's going to be some serious dealings with China. Most likely a major showdown.

The growing contempt for the United States throughout the world is playing right into the Chinese's hands. They just remind the nice folks in Malaysia, etc., that they've got more to fear from the U.S. than they do from China. It's hard to argue with them at this point. Next thing you know, the bridges to Beijing are built -- physically and politically.

Are we the next Russia? Are we wrecking our economy and poisoning our alliances with massive-deficit military spending and isolationism, the Soviet way? Are we so seriously lacking in diplomatic leadership that we are allowing a New Asia to emerge, with the same suspicion or even hatred in its heart for us that already infects much of the Muslim world? It's certainly possible.

And if you want to speculate about who will be waiting to dominate after we fall, just find a Saturday Times and read for yourself.

Comments (3)

A couple of thoughts:

1) I think its a good thing China is emerging as an economic world power. The country has over 1 billion people to support, and they're not gonna do it by growing rice.

2) The US is in a tough position now, but they can get out of it. I'm not buying the doom and gloom being proffered by the left. America will rebound, just not with George W Bush.

Bush the Elder and Clinton each approached China with more intelligence and finesse than the current administration. Neglect is the only word that seems appropriate to describe US behavior towards China under Bush II.

Since Tiananmen in 1989, some members of Congress have sought to block Most Favored Nation/Normal Trade Relations status for China, citing human rights abuses. Some have gone so far as to amplify the tensions across the Taiwan Strait in an attempt to move the US off of a One China policy. My read is that economic and diplomatic engagement is far more likely to yield positive results on these important fronts than isolationism mixed with a posture of aggression.

If we take a primary view of our relations with China through the lens of nationalism, I would say we're much more likely to produce a confrontation of the type you describe. On the other hand, if our focus is on the opportunities for productive engagement across several levels of our economy and culture, it's easier to start thinking in terms that yield symbiotic partnerships. On this level, it's less about the countries and more about the people and businesses. Isn't that a better fit with the spirit of independence that has always characterized our country's better behavior?

I'd rather think about selling Columbia and Snake River basin wheat and recycled scrap metal and paper to China than developing some type of doomed master strategy to contain the tiger. Worse still would be to hope to contain the tiger, but rely on optimism and a lack of action to achieve this misguided goal--that seems to be the Bush strategy.


Just as we're dealing with challenges here related to China, China has its struggles as well. A recent article from Foreign Affairs (above link) argues that China's transition to a market economy is hardly smooth sailing, and it also suggests that China has been largely dependent on western corporations, as opposed to home-grown industry, to foster economic growth.

While I believe that to a certain extent Clinton left his labor and environmental protection agenda dangling off in some unspecified future, he did make inroads that opened China's industries up to foreign ownership and investment. The transitions produced by such activity mean some pain in the US and in China, but the thesis is that the short-term pain is worth the long-term gains produced by complex economic interaction between our economies.

Bush's policies seem to implicitly support the same kind of foreign investment in Chinese manufacturing, but with none of the constructive engagement needed to ease the pain of transition related to human rights, labor, environment, etc. As I look at Bush's arms-length treatment of China, muddled as it is with an air of hostility, it's hard to see where we're going.

The local ramifications of the choice between engagement vs. isolation are clear. If Portland is ever going to recover its shipping container industry, I would think that strong partners in China will be an essential ingredient. Sure multinationals are moving more and more manufacturing to low-cost locales like China, and that's a serious issue, but I don't see how sticking our head in the sand is going to make that problem go away.

We're fighting to keep manufacturing jobs here in Oregon, as we should, with some successes and some failures. While we fight to keep jobs here, it probably also makes sense to take a realistic view of larger trends. A continual move of manufacturing to places like China might pose real challenges to the US, or we could turn those lemons into lemonade by working to lure engineering and design jobs--working for American and European firms with factories in China--to Portland.

China's going to crumble over the next 15 years. The question is how much damage they do on the way down.

And Taiwan needs to be saved from Communism. Period. The Communists have no plan to play nice with the world, except when they need the dough. So keep paying them when it's convenient for us, but make sure they keep their crappy gov't behind their current border.

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