February 4, 2010
Google threatens to pull out of China. Washington sells arms to Taiwain. Congressional leaders urge a tougher line on China’s unfair trade policies. President Obama schedules to meet that “wolf in monk’s robes,” the Dalai Lama.
These positions deviate from the America we have come to know, pathologically nervous that a rise in tensions with Beijing would force retaliation and harm American interests.
What they signal is an awakening among American corporate and political leaders that their determination not to upset Beijing may be doing more harm than good.
Take Beijing’s manipulation of the renminbi, which may be undervalued by 40%. President Barack Obama has noted on Wednesday that it could be costing America millions of jobs at home. More broadly, the preoccupation with preserving ties with Beijing has pandered to a set of Confucian-authoritarian-communist values that run counter to America’s own – the jejune assumption being that China would bend the other way as it developed. In fact, China is growing more recalcitrant, anti-Western, and nationalistic.
Predictably the shift in ground has led to grumblings, notably in the business community, where shareholder value takes precedence over national interest. But the fears are overblown. Even if tensions between the two giants reach a point where they mar trade relations, America will find new partners and markets. It always has. And the globalized world of faster, cheaper commerce is aplenty with trade prospects that America has not fully tapped, due in no small part to its preoccupation with China.
A thaw in relations will naturally redirect America toward those prospects, and leave it much less compromised in the process. It would also draw to light an overlooked aspect of dependency in the relationship, and that is the extent to which China needs America’s marketplace and American expertise and technology to ever match America.
Not that the US should seek a breakdown in the relationship, and trying to minimize tensions is a worthy aim – but only up to a point. The degree to which it has been pursued till now has damaged American morale and competitiveness.
The new thinking seems to be that friction in the short-term may be in America’s long-term interest, and it’s high time the notion is tried on for size.