In Search of Balance in U.S.-China Relationship

The West saw a China that could do no wrong from President Richard Nixon's historic visit to China in 1972 until the live telecast in 1989 of the suppression of the student protest in Tiananmen. Since those searing images hit the global airwaves, China could do no right. Ironically, a steady stream of information about China available since its reform in 1978 reveals a China as less than the utopia that professional China watchers raved about during Nixon's era. On the other hand, since 1989, China has been making progress on all fronts--social, economic and political--that are ignored by many western watchers. Instead, they rush to join in the chorus bent on criticizing China--or some would say, demonizing China.

The spectrum of criticism on China ranges from human rights violations, predatory trade practices, infringement of intellectual properties, arms dealing in ways unacceptable to the West, and alleged acts of influence buying in Washington. It's time to examine the substance behind these accusations. The relationship between a superpower and a major regional power in Asia is too important to be buffeted by the whims of politicians and pundits in a perpetual pout over China.

Critics of China's human rights record usually evoke the images from Tiananmen. Yet revelations from such sources as the documentary film, Gate of Heavenly Peace, point out that the issues surrounding the confrontation between the Beijing government and the students are considerably more complex than can be explained by the image of tanks running over innocent bystanders. While the images remain frozen in the minds of the western observers, China has moved on, steadily improving the living standard of its population. Today, visitors see a population living and moving about under an increasingly relaxed atmosphere, free of the pervasive big brother scrutiny that existed when Nixon visited China.

However, many in the U.S. government insist on dwelling on the treatment of a few prominent dissidents, to the exclusion of objectivity. These critics seem to share the sentiment expressed by Martin Lee, the Hong Kong activist on his recent fund raising visit to the U.S. Lee dismissed the Beijing government's efforts in building a stable environment to feed and cloth 1.2 billion people as "animal rights not human rights." Maybe so, but many allies of the U.S. do not agree.

The most recent attempt to censure China through the UN Human Rights Commission in Geneva ended in dismal failure when countries such as Australia, Canada, France, Germany and Japan declined to go along with the U.S. backed resolution fronted by Denmark. Perhaps this desertion of ranks is the final message the U.S. needs in order to stop taking this futile and counter-productive approach.

The China bashers are making increasing use of the trade deficit with China as another convenient source of grievance, overlooking that the U.S. has an overall net trade deficit with the world, not just with China. Some of the deficit has shifted from Hong Kong and Taiwan to China as those labor intensive operations seek lower costs of labor. In the future, as China's labor costs become too high, the manufacturing of toys, footwear, household items will go elsewhere, Vietnam or Bangladesh, or wherever the most competitive labor costs can be found.

China did not somehow and suddenly wrestle these manufacturing operations from here; the U.S. hasn't had these labor intensive jobs for decades. What the trade deficit really means is that the American consumer can buy goods at a lower price than if the U.S. economy is protected from imports and the same items have to be made in USA. The American standard of living is being subsidized by the lower wages of developing countries.

Rampant piracy of intellectual property rights is also frequently cited for the purpose of bashing. This is, unfortunately, a problem that all developing economies go through and China is no exception. However, no nation dedicated towards economic development can ignore the need to protect intellectual property, because the growth of domestic industries is also dependent on such protection. Indeed, international attorneys working on prosecuting infringements can confirm recent U.S. government findings that China is cracking down harder on piracy than virtually any other country in Asia. In a large territory with increasing local autonomy, there are also more culprits to track down and illegal operations to padlock.

Export of illegally reproduced goods out of China requires the instigation of knowledgeable intermediaries that are familiar with the outside market and recognize the opportunity for illicit sales. They are the ones that make the windfall ill-gotten gains. To halt this trade, it would be more effective if the U.S. enforcement agencies can work closely with their counterparts in China. Such cooperation is difficult to achieve when every other message is larded in acrimony.

The claim that piracy costs as much as $3 billion to the U.S. economy presumes that the purchase of every bogus product at a deep discount equates to the loss of a bona fide sale at market price, a highly problematic assumption. What is real is that U.S. exports to China have reached $10 billion a year (not including re-export of U.S. goods from Hong Kong) and has been increasing at roughly 20% per year. Everybody understands that export creates jobs.

One of the comparative advantages China enjoys is its huge market potential. China is using this lure to attract foreign direct investments and encourage a local presence. Companies such as Motorola and Matsushita have found the economic advantages of a local presence to be the key to capturing major market shares. Even though revenues from their offshore plants do not directly benefit their home base workers, profits from any source finance the development of the next generation of products, maintain their worldwide position and enhance the payroll throughout the organization.

The accusation that China is a purveyor of weapons of mass destruction to "rogue countries" typifies the kind of hypocrisy that afflicts many politicians with conveniently selective memories. China's arms business is but a tiny fraction compared to the U.S., the world's leading arms supplier with about 60% market share. Apparently, it is acceptable only for the U.S. to sell to the likes of yesterday's Saddam Hussein, Noriega and Mobutu and unknown numbers of today's clients that may become pariahs of tomorrow.

Double standards also rule the way we look at influence buying by foreign sources. A lot of energy has been devoted to alleging and speculating on the possibility of China as the origin of $2 million contributed to the election campaigns last year. The media keeps recycling the FBI claim of strong evidences of wrongdoing without ever asking to see the beef. In the meantime, Martin Lee comes to the U.S. to raise funds for the sole purpose of financing his political activities in Hong Kong and not a murmur on the propriety of U.S. interference has been raised.

Since the beginning of this year, there has been an increase in the exchange of visits between the leaders of China and the U.S. This could lead to the building of a more constructive relationship between the two countries based on mutual understanding grounded in reality. Certainly there are now many more members of the Congress that have visited China and can see that the popular but misinformed American perception of China bears no resemblance to actual conditions there.

Even so, only 20% of members of Congress have visited China to date, arguably one of the most important bi-lateral relationships the U.S. will face for the next century. The few that do know the real China are outnumbered by the strident voices from the China-bashing camp of Senator Jesse Helms, Rep. Richard Gephardt, and Rep. Nancy Pelosi et al. This group either speaks from ignorance or preys on the ignorance of the American public to get away with wholly irresponsible statements that cannot stand up to scrutiny. They can get away with this because they can count on media to gorge on their public pronouncements without demanding the substance that would justify their position.

Unbalanced media reporting deters the formation of a balanced relationship with China. Continued use of China as a political issue to slam the oponents makes it difficult for any policy maker to look at the situation rationally. If we find ourselves in a gratuitous cold war with China, there would be no winners.