By Justin Logan

"If Washington isn’t comfortable with a more powerful China...making China wealthier by trading with it doesn’t make much sense."

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Particularly among Asia scholars, there is broad support in Washington for a pivot to Asia in general, and U.S. China policy in particular. Unfortunately, there are two central flaws in U.S. Asia policy that promise big problems for America down the road.

The first problem is that Washington cannot figure out what it wants from China. Washington supports engaging China economically, and even takes credit for China’s economic growth. According to Secretary of State Hillary Clinton, “China has prospered as part of the open and rules-based system that the United States helped to build and works to sustain.”

At the same time, Washington is ringing China with an array of bilateral alliances and partnerships, all of which are more or less anti-China. It is not paranoid for Chinese to view this as a policy of military containment. When pressed on the containment question, U.S. policy officials offer absurd responses like that from Defense Secretary Leon Panetta in June of last year. According to Panetta, the pivot “is not about containment of China.” Rather, Panetta stated, "it is about the challenge of humanitarian assistance and needs; the challenge of dealing with weapons of mass destruction that are proliferating throughout the world; and dealing with narco-trafficking, and dealing with piracy; and dealing with issues that relate to trade and how do we improve trade and how do we improve lines of communication."

Would any American accept such a rationale for China deploying 60 percent of PLAN assets to the Western Hemisphere? Dealing with humanitarian assistance and needs, stifling nuclear proliferation, suppressing narco-traffickers, and dispatching pirates do not require more than half the U.S. Navy. Even Richard Armitage, former deputy secretary of state, knows this is nonsense: “When the administration says it’s not about China, it’s all about China. China knows this.” If the success of America’s Asia policy relies on Chinese elites believing our official rationale, the policy is in trouble.

But the more basic problem is that economic engagement is working at cross purposes with military containment. If Washington isn’t comfortable with a more powerful China demanding a greater say over Asian security issues, making China wealthier by trading with it doesn’t make much sense. By the same token, if Washington supports the robust trading relationship that helps narrow the relative power gap between the two countries, why contain it, especially considering that the trading makes the containing costlier?

When I have raised these concerns with U.S. policy officials, they brush off the reasoning as crude and simplistic, but they have little response beyond that. A normal formulation is that America welcomes a “strong, responsible, and prosperous” China that plays a “constructive role” in world politics. “Responsible” and “constructive” go undefined in these responses, however, negating much of their value. Would a responsible China demand control over its sea lines of communication? Would it be constructive for China to continually escalate its demands on Taiwan for reunification?

Photo Credit: Official White House Photo (Flickr)

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    1. Errol

      Which is why Beijing shouldn't be too concerned. US forces might be beyond the horizon, but American, along with other Western businesses, are still in China. Once businesses pull out en masse, then Beijing knows something's afoot.

      Reply
      • John Chan

        @Errol,
        FDI is detrimental to China’s self-reliance, it only benefits the traitorous nouveaux compradors who suck Chinese blood and sweat for the foreign FDIs. The FDIs are welcome to leave China en masse to your nation, so please stop bashing China out of your jealousy, resentment, bitterness and fear; you only have your nation’s incompetence that can’t pull FDIs away from China to blame.
         

        Reply
        • Reason

          Wow.. JC, did you have a bad week?
          This is a particularly bile filled comment, even for you… 
           

          Reply
          • Amerikan Colonies In East Asia

            So the truth finally articulated.  The double-talk from Washington exposed.  Seems to me, the real battle or war is between West and East; Not Japan and China.  The Americans and West Europeans continue to think and behave like the colonials from their grandparents and great grandparents time.  They think the rest of the world should be under their domination and subjugation.  Not to mention being exploited to maintain their comfortable standard of living while the exploited struggles and starves, or at least, trapped in middle income dependent on Western FDIs. If Shinzo Abe is half the man I think he is, and really grasp the bigger picture as he claims, then the final Go piece may well be surrounding Amerika and West Europe, and not China and Japan, and the Koreas.  Best is, Amerika go home East of Hawaii, and leave East Asia in piece. I have no doubt the pieces will drop into place peacefully without Washington.  Truth is, if I may repeat, Washington and Brussels do not wish to see the rise of the East whereby the combined economic and military power of China, Japan and the Koreas would be greater than the US and EU combined.  Which is why S Korea is currently an Amerikan colony as is Japan.

        • angelus512

          @Oro Excellent post and very spot on. China is the only country that comes to mind that has such a precise and uncompromising delivery of statecraft. Essentially they utilize the same tactic wherein the opposite party is expected to accommodate Chinese demands/wishes in order to keep a "harmonious" relationship. Furthermore I've never witnessed a major nations senior diplomats and ministers rely upon the "hurt feelings" of its citizens as a cattle prod to encourage others to be more amenable to Chinese interests. The PRC must be living in a fantasy world where they actually drank the Kool-Aid that they are the "Middle Kingdom". I wonder if they've ever noticed that was always a label and never the reality of the situation. China has for a considerable amount of time until Nixon been a self reclused loner on the international stage. Now that they are "opening up" to the world its clear they have quite a long way to go to grasp the appropriate level of behaviour towards other nations which doesn't include A) Offering up "do as we say/ask" diplomacy B) Complaining that some comment, leader, errant flock of birds "hurt the chinese people's feelings" What a very simplistic and childlike employment of statecraft. Even the USSR knew how to conduct diplomacy despite the fact its leaders were sometimes publicly unbalanced….   Link to examples of when PRC leaders and Diplomats have used the "hurt feelings" excuse. http://chinadigitaltimes.net/space/Hurt_the_Chinese_people%E2%80%99s_feelings  

          Reply
          • ACT

            @Angelus512
            i don't see Oro Invictus' comment….what happened?
            .
            Regardless, i agree; the PRC is attempting to use the tensions over the Senkakus as a sort of political torture rack, where it increases the stretching, arm twisting and probing of the metaphorical "innards" of its opponents in the hopes that said nation will back down under the threat of war and take the "offer that cannot be refused", to reference Vic's old "Godfather" line of thinking. The problem is that this could very quickly blow up in Beijing's face; Ian Bremmer noted in an article published today that tensions are so severe that military skirmishes could break out "tomorrow".
            .
            What's more, Beijing already has a precedent to run by; remember that in 2008 when Russia invaded Georgia to aid the Ossetian separatists in Putin's apparent quest to resurrect or finlandize the remnants of the Soviet Union, the U.S did not intervene because Putin made it quite explicit that doing so would prompt a declaration of war on the U.S by Russia and a nuclear exchange. Similar threats are still being made today by Russia in response to Poland's request for interceptor missile batteries, ostensibly aimed at defeating missiles from Iran. the CPC's call to "prepare for war", then, is much along those same lines; it's both actually preparing its military for conflict as well as very loud saber brandishing, seeing as both sides have actually deployed military equipment in the region. It'll be very interesting to see how this plays out, but in my honest opinion i suspect there will actually be conflict–escalating into full scale war–within the next year; the PRC has too much to lose, and has invested too much in channeling hate against the Japanese people to let the issue drop without either resolving the issue entirely in its favor by forced diplomacy or seizing territory by conflict. In the case of conflict, i suspect that the PRC will attempt to force the U.S into a land war by giving North-Korea the go-ahead, and then by moving critical manufacturing infrastructure as far inland as possible so as to make it unreachable by U.S aircraft, as the Soviet Union did during world war II. I would also not be surprised if a general conflict between the U.S and China saw the Russian Federation attempt its own moves in eastern europe or vice versa if Russia does something stupid first.

          • John Chan

            @ACT,
            USA is thousands mile away from Asia on the other side of Pacific Ocean, and USA is thousands miles away from the Russia on the other side of the Atlantic Ocean; nobody has capability to post threat to the USA, people all of the world say No to American bombing and killing, and all of them are telling the American to go home, so why doesn’t American go home? Which part of “Yankee goes home” the American does not understand? Please don’t be such thick skin.

        • nirvana

          Déjà Vu!
          When Hitler was building his military force, there were such voices in the US for staying neutral.
           

          Reply
    2. Jean-Paul

      @ the author
       
      I couldn't agree more with the sentiments of this article, the USA is currently making a huge mistake in trading so much with China, as is the EU. Currently, western businesses are primarily responsible for the industrialization of China due to massive technology transfers. Please for the sake of the first world's manufacturing sector, bring those manufacturing jobs back to the west. If those companies all move back to the West, roughly 200 million Chinese would lose their jobs causing China's economy to totally collapse.
       
      My thinking behind this is the following; by keeping all those 200 million jobs at the mercy of western companies, NATO is effectively holding an economic shotgun to China's head. If China dared to start causing more trouble all the west would have to do is pull out all those companies and boom, China's economy is now done for. At the sametime, western 1% elites are benefiting from this situation by attaining more profits for themselves. So in effect, the trade with China serves as a benefit to the western elites and, at the same time, also gives the west massive leverage over China.

      Reply
      • John Chan

        @Jean-Paul,
        You are merely an internet troller, while the author is a pundit of an American political think tank; telling an expert wrong with your half-baked racist opinion is an insult to the author who has done hard research and objective analysis in order to present this article for the benefits of the public.
         
        FDIs are drawn into China because China provides advanced manufacturing, distribution, design and R&D at a cost advantage that no others can match. FDIs are detrimental to China’s self-reliance, they are welcome to leave en masse.
         
        On the other hand, France should watch out the shotgun at its head, years down the road, boom, French is a land of saber and Koran.

        Reply
        • Jean-Paul

          @ John Chan
           
          It seems like you have a racist superiority complex that will cause the downfall of the Chinese as China is not the only country that can provide advanced manufacturing at a low cost. For example Indonesia and India can both provide advanced manufacturing that can easily match China's for an even lower cost. All the great west has to do is provide them with technology transfers and investment that is needed to develop their industry.
           
          This is beside the point I was trying to make anyway, the first world nations are more than capable of manufacturing anything that China can themselves, albeit at a higher cost. However this higher cost will be offset by the increase in employment and overall growth, unfortunately the 1% elites will also experience a decrease in profits which is why it is unlikely to happen.
           

          Reply
          • John Chan

            @Jean-Paul,
            The FDIs exist to make money, they have no loyalty to anybody, they can come and go as they please; the point you need to get into your head is to stop behaving like a loyal lackey to those greedy capitalists (the core of the West) and glossing over their crimes of exploitation with specious excuses.
             
            You are proven you have no sense of commerce, no wonder the West is declining because too many of people like you hogging on out-of-date concept, past glory, refusing to face the reality and compete.
             
            “The West won the world not by the superiority of its ideas or values or religion but rather by its superiority in applying organized violence. Westerners often forget this fact, non-Westerners never do.”  –  Samuel P. Huntington
             
            Your assertion of the Western superiority is counterproductive, it only makes the West more ugly; the West’s bad behaviour since WWII just reinforce their ugliness.
             
             

          • ACT

            John Chan: “The West won the world not by the superiority of its ideas or values or religion but rather by its superiority in applying organized violence. Westerners often forget this fact, non-Westerners never do.”  –  Samuel P. Huntington
             
            Your assertion of the Western superiority is counterproductive, it only makes the West more ugly; the West’s bad behaviour since WWII just reinforce their ugliness. but this by no means legitimizes the same behavior on the part of the PRC, which has, since its birth, been the foremost expert on the application of violence and threats to shape public opinion, annex–or attempt the annexation of–its neighbors, and pressure others into ceding territory that never belonged to China in the first place.

          • John Chan

            @ACT,
            You have been living in the West’s manufactured consensus far too long; the West’s manufactured consensus is a Cold War product to convert the world into a caste system society, and they want to be the Brahmins.
             
            You are a poor apologist for the West’s ugliness.

        • Stephen

          @John Chan,
          You are obviously a member of China's 50 cent party. Statement of fact: China only wants to build so that it can seek justice for perceived mistreatments in the past and are single minded in the goal to achieve this revenge economically until such time that it can use its ill gotten gains to fund a War against America.

          China places huge taxes or tariffs on foreign consumer goods sold in China. There is no downside to derailing the China train through the same strong tariffs on imported Chinese goods. We have to start doing things that make economic sense because feeding China's rise is creating feeding this dangerous nationalism and march to war  more than any other factor.

          America needs to take a tough love approach with China to correct the course of the relationship and the messages need to be clear in the form of tariffs.

          Reply
          • Phunsukh Wangdu

            Your statement is like a Military GPS about +/- 40m from actual location. "China only wants to build so that it can seek justice for perceived mistreatments in the past and are single minded in the goal to achieve this revenge economically until such time that it can use its ill gotten gains to fund a War against America." I have been witnessing this kind of attitude ever since… nah. But anyway….. Is it really  Chinese  to be vengeful and bitter? I have noticed this with some of my relatives and I find it  hard to actually change their mentality through constructive discussions.

      • Anon

        To dispel your disinformation that China is taking jobs away from the US, here's the REALITY.
        http://www.frbsf.org/publications/economics/letter/2011/el2011-25.html
        Report  – The U.S. Content of “Made in China”
        By Galina Hale and Bart Hobijn
        August 8, 2011
        Share of spending on “Made in China”
        Although globalization is widely recognized these days, the U.S. economy actually remains relatively closed. The vast majority of goods and services sold in the United States is produced here. In 2010, imports were about 16% of U.S. GDP. Imports from China amounted to 2.5% of GDP.
        A total of 88.5% of U.S. consumer spending is on items made in the United States. This is largely because services, which make up about two-thirds of spending, are mainly produced locally. The market share of foreign goods is highest in durables, which include cars and electronics. Two-thirds of U.S. durables consumption goes for goods labeled “Made in the USA,” while the other third goes for goods made abroad. Chinese goods account for 2.7% of U.S. PCE, about one-quarter of the 11.5% foreign share….Of the 2.7% of U.S. consumer purchases going to goods labeled “Made in China,” only 1.2% actually represents China-produced content.

        Reply
        • Anon

          So of the total the US Personal Consumption Expenditure, 2.7%  is LABELED Made In China, and of this, ONLY 1.9% represents actual China-produced contents. That's 2 cents out of $1 – yeah, the Chinese stole so many jobs from Americans!! 88.5% is spent on US produced goods and services, and 16% on imports, of which ONLY 1.9% are truly Produced in China! Can't believe the amount of propaganda and disinfomration out there manipulating public opinion.

          Reply
          • ACT

            @anon
            most of China's income is due to interest on loans, but  significant amount of it comes from exports to the U.S and Europe, of which it is the largest supplier. Oh, and with the increasingly hostile environment in China, many companies are actually shipping jobs back to the U.S, or so said the december issue of Atlantic Monthly, since trade and transportation prices have risen to the point–as have wages in host countries–to the point that any profit made in otherwise manufacturing overseas has effectively been lost; many financial specialists, according to AM, now admit that the outsourcing deal was just a fad, and many jumped on the bandwagon just because everyone else was doing it…..well, in the process they managed to hollow out their primary customer base… 
            Data cannot be changed, Anon, but it can be manipulated and skewed in such a fashion as to suit the personal objectives of the presenter. You appear to be at least somewhat guilty of this, in which case i might ask, what is your ultimate objective? if you do indeed desire a multipolar world, i might ask how the thought of Russia, China and the U.S not being able to restrain each other could possibly improve global welfare, seeing–or rather, looking back on history and knowing–what Russia (read: Putin) and China intend for their respective backyards. If your goal is to be the proponent of an anyone-other-than-America-world-order, i would point you towards the poverty and desolation that was revealed in Eastern Germany after the fall of the Berlin Wall; if your goal is the promotion of a Sino-centric world order, i ask only that you look at a history book and a collection of rhetoric from the leaders of the PRC to understand what Asia would become, and what would remain of the Japanese after a few decades. If it's neither of those two, then i gladly nominate Canada, as the next world leader, as they seem to get along with everyone else swimmingly.

          • Anon

            @ACT Then good luck finding Americans who will make a T-shirt for 20 cents, or Americans should get used to paying $100 for a T-shirt at Wal-Mart now. Hope it hasn't escaped you that paying $100 for a T-shirt or $500 for a pair of sneakers means a drastic drop in the standard of living for the majority, the 99%.
             
            Instead of accusing me of "manipulation", how about showing some EVIDENCE? Looks like you're the one playing games here – talk is cheap, opinions are simply your subjective thoughts, let's have the TRUTH out. I am quoting from a report by the Federal Reserve of San Francisco, if you have reliable contradictory data that undermine those, then let's see them.
             
            Describing a Multi-polar World as chaotic, poor, etc. isn't sufficient – I'd like to see some LEGITIMATE BASIS to argue for a Unipolar Wolrd, or how having the US traversing vast oceans to bomb, invade, subvert and torture peoples of the world and play mischief in Russia and China's backyard is somehow a good thing for these and other *SOVEREIGN* nations. 

    3. Michael Turton

      There's a backstory here. What Logan and his partner Ted Carpenter usually argue is that our allies in Asia, especially Taiwan, should be sold out. In their own publications they are more open about this. This piece here is just a new and more subtle approach to that same basic argument. Logan knows perfectly well that the other Asian states are collectively too small to balance China and that they can't balance China because they are squabbling amongst themselves and too poor. For example, in the South China Sea, which China claims in its entirety, the small nations facing China have tiny navies — Philippines has no real navy at all — and they all have overlapping claims to the islands in the area. The US presence helps hold the prospect of war down. 
      For the moment.
      Michael
       

      Reply
      • ACT

        @Michael Turton
        i think the Washington Times, which published an article on this yesterday, had it correctly; the CPC is–emotionally and mentally–preparing its people for war, and it is rapidly speeding up the appropriate training. This suggests, to me, that within this year the PLA will attempt something that they expect will bring down the wrath of the U.S on them. This, unsurprisingly, comes during a period where they are completely unable to make any headway whatsoever on the forcing of a diplomatic resolution in their favor. So, the CPC is perhaps correctly realizing that the only way they will make themselves great again is through war, and this rather conveniently explains the ever more shrill propaganda that paints Japan and the U.S as cold-war-style aggressors and demons.

        Reply
      • Drive by

        The island problem and the Taiwan problem are connected. China can wait to solve both problems at once. There are no real reasons for war now.
        As for American's contradiction in its political and economical policies, the problem is unsolvable, because the business elites won't care about their government's political decisions.
         

        Reply
      • t_co

        "Sold out" is a pair of weasel words.  An alliance is not a marriage.  Neither side has exchanged vows.  Instead, they've exchanged treaties–whose terms can and should be renegotiated.  And if the other side isn't willing to accede to American interests, the alliance should be ditched.  Having Japan, South Korea, Taiwan, and the Philippines free ride off American defense spending in perpetuity is most definitely not in America's interest.
        What's more, what exactly is the harm of smaller Asian states aligning towards Beijing rather than Washington?  They are, after all, much, much closer to China than they are to the United States.  Maybe the root problem here isn't Chinese expansionism so much as a stubborn insistence by our policymakers in New York and Washington that the US needs to spend blood and treasure preserving the status quo among countries half a world away.
        There's not even that much oil at stake in South China Sea, and once fracking matures in the US, why would we need to bother at all?

        Reply
    4. John Chan

      “American is in the business of imperialism, not in the business of charity,” therefore it is wrong for the author to credit the USA for China’s achievement; USA not only imposes embargo and trade barrier to hamper China’s natural growth, and it also coerces other nations to harm China’s peaceful rise too.
       
      USA is an oligarch state, oligarchies work for their own greedy needs, “America’s Pivot: One Big Contradiction” is just the result of the competing interests of those oligarchies. Posting questions to the US policy officials and forcing them to reveal this embarrassing truth is impolite and not fit-in of American elite culture, brushed off crudely should be expected.
       
      How can the USA Asia policy not in trouble by appointing a me me woman as the Secretary of State? Does the American really believe American Exceptionalism? Doesn’t the American know ”you rip what you sow?”

      Reply
      • Reason

        Equally: does the CPC not know they reap what they sow?
        Things are slowly coming to a head now.
        Both systems are flawed, but when the time comes, what will matter is how much the people of the world believe in their governments and unfortunately, are prepared to die for their governments.
        One of these systems is riding on hot air at the moment.  Time will tell which one it is.
         

        Reply
        • John Chan

          @Reason,
          True enough, through its long history, China knows that nobody can stay on top forever. So the question is why can’t the West and its allies (the Westpac) let the nature takes it course? Why can’t the Westpac let China rise peacefully? Why does the Westpac insist on demonizing China relentlessly?

          Reply
          • ImperiumVita

            For the exact same reason people like you demonize the USA relentlessly.

          • ACT

            @John Chan
            "why can't the west let China rise peacefully". Oh, i don't know, perhaps that's because the right hand knows not what the left does? Perhaps i should make that more clear; it's because entirely to the contrary, China's rise or, perhaps i should say–let's not mince words here–attempt to return China to its "former imperial glory" is anything but peaceful, accomplished not through a diplomacy of equals but through no small amount of arm-twisting, jingoism, blatant political pressuring and outright threats of war. China has not once negotiated in good faith over the past 33 years: it has lied, deceived, obfuscated, stolen, bribed and threatened its way to regional predominance, and now that it cannot get its way through those means, it gears up for actual war.

          • John Chan

            @ACT,
            You are not here for an honest debate, you are here to earn credits for the diploma of the Dick Cheney School of Imperialism.

          • John Chan

            @ImperiumVita,
            USA’s bombing and killing all over the world on imaginary evidence is fact; USA massed lethal weapons and military bases to harass China and other nations is fact; USA creates local laws to interfere other nation’s internal affairs is fact, the 1% steals the 99%’s life savings is fact, the Wall Street greedy crashed the world economy and caused hundreds of millions people lost jobs is fact, …
             
            Considering reminding the USA’s wrong doings as demonization, you surely are a classic grads of Dick Cheney School of Imperialism and true believer of the American Exceptionalism fallacy.

          • ACT

            @John Chan
            i don't remember receiving an invitation from that school , nor do i remember applying to it. if you can furnish the relevant documents, i might entertain your notion for more than half a second.

          • UAE citizen

            @ John Chan
             
            OK John Chan, I'm going to have to say, your trolling on this site has now reached a legendary status. There are so many rational, respectful posters on this site hitting you with all sorts of insightful and peace-promoting posts yet you continue to troll. ACT, nirvana, Oro invictus, angelus, Jean-Paul etc….. are all trying to help China become a better member of the international community. They are not trying to demonize China but teach China how to behave peacefully.
             
            I would like your opinion John Chan, which nations in the world do you think are currently the biggest threat to world peace? I'll give you my five top nations right now:
             
            #1. China
            #2. Russia
            #3. North Korea
            #4. Iran
            #5. Pakistan

      • Stephen

        China is at the top of the list for greedy needs, John and their rise is anything but peaceful. Peaceful nations negotiate through their problems they don't threaten other nations with war.
        You are a little behind on your propaganda position or maybe you haven't heard that you are preparing for a war.

        China wants western nations to fear it but by promoting fear China reveals herself to be an enemy of the West (An enemy of the whole West, John. Not just America). At the end of the day all Western nations will oppose these threats and China despite its vast number of people or weapons will find itself isolated and declining as a result.
        Its a miss calculation on the part of China that any Western nation will tolerate China's Carrot and Stick approach to foreign affairs.
        China's wealth was bought and paid for by others because the west wanted to give China a chance to end the isolation and become a responsible partner in the international community.
        But China abused the opportunity and is a single battle away from having the WTO membership revoked resulting in economic isolation.
        Not sure if you realize this but you may even loose your job as a member of the 50 cent party if the global community cuts the Internet lines connecting China.
        Your rants against America are not wasted they provide true insight into the mentality of the Chinese communist party.

        Reply
      • tsunami

        I'm tired of this propaganda!
        Write something new, will you?

        Reply
    5. DN

      This is a refreshing article, kudos to the author for pointing out the elephant in the room. I invite the author to consider exploring the conditions that sustains this contradiction in a future article.
       
      As a lay man I have an unfounded belief that these contradictions exists because of strategic inertia when changing strategic direction with respect to China by the West.
       
      It seems people still cling onto the hope that China will Westernise politically, as it got richer by being integrated into the current US world order, despite mounting evidence to the contrary.
       
      The economic engagement and military containment is a strategic half-step because the Western mindshift is not complete. Perhaps China can provide the needed nudge to complete the mindshift by behaving badly.

      Reply
    6. tocharian

      On the whole, America is to be blamed for China's rise. There are various other factors, but the naivité and arrogance of US politicians like Nixon and Kissinger who were so intent on beating up the Russian communists that they thought they can "use and manipulate" China for that purpose, together with the short-sighted greediness of US businessmen on Wall Street (and Wal-Mart consumers) were the main causes of "China's Rise". I interpret Deng Xioaping's famous quote about the colour of the cat as follows: in order for China to become a "superpower" it has to go through an economic and technological "Great Leap Forward". Deng wanted technology transfer from the West. Russian communism wasn't helping the Chinese economy too much in those days (except for introducing ballet!) Well, in the 90's, many people in the West were so naive. All they were thinking was how to make a "quick buck" out of the huge Chinese market and labour force, but the Chinese think more strategically and in China, there is no division of State and Business. Look, who's got the money now. Money wasn't even the main goal for China. What they really wanted was technology transfer and they got it big time (through offering cheap labour) from the US and nowadays from Europe (Germany). Perhaps they would have gotten that by hook or by crook (industrial espionage) someday anyway, but the faulty economic and political decisions made in the West expedited those Chinese goals. We will have to wait and see what the economic, political and environmental effects of "China's rise" will be for the rest of the world. After giving away valuable and fundamental know-how and technology for short term gains, it is hard for the capitalists in the West to complain that the Chinese are now capable of cloning (reverse engineering) any high-tech product (stealth fighters, DF-21D's). In fact, China has the cash now and can easily buy off technology from high-tech Western (especially German) companies and natural resources (energy and minerals) from the Third World and Canada. In a strange twist, Chinese Communist Party is proving to be much more efficient at running a "Capitalist State" than the parochial partisan politicians in the US. The impact of China's rise is "worrisome" not just for Americans, but also for many other people in the rest of the world, but I have always have the naive view that creative and intelligent human beings are always attracted towards an open and flexible society and the question now is whether Western societies will dig deeper into their souls to see what they really are made of (beyond superficial "profit metrics" as defined by Wall Street) and whether China will become a more open and democratic society.

      Reply
      • David

        I gotta agree with you there, the CPC has proven itself to be much more resilient and much more efficient at running a "Market Socialist/Capitalist" State (or whatever they call their system) than the Americans had hoped for. However, China is still a poor country, and when your poor you care more about who's going to put food on your table than you do about Democracy. While I do agree that creative and intelligent people generally want a more open and flexible society, that reality is too far into the future for it to be of any use when it comes to dealing with China. Even if China does eventually democratize it will most likely be through the Party's guidance. The collapse of the Soviet Union weighs heavily on their minds and I firmly belief that they would do anything (no matter how horrible) to avoid any scenario that leads to the dissolution and economic collapse of the PRC.
        The CPC is full of the "ends justify the means/greater good" type of people, so any Gorbachev-style reforms would never be implemented. The vast majority of Russians regret the collapse of the Soviet Union, I'm sure the CPC believes that the Chinese would eventually regret a similar-type collapse as well. Just like Russia in the 90's and 00's, China will never become as open and democratic as the US expects (because frankly they could care less). The Americans however, have a far greater economic presence in China than they ever did in the Soviet Union and they would certainly profit from the wildly corrupt and under priced privatizations of SOE's that would inevitably follow liberalization. They would also certainly take advantage of the chaos to permanently separate Taiwan from the mainland and surround China with military bases in any breakaway republic or China-friendly nation.

        Reply
    7. Anon

      So here's the reality – Americans complain incessantly about cheap junk from China and losing their manufacturing jobs to the Chinese, but in reality, only 2% of what they spend go to China. The rest profits DOMESTIC goods and service providers. Survey the "Made in China junk" around you, you only paid the Chinese $2 out of every $100 spent. The rest goes mostly to profit American corporations and American workers. This the ONLY reason why all the MNCs are in China, not because China is making obscene profit, but because *THEY* are.

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    8. Bankotsu

      "This is exactly wrong. Japan needs the United States far more than Washington needs Tokyo."
      But one of the key goals of U.S policy in asia is to contain Japan. It is not about Japan needing U.S or U.S needing Japan, but that U.S policy is about containing and controlling the security policies of Japan.
      Why America thinks it must lead the world
      http://www.theatlantic.com/past/docs/issues/96jun/schwarz/schwarz.htm
      http://www.newamerica.net/publications/articles/2007/beyond_american_hegemony_5381
       

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    9. Genghis

      If the old, matured, bankrupted economies still think they are gold gilded, please look in the mirror.
      With the exception of the hard working German, all the others are in the gutters…high debt, high unemployment, ageing society, decaying infrastructures and no monies for your pensions and health cares!!!!
      No wonder, all you wood worms are crawling out and trying your best to write and exaggerate all these negativity about us Chinese…..Do we care, no man, pity you poor buggers!
      Do we need your market? Yes, ten years old, not now, cos you peoples are totally broke and do not have any monies. China can sell to Asian countries, to Africa, the Middle East and to South America instead, so go figure!
       

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    10. Bankotsu

      Key thing for the U.S is for their ruling elites to adjust their mentality to the changing times. The old ways of the unipolar world is ending. I think it will take another 2 decades of economic decline before U.S can really change their picture of where they stand in the world. It's going to be a rough 2 decades in global politics as the U.S might leash out irrationally like it did in Iraq.

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    11. Me me me

      China should be more concerned with domestic issues rather than were America chooses to waste its money.

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    12. Vulgor Schnecke

      Im not sure where all this talk of US FDI in China is coming from.  The US only accounted for about 10% off the total FDI in China in 2010 (thats the data i have, not sure bout 2012). During the financial crisis, the total FDI into China plummeted by more than 30%, yet China weathered the storm quite well, therefore I dont think that it would be such a big deal for China if the US withdrew all its FDI(still a deal nonetheless).
      People shouldnt forget, it's not only China that is benefitting from trade, heck, whats the point of trade if only one side beneftis from it. We live in  market economy where we produce and sell, where people buy and sell. The US and other countries like Japan and German produce high quality goods that are also expensive, however you can only stay as more expensive as your products are better, otherwise you will be less and less able  compete on the global market. As much as China needs FDI and technology transfer, the US needs cheap goods too. And where do a lot of those goods come from? China. Just ask Apple. (The same goes for Europe). Imagine what the public will feel like once those TV's, clothes, shoes or whatever goods you can think of than come from China suddenly cost 30% more…….

      Reply

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