The United States Can Benefit from China’s Rise

World Policy Journal (December 10, 2012)

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Now is the time to rethink America’s policy toward China. The United States can benefit economically from China’s rise, strengthen Chinese advocates of human rights and democracy, and avoid a new Cold War. We urgently need a national debate about U.S.–China policy to prevent doing permanent damage to American interests in Asia.

Fortunately, this is a propitious period to have that debate. In the United States, President Barack Obama will shortly embark on his second term in office, so will be able to guide American foreign policy without the ever-present political pressures of a re-election campaign.

In China, a new generation of leaders are coming to power with a mandate to address the country’s daunting domestic challenges—including corruption and cronyism within the Chinese Communist Party (CCP), environmental degradation, frequent “mass incidents” of social unrest, inflation, and glaring social inequalities.

The leaders who take office in March—including President Xi Jinping and Premier Li Keqiang—know firsthand some of the worst excesses of the CCP. They were victims of Mao’s Great Proletarian Cultural Revolution, when an entire generation of young people—many from prominent families—were “sent down” to rural areas to perform backbreaking manual labor for years.

Having experienced and survived the widespread human rights abuses that occurred between 1966 and 1976, the year of Mao’s death, China’s new leadership will be more receptive to calls for political reform from the country’s middle class and liberal intellectuals, who are highly critical of increasing corruption and cronyism within the CCCP.

China’s new leaders will welcome overtures from the United States that aim to assist China in meeting its challenges. But harsh American trade measures or heightened military pressure will likely be met with a tough response, as the new leaders seek to prove their mettle and their capability to defend China’s national interests.

Increased tensions with China could have dire consequences. They could lead to a military conflict over Taiwan’s political status, over whether Japan or China holds sovereignty to a group of uninhabitable islands and offshore energy resources in the East China Sea or over the ownership of small islands and energy resources in the South China Sea. In a worst case scenario, those conflicts could escalate, by accident or by design, to a nuclear exchange.

It is essential to remember that China’s rise strengthens America’s economy and future prosperity. Today, China is the largest growth market in the world for U.S. goods and services. Trade with China, America’s third-largest export market and the leading market for U.S. agricultural products, has helped America’s recovery from the global financial crisis.

From 2000 to 2011, U.S. exports to China increased by approximately 640 percent, from about $16 billion to $104 billion. During this period, American exports to China grew seven times faster than U.S. exports to all other countries in the world except for Canada and Mexico.

As Treasury Secretary Timothy Geithner has pointed out, these exports “are supporting hundreds of thousands of jobs across the nation in all sectors—from high technology to soybeans, aircraft to autos and forklifts to financial services.” The United States and China, as Geithner puts it, “have a great deal invested in each other’s success.”

Looking to the future, the U.S. stands to benefit from billions of dollars of Chinese investment that will reduce production costs for American companies and prices for American consumers, enhance consumer welfare, spur the development of innovative products and, most importantly, result in “in sourcing”—the creation of hundreds of thousands more American jobs.

By successfully negotiating a bilateral U.S.-China free trade agreement and supporting China’s membership in the Trans-Pacific Partnership, the regional free trade area of the Asian Pacific, the U.S. will stimulate unprecedented levels of international trade and investment. These agreements will eliminate tariff and non-tariff trade barriers to American goods and services, achieve far greater transparency in China’s regulatory practices, and enable the United States to benefit from the economic dynamism of Asia—the new “engine” of global growth.

Improving relations between Washington and Beijing will not only spur American prosperity. It will also strengthen the advocates of human rights and democracy within China while advancing the core foreign policy objective of promoting American political values overseas.

Right now, increased American military pressure on China aids the CCP. All too often, China’s leaders use the “U.S. threat” to justify draconian security measures at home that preserve “internal stability.”

As former Soviet dissident Natan Sharansky has explained, the “most dependable weapon” available to an authoritarian regime is an external security threat that can unify the people and justify domestic political repression.

Improving relations with China would prompt wide-reaching political reform and liberalization. It would undercut the repressive internal forces that legitimize one-party authoritarian rule as a means of protecting the country against foreign military threats, particularly from the United States.

Through improved relations, we can ensure that China is a future partner and not a threat to U.S. interests. The greatest benefit is that the U.S. would avoid a military conflict for the foreseeable future with a country it now considers a major potential adversary.

Other critical security benefits to the United States which can be achieved through negotiated mutual threat reduction measures include:

—Significantly reducing China’s current and potential military threat to Taiwan, thus securing Taiwan’s democracy;

—Achieving a pull-back of Chinese military forces from a defined coastal security zone surrounding Japan;

—Increasing security cooperation with China on both regional and global issues to meet common threats such as nuclear proliferation, international terrorism, energy insecurity, and resource shortages;

—Having China submit its maritime disputes in the South and East China Seas to an independent international judicial body to prevent festering conflicts over uninhabited islands and energy resources from escalating to armed conflict; and

—Substantially increasing China’s military transparency, especially in the development of new weapons systems; and

—Reducing the scope, scale, and tempo of China’s military modernization programs by discrediting the rationale for conducting a focused anti-U.S. buildup, especially since the country has so many other pressing material needs.

Clearly, the best way to overcome the “China threat” is to achieve a stable peace through the resolution of outstanding security and economic conflicts between the two countries. This would enable the U.S. to deal decisively with the very legitimate concerns many Americans have over China’s commercial practices, including infringement of intellectual property rights, suppression of currency value, and protectionist measures that favor domestic industries.

A new policy that aims to foster peaceful and prosperous relations with China would best advance the interests of the great majority of Americans, now and in the future.Let us hope that President Obama, and China’s incoming leaders, will have the courage and vision to minimize conflict, ensure peaceful coexistence, and achieve  greater mutually beneficial Sino-American cooperation.

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Donald Gross, a Pacific Forum CSIS Senior Associate, is a former White House and State Department official whose new book, The China Fallacy: How the U.S. Can Benefit from China’s Rise and Avoid Another Cold War, was published in October by Bloomsbury.