President Hu Jintao comes to the U.S. shortly for what is always hoped to be an opportunity to settle growing frictions. But all signs are neither party has their ducks in a row for any major breakthroughs in what is becoming the America’s most difficult foreign policy problem after Iraq and terrorism.
Through the muck of Chinese statements and the scent of a bitter inner Party schuffle on policy emerges. The issues are growing peasant dissonance, widening regional disparities, unprecedented crippling corruption, the heritage of bureaucratic mediocrity, and perhaps more “democracy” within the Communist elite. But as Party history has over and over again demonstrated, these above ground differences are likely to be more a reflection of personal rivalry than legitimate ideological debate. Hu appears hemmed in by temporary economic success and fear of moving into the unknown of adjusting to a new domestic strategy and international role.
On the U.S. side, there are no easy stratagems. Despite Administration threats, there is no real inclination to clamp trade restrictions on China’s growing surplus with the U.S. [now well past the $100 billion and growing.] Any such initiative would loose a Congressional protectionist firestorm. There will again be Chinese promises to lift restrictions but not President Bush’s level playing field.
Washington cannot hope for relief on China’s undervalued currency. Truth is the world’s fastest growing economy’s financial structure is fragile. Chinese leadership fears setting off a run on their currency [even with draconian controls]. With Chinese export prices so much lower than its former Western competitors and Japan and slowly develop alternatives in other low-wage countries, only a massive, disruptive reevaluation would make much difference to their dumping.
Bush probably will bang the table again about intellectual property. The U.S. is losing billions annually in theft of everything from technologies to brand names to dual purpose secrets. But periodically enacted new legislation is flouted by local Party cadre profiting from the piracy.
Beijing propagandists argue China is the scapegoat for the U.S.’ own economic transgressions – its roaring internal deficit as well as its balance of payments hemorrhaging. That’s not going to stop the Chinese from buying American debt – their reserves have just passed the $1 trillion mark to become the world’s No. 1. Where else would they put their foreign exchange to try to prevent inflation? And, hopefully, is it not that old Milord Keynes formula. [If I owe the bank 100 pounds, they own me; if I owe the bank one million pounds, I own them.] The Chinese have almost as much interest in the dollar as Washington.
Indeed, economic problems are only the tip the China iceberg floating in the North Pacific threatening all who pass in the night. Washington’s wishful thinking on Chinese help in restraining North Korea or Iran’s WMD ambitions has led nowhere; Pyongyang is an ally, for better or for worse, and Iran is not seen as an immediate Beijing strategic concern. There will be the usual clichés exchanged.
Uppermost, latest smells and sounds from the Chinese military indicate their expanding capacity for war-making is if anything picking up steam. Now there are efforts toward a blue water navy, some distance down river to be sure. But Rumsfeld’s question, toward what enemy is this militarization directed, still hangs in the air.
China’s “soft power” – its successful diplomatic maneuvering – is exaggerated. Contradictorily, they have bollicked their relationship with Japan, driving Tokyo to strengthen the U.S. alliance. The Chinese maw for raw materials has indeed become a powerful magnet for political influence. But, that, too, has limits. Brazil, for example, has already found Chinese investment promises turned into a tidal wave of cheap exports threatening its manufacturing. Chinese African maneuvering, not all that different from their Cold War efforts, is more solidly based this time: the Chinese get as much as a quarter of their rising oil imports from the Dark Continent. But Beijing, too, can only “rent” notoriously fickle, unstable African regimes. The Chinese buying spree has marginally seduced both Australia and Singapore. But that is the nature of alliances in a complex, integrated world. Behind the Southeaast Asian flirtations is the belief American power will strike the balance.
There are no historical analogies for “the rise of China”. Self-delusion about Nazi Germany’s intentions before 1939 and the World War II romance with Soviet Communism are instructive. But the world of 21st century is not mid-20th Century. Nor is there value in the babble about creating a self-fulfilling prophecy in judging China’s intentions. Regimes are not led into aggression by their potential enemies anticipating it; they go berserk for their own reasons, however tortured [pace Japan in the 1930s].
Bottom line: with Iraq and terrorism still on the U.S. plate, Washington has no choice but to but to look over its shoulder frequently at the Chinese puzzle – and long term prepare for the worst, the scenario so often befalling international relations.
Sol W. Sanders, (solsanders@cox.net),
is an Asian specialist with more than 25 years in the region, and a former correspondent
for Business Week, U.S. News & World Report and United Press International.
He writes weekly for World Tribune.com and East-Asia-Intel.com.
