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Why Let China Win the War With America?

June 22, 1997|Ross H. Munro | Ross H. Munro is co-author of "The Coming Conflict with China" (Alfred A. Knopf)

PHILADELPHIA — One by one, the old arguments for continuing China's most-favored-nation trading status are crumbling. Few still seriously argue, as both the Clinton administration and major U.S. corporations once constantly did, that trading with China will encourage the Beijing regime to ease up its political repression. In fact, the opposite has occurred. The argument, made since 1990, that assuring China easy access to the U.S. market will, in turn, lead to growing U.S. exports to the great China market lies in ruins. In reality, U.S. exports to China have been stagnating since 1995 because the Chinese regime is strengthening its trade barriers against U.S. products as part of its increasingly nationalistic economic strategy.

Instead, in its attempt to defend China's continued access to the open U.S. market, the U.S. foreign-policy establishment has now retreated to the misleading mantra "Let's not make an enemy out of China." The mantra and its implicit but clear subtext--"If we're nice to China, then China will be nice to us"--are glib formulations that appeal to the best instincts in the American character. Americans of good will would prefer to give China the benefit of the doubt and forget the old lesson that being nice to totalitarian or authoritarian regimes, particularly those with transparently anti-American agendas, has rarely if ever proved successful.

What's worse, the don't-make-an-enemy mantra amounts to a slogan that turns reality on its head. For it is China--or, more precisely, the Chinese leadership--that already views the United States as its long-term strategic adversary. This has been true since late 1993, when anti-American elements in the Beijing political and military leadership prevailed over Deng Xiaoping.

The documentary evidence is over whelming: editorials in leading official Chinese newspapers condemning U.S. "hegemony," a code word long used to describe China's onetime enemy, the Soviet Union; books and articles by Chinese military officers, both openly and secretly published, identifying the United States as China's foe; a drumbeat of anti-American propaganda in the official media aimed at the general Chinese population, and growing attacks by Chinese officials on the U.S. military presence in Asia, the key factor standing in the way of China's eventual domination of the region.

The actions of China's leaders are consistent with their words. In the past year, China has accelerated its military buildup, already the world's largest and most rapid, with a focus on building air- and naval-warfare capabilities transparently aimed at countering U.S. military forces in Asia. The fact that China, in 1994, launched a major political offensive--part public, part hidden--aimed at increasing its influence in Washington is widely accepted, however much analysts might differ on the details of China's agenda.

Most relevant to the current MFN debate is that China already effectively treats the United States as its enemy on the trade front as well. Few Americans recognize that we are in a trade war, unilaterally launched by China and that, so far, we are the losers. U.S.-China trade statistics make that painfully clear. After racking up a record trade surplus of $40 billion with the United States in 1996, China's trade surplus with us this year is projected to exceed $50 billion. Some lobbyists and analysts attempt to explain this expanding deficit as largely a reflection of distortions in U.S. trade statistics and the shifting of labor-intensive production to the mainland from such developing economies as Taiwan's. But a hard-headed analysis of Chinese economic and trade policies reveals another explanation: China has developed a labyrinth of tariff and nontariff barriers against U.S. goods and services that would make the Japanese blush.

As a result, relatively few U.S. exporters are penetrating the China market. The exceptions are producers of raw commodities and, at the other end of the economic spectrum, a few large U.S. corporations that are selling to China the high technology it needs to achieve its goal of becoming a great economic and military power. But, overall, U.S. exports to China are puny. Annually, we export more to Australia or to Belgium than we do to China. In the first four months of this year, U.S. exports to China actually declined, while China's exports to the United States continued to soar.

The most striking indicator of the lopsided trading relationship is that, for approximately every dollar's worth of exports we shipped to China in 1996, China sent five dollars' worth of exports to the United States. For the United States, that's an unfavorable ratio of 5:1. The comparable ratio with ostensibly protectionist Japan was only 1 1/2:1.

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