Negotiating with China the only sensible option for US
Demonizing China has become boring and prone to ridicule
In his May 26 statement on China policy, US Secretary of State Antony Blinken lamented that China had the intent to reshape the global order and increasingly acquiring the economic, diplomatic, military and technological means to do so.
Whether China has ever intended to reshape the global order is unclear, but the Asian power indeed never intended to live by the rules of the post-World War II order set by the US and its Western allies. Why should it? Those rules were set by and for the US in particular and the West in general, after all.
Case in point is the post-WWII trade and investment rules. During the Kennedy and Tokyo Rounds of Negotiations under the General Agreement on Tariffs and Trade (GATT), non-tariff trade barriers (NTBs) restricting imports for national-security reasons, for example, were drafted without any input from the developing nations.
The US government has used NTBs indiscriminately whenever it felt domestic industries were at risk of losing market share or dominance. Of this, the classic example was former US president Donald Trump banning Chinese companies Huawei and ZTE from entering the US market. He also pressured US allies to do the same.
The fact that there was no evidence to support his claim that these companies’ products endangered national security did not matter. The speculation that the Chinese government could use such products to infiltrate the US government and businesses was enough. Fearmongering is a strong factor in influencing human behavior because few if any want to take chances with respect to their well-being.
From this perspective, one can argue that banning Huawei and other Chinese technology companies from the US and its allies was simply a ploy to stifle the Asian country’s technological progress and had nothing to do with national security.
In all the years that US and other Western countries used Huawei products, there was zero evidence that China had ever used them as a “back door” to access US government or corporate secrets.
One could also argue that the US was accusing China for what America itself was doing – reshaping the world to its image. Adopting US ideals and values as conditions for aid and loans and sanctioning those that did not toe its line were clear examples of economic and geopolitical coercion to shape the world order in its image.
For instance, President Joe Biden’s “Build Back Better” and “democracy versus autocracy” slogans were clearly intended to shape the world in America’s image. The difference between Biden and his predecessors was that he openly called for recruiting “like-minded” countries to join in the fight against China, knowing that he could not do it alone.
Biden will not succeed
However, history and China’s growing power trajectory suggest that Biden’s efforts to stifle China’s rise will not succeed. Trump’s tariffs on Chinese goods backfired: Instead of reducing the trade deficit and bringing manufacturing home, the excise taxes not only had the opposite effect but also exacerbated the inflationary spiral.
So if the US government has not been able to stifle China’s rise up to now, it will be considerably more difficult to do so in the future. Judging from US media and intelligence reports, China’s economic, technological and military prowess are growing by the day. In spite of the “doom and gloom” picture that some Western analysts painted for China’s economy, it is poised to grow by around 5% in 2022.
Moreover, the Chinese central bank and government are easing monetary and fiscal policies to help those business affected by the Covid-19 pandemic and to encourage investment. The central government, for example, is reducing the tax burden for small businesses.
In addition to exploiting the domestic market, the Chinese government also expanded its Belt and Road Initiative, increasing trade and investment opportunities in the growing number of participating countries, estimated at nearly 100 in 2021.
Between 2013 and 2021, accumulated trade between China and the participating countries exceeded US$10 trillion, according to Chinese customs statistics. US-based Statista estimated Chinese investment in the BRI was approaching $900 billion in the same period.
So why would any country want to discard the opportunities that China offered and jump over to join the US against it? Chinese trade and investment had indeed benefited the BRI participants and other countries across the world.
Alternative to US belligerence
The US has to do more than labeling China as an “economic cheat” and a host of other names. Demonizing China has, in fact, become boring and prone to ridicule. Many countries (Sri Lanka, Solomon Islands and others) are telling the US to mind its own business when dealing with China.
The fact of the matter is than many so-called American “allies” are not on the same page as the US government on China. They might be wary of China’s rise or have an ax to grind with it, but the communist power is their economic lifeline. Staunch allies like Japan and South Korea, for example, sell more than a quarter of their exports to China. Equally noteworthy is that those two countries would be targeted in the event of a US-China war.
Furthermore, China has never committed a fraction of the misdeeds that the US has accused it of. Instead punishing the debtor nations for payment defaults, Chinese creditors have rolled over loans, as witnessed in Sri Lanka and Pakistan. In fact, the recipients of Chinese loans and investments will tell that China is preferred over the International Monetary Fund and World Bank as a lender and investor.
This explains why China has made inroads in winning the hearts and minds of many developing nations in Asia, Africa, and Latin America. For example, many countries – Solomon Islands, Samoa, etc – in the South Pacific are signing economic and security cooperation agreements with China in spite of fierce opposition from the US, Australia, New Zealand and Japan.
The US administration’s efforts to turn the Quadrilateral Security Dialogue into an “Asian NATO” or using the Indo-Pacific Economic Framework for Prosperity (IPEF) to contain China may not get off the launch pad for similar reasons. Asian nations are quite content with having China as a trade partner and investor. They don’t want to choose sides. The prospect of a US-China on their turf is not appetizing either.
Another reason the US and its allies will not succeed in stifling the dragon’s rise is China’s growing economic, technological, diplomatic and military clout. Destroying a country of 1.4 billion people with nuclear weapons cannot be fulfilled without unthinkable losses of human lives and properties. Will that be acceptable collateral damage to the American and its allies’ citizens over a perceived threat? Probably not.
All said and done, tough talk and deeds will not deter China’s rise. Dialogue to address the differences between the US and China is therefore a sensible, if not the only, option.
Ken Moak taught economic theory, public policy and globalization at university level for 33 years. He co-authored a book titled China’s Economic Rise and Its Global Impact in 2015. His second book, Developed Nations and the Economic Impact of Globalization, was published by Palgrave McMillan Springer.