Wednesday, June 17, 2015

Collaborating with China is in America's National Interest

This item was first posted on Asia Times.

As reported in the weekend edition of WSJ, there are two contending schools of thought on how to deal with China’s rise. One school is to raise the pressure in confronting China such as increasing the surveillance flights over South China Sea.

The other is to concede the inevitability of China’s rise and find ways to accommodate China. Perhaps the most developed among this latter line of reasoning is the book in progress by Kevin Rudd, the former prime minister of Australia and visiting scholar at Harvard.

Rudd sees China’s economy sustainable, growing at more than 6% annually and he expects China’s economic, political and foreign policy influence in Asia to continue to grow. China is now a bigger trading partner than is the U.S. with every Asian country.

Forcing the Asian countries to choose between the security of the U.S. military presence and the economic linkage with China would be unwise, Rudd suggests. It would be an all around losing proposition.

I would go further and suggest that finding ways to collaborate with China is in America’s national interest.

North to south, from Ukraine to Afghanistan to Iraq and the Middle East to most of the African continent, roughly one seventh of the earth’s land mass and as many of the population face the daily prospect of death and destruction. This has been more than plenty for the U.S. to deal with.

Just Afghanistan and Iraq has cost the U.S. north of $3 trillion—depending on how expenditures are counted—and still no end in sight. The U.S. national debt is over $18 trillion and no sign of shrinking. To freely pick up the option of adding China to the list of adversaries makes no fiscal sense.

In Xi Jinping, China’s new leader, Rudd sees a strong leader impatient for China to take its place on the world stage.

According to Rudd’s report, “Xi does see potential value in strategic and political collaboration with the United States. I argue that Xi is capable of bold policy moves, even including the possibility of grand strategic bargains on intractable questions such as the denuclearization and peaceful re-unification of the Korean Peninsula.

In other words, by collaborating with China, it would be possible to resolve certain knotty problems that the U.S. despite its military might cannot solve.

With its $4 trillion in reserve, China has been going around the world making friends by proposing win-win infrastructure investments. Recently, Premier Li Keqiang while in Peru proposed building a railroad from Peru traversing through the Amazon to Brazil. It would be a land bridge from the Pacific to the Atlantic.

It is bold and it is visionary but China has the experience and expertise to undertake and bring to completion such vast projects.

With the “one belt, one road” initiative, China proposes to invest in a string of ports from China’s east coast all the way through the Mediterranean to Greece and Italy and high speed rail through Central Asia to the seaports of Western Europe.

Even countries that are wary of China such as India, Philippines and Vietnam have sign on to be part of the initiative because they can see the value of becoming part of the economic integration that the initiative promises for the future.

Only the U.S. has been slow on the uptake. The Obama Administration wasted political capital trying to convince nations not to join the Asian Infrastructure Investment Bank on the soothsaying (and lame) concern that the bank would not be transparent.

Figuratively speaking, 57 nations broke the door down and trampled Treasury Secretary Jack Lew in the rush to join the bank. The founding nations recently met in Singapore and quickly drafted the articles of incorporation.

Unlike the World Bank and Asian Development Bank, nonpaid and non-resident board of directors will oversee the bank. And, unlike the stodgy predecessors, the new bank will aim for high standards of efficiency and transparency.

Each nation will have votes related to their capital contribution. China with the largest contribution will have the highest number of votes but will not have veto power. Smaller Asian nations will have more say in this bank than they ever did at the World Bank or the ADB.

China’s national interest is to be at the heart of global economic integration. Infrastructure investments will enhance the global economy, consistent with their long-term objective. 

Competing with the U.S. militarily or otherwise is not in their interest. It shouldn’t be for the U.S. either. Instead, replacing confrontation with collaboration should be in America’s national interest as well.

Much needed infrastructure improvements in Asia will cause the Asian economy to boom. A growing Asia will be a vital stimulus for the rest of the world. And certainly not least as the world’s second largest economy by then, the U.S. would be a significant beneficiary.

I can offer an illustrative date point in support of this view. Last year, nearly 2.2 million tourists visited the U.S. from China and they spent around $23 billion as compared to 23 million visitors from Canada and they spent $26 billion, about 9 to 1 difference.

China is already the world’s largest source of tourists with the reputation as the biggest per capita spenders. The ten-year, multiple entry visa negotiated last year will greatly facilitate more visitors from China, unless jaundiced geopolitics get in the way.

The path to begin collaboration is not complicated. Washington should stop telling Beijing what to do and stop making accusations in public. Incidents of verifiable cyber incursions and theft of intellectual properties should be discussed and resolved in private and not used for the benefit of fanning domestic antagonism.

The U.S. has long forgotten the practice of the Golden Rule when it comes to international policy. In the case with China, applying the golden rule would simply mean do unto China as America would have China do unto the U.S.

For America to yield to the idea that ratcheting tension with China is the right approach is to concede to the inevitability of the Thucydides Trap, namely that a rising power and a reigning power will always lead to conflict. This outcome might be good for the defense budget and the military industrial complex but tragic for everybody else.

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