The dramatic events surrounding Chinese dissident Chen Guancheng is the most recent spotlight to shine on the relationship between the United States and China. Words and phrases like; delicate, complex, careful negotiations, problematic and troubling, are all used to describe this relationship. True that some of the same words and phrases have been used to describe our relationship with other communist countries over the years. But even relative to the old Soviet Union; there are more levels and undercurrents involved in our relation with China than there ever is or was with any other nation.
Just look at dissident defections. Many dissidents, from intellectuals, to ballet dancers, to high ranking KGB official from the former Soviet Union have escaped, sought and received refuge in the US. Any old Cuban who lands one dry foot in the US is automatically given asylum; and we don’t even speak to Cuba. But when a blind Chinese dissident escapes house arrest, overcomes a whole range of obstacles and makes it to the US embassy; there are delicate negotiations, problematic decisions, potential repercussions, etc. involved with his being given safe harbor by the nation that claims to be (and often truly is) the very beacon of political freedom the world over.
Why are there such problems even in what appear to be the most straight forward situations when it comes to China? How does the protection or lack thereof for one dissident become one of the greatest diplomatic challenges in the US and China’s recent history? The simple answer is; money. Call it trade relations, the amount of US debt, US dependency on China for critical materials or any other way of describing it; it comes down to money. Or more specifically the ability for some US owned economic entities to make money by doing business with China and the terms upon which China will do business with them.
Normally trade is a pretty straight forward matter. We have something the other country wants and they have something we want; so we trade. Sometimes it’s raw materials for finished goods. Sometimes it’s finished goods for cash, either from us to them or them to us. But with China the whole process has become considerably more complicated by the addition of the huge amount of debt the US owes to China. China has been acquiring much of the huge amount of debt the US has generated during our current ten year binge of deficit spending. From a balanced budget in 2000, the US has, by deficit spending caused by unbalancing the budget through tax breaks for the wealthiest Americans, wars waged without tax increases, huge sweetheart deals with Big Pharma, and dozens of other costly and corrupt corporate welfare scams; created enormous debt. This debt is primarily held by China as a result in our also enormous negative balance of trade situation with China. We buy from China much of what they make, but they buy from the US very little of what we make; creating a negative balance of trade in their favor to the tune of tens of billions of dollars annually. Our trade deficit with China funds the ability of China to acquire a load of the US deficit spending created debt.
A few (nominally) American companies are making money during this trade deficit situation; at least until the Chinese master the technology we have brought to their country. And it is the fear of when (not if) they expropriate the US investment in China plus the fear of China either no longer buying or perhaps even calling in our debt that gives them the perceived massive economic clout that results in the extensive political pressure they are capable of wielding in dealing with the US every day and also in cases such as that of Chen Guancheng.
In short, significant American commercial interests are de facto controlled by China; and these interests exert their considerable influence on US politics through their now unlimited ability to fund, thus elect, politicians who will do their bidding in Washington. The economic power (money) that China has over events in the US is the source of the fear that makes the relationship between our two countries so problematic.
But does it have to be this way? Not really. A few voices were raised in warning about the potential for negative consequences at the very earliest stages of the US political and ultimate economic commitment to the concept of new world globalization development. But just because these warnings about how things would develop were ignored; doesn’t mean we must continue down that inevitably disastrous path. We can change our trade policies, our economic entanglements and any other aspect of our relationship with China that is troubling, problematic or compromising. Granted there will be some economic cost; but most of that will be borne by the corporate entities that have so far benefitted from this relationship. Their fear of economic loss does not have to be a fear shared by the American people; as much as they might try to convince us that it should be. In fact leveling the playing field with China can be a huge positive economic gain for the vast majority of Americans.
The losses will be by those who ran out on their responsibility as corporate citizens; by sending American jobs to China due to the lure of cheap slave labor and virtually no environmental responsibility; by avoiding, thus evading, paying US taxes on their profits while still enjoying all the comforts and protections of US individual and corporate citizenship; by financing politicians who incurred our enormous debt in part to cloud the need for higher taxes on the wealthy and in part to create the economic leverage their Chinese partners exert on US trade policy.
Leveling the playing field through appropriate trade restrictions will enable real American industry to rebuild itself and rehire American workers. That will in turn increase domestic spending and consumption to further increase American production of useful goods and services. America invented the wheel of the modern industry, mass production, 20th and 21st century communications technology and most of the other benefits of a developed industrial society. The benefits, which were a partnership between the government elected by the citizens of this country and private corporations include the concepts of; reasonable work hours and conditions; worker health care coverage; retirement plans; responsible environmental production processes, etc. All of this benefited corporate ownership and management, our growing middle class’ ability to invest in American businesses and American workers at all levels.
Allowing an unlevel playing field subjected our industrial base to unfair, often malicious, foreign nation subsidized competition which was designed to undercut some of our key industries’ ability to profit in order to eliminate them and eventually dominate these markets. Allowing these unfair trade practices doomed the steel, high tech electronics and communication, textile, most consumer products and many other industries in which we used to lead the world in production and export. Not only has this reduced our ability to generate real wealth through the creation of high value added products; but it has also made the US dependent on foreign and adversarial countries for some of the key products necessary for our national security and defense. This dependence is true national vulnerability that the US cannot allow to stand; because it potentially threatens our sustainability as an independent nation.
Protecting America’s ability to be a truly self sufficient country in terms of being able to produce or manufacture all the key products required for national security and defense is unquestionable responsibility of our Federal governmental. Fortunately the Federal government can enact all the necessary laws and regulations required to create the protection our industrial base needed to allow it to rebuild it capabilities. The same national responsibility applies to the rebuilding and replacing of our long neglected infrastructure of roads and bridges. The all but decrepit national electric power grid and developing new clean energy electrical production abilities is also part of the Federal government’s purview and well within its ability to accomplish through legislation and appropriate incentive creation and public-private partnerships.
Protectionism of, by and for the people of the US is not a bad or wrong thing. Trade policies that prevent the draining of our essential and critical industrial capabilities is in fact a good and necessary thing for our Federal government to do if we as a nation are to continue to provide ourselves with the opportunity to live and achieve what we have created as the American dream.
Absent a firm commitment to right the wrongs of our recent global/political/economic errors; we run the risk of failing victims to the ravages of economic predation that a handful of multinational entities have embarked on against our way of life and standard of living. We still have the means and the resources to beat back the forces of the new world order of neo-feudalism some would impose on us; if we have the will. Every time America has faced the threat of the loss of the singularly unique democracy we have invented and established; we have found the will to prevail and overcome the threat. From the revolution against a monarchy, to the civil war against domestic enslavement, the fights against world domination by feudalistic monarchies in WWI, madmen committing genocide like Hitler, aggressively atavistic totalitarian regimes like the Soviet Union; the US has stood up for freedom and individual rights. We have fought the worst of what the political and economic dictators have tried to do and beaten them to preserve our values against their greed. We can do so again!
China may have a billion slave laborers, trillions of dollars of IOUs deceptively acquired through unfair trade practices and a few rich businessmen who call themselves Americans working for them; but they can’t be self sufficient or eat IOU’s. They and their American business pawns need us; but we actually don’t need them. In no time at all we can ramp up to produce all our own everything from IPods to steel. US has the experience, inventiveness, knowledge, skill and most importantly the spirit of a free people to overcome our adversaries and protect, defend and preserve what we have created. And that’s why, to expand on FDR’s most famous quote; we don’t have to fear China.