On several issues and concerns, both China and U.S. imperialism today share some common interests and to some degree are interdependent. Whatever fractious issues separate the two countries, these appear to be manageable or are simple irritants and at the moment do not jeopardize the major common and strategic interests they both share.

By BOBBY TUAZON
Bulatlat

On several issues and concerns, both China and U.S. imperialism today share some common interests and to some degree are interdependent. Whatever fractious issues separate the two countries, these appear to be manageable or are simple irritants and at the moment do not jeopardize the major common and strategic interests they both share. This is not to rule out the fact however that there are definitely clashing perceptions and policy differences which emanate from circles of authorities and interests in both the U.S. and China that will likely lead to a direct confrontation. A bigger problem – with repercussions to current ties between the two countries – will stem from a possible implosion from within China as a result of worsening social and economic problems spawned by the country’s unrestrained market reform and its stranglehold by the global capitalist system.

But at present, the issues that harmonize the interests of both countries, or where China defers to U.S. hegemony and the status quo, are: a) trade and investment; b) how to deal with North Korea; c) “global terrorism” including Afghanistan and Iraq; and d) Southeast Asia.

However, they appear to be poles apart on the following: a) defense; b) Taiwan; c) Iran; and d) human rights and U.S. intellectual property rights.

Total trade between China and the U.S. has leaped from $33 billion in 1992 to over $230 billion in 2004. In 2004, China’s trade growth, combining imports and exports, reached 35 percent. Between 1999 and 2004, U.S. imports from China grew from $82 billion to just under $200 billion, accounting for a quarter of all America’s import growth. On the other hand, U.S. exports to China nearly tripled in the five years after 1999, far exceeding forecasts prior to China’s World Trade Organization (WTO) entry. America’s exports to China have risen about 10 times as fast as exports to the world during that time, but are still far below China’s exports to the United States.[1]

The U.S. officially praises China’s market-oriented reforms and its joining the WTO international trading system, as “nothing short of breathtaking,” to quote U.S. Trade Representative Susan Schwab, making it the third largest trading nation in the world. [2] In 2005, China was expected to become the U.S.’ second largest trade partner. The U.S., on the other hand, is China’s second biggest trade partner after Japan.

America’s exports to China create 500,000 high-salary jobs for the United States each year while China’s cheap and good commodities have helped U.S. consumers save expenditures to the tune of US$20 billion each year. The development of China-U.S. economic and trade contacts is a “win, win” result, bringing solid benefits to the two countries.[3]

Between the two countries, however, China is highly dependent on the U.S., the world’s largest economy, on high flows of international trade and investment to rapidly grow its economy and create the 30-40 million new jobs it needs each year to maintain internal social stability.[4] U.S. direct investment in China covers a wide range of manufacturing sectors, petrochemicals, big hotel projects and restaurant chains. In addition, more than 100 U.S.-based TNCs have projects in China, some with multiple investments. Cumulative U.S. investment in China is valued at $48 billion.

Since 2002, China has surpassed the United States to become the largest recipient of foreign direct investment, and at the same time it has also exported capital. China is the world’s largest producer of more than 170 products, including steel, aluminum, cement, etc. The amount of energy it consumes is second only to the United States.[5]

The downside for the U.S. of this seemingly robust bilateral trade ties is that Chinese imports have wiped out some industries in the United States, notably electronics, toys and textiles.[6] There are major areas of friction: U.S. demands to China to remove its restrictive practices to foreign goods and services, including high tariffs; lack of transparency; requiring firms to obtain special permission to import goods, inconsistent application of laws and regulations, and leveraging technology from foreign firms in return for market access. China’s access to WTO is meant to help address these barriers.[7]

But at the moment, China’s current trade boom and investment projects correspond to the Chinese leadership’s trajectory since 1978 when they dumped socialist construction and adopted capitalist reform integrating the country’s economy into the global capitalist system. Unabashedly calling this as “socialism with Chinese characters,” Deng Xiao-ping and his ilk began lowering import tariffs and eliminating import quotas to promote trade and by granting favorable treatment to entice foreign investment capital.[8]

The United States gave China precisely what it lacked, namely an open market for goods, access to financial markets, and a store of value for savings, among other things. Providing a global reserve currency has been America’s decisive contribution to Chinese success.[9]

U.S. imperialism is served by China as a net exporter of capital most of which goes to the U.S. and which helps the U.S. to soften its financial crisis. China serves the global capitalist system by being mainly a processing country. In effect, China has become so dependent on the United States for its economic growth that this gives Washington leverage in either securing Beijing’s cooperation to its aggressive foreign policy or at least reducing China’s influence and intransigence in areas where U.S. interests are paramount or of high value. The U.S. has been trying to boost Chinese pride by cheering it as a major international player that should play an active role in the world particularly in hot spots. The subtle expectation of course is for China to support U.S. imperialism’s aggressive foreign policy including its wars of aggression and interventionism.

So beneficial have economic ties with China been that the U.S. state department believes it needs China’s cooperation in pursuing America’s foreign policy objectives throughout the world. The United States, Christopher Hill, Assistant Secretary of State for East Asian and Pacific Affairs said in May 2006, is “engaged with China on many, many different levels – on almost every issue that affects our broad strategic and economic interest. We have found many areas in which our interests and policies converge and, as importantly, we are able to engage candidly in those areas where we have found differences…More China does not mean less U.S.”[10]

Hill also said that for seven consecutive U.S. administrations the United States has “supported and encouraged China’s integration into the global system.” China is now a member of important security and economic organizations such as the United Nations, the Association of Southeast Asian Nations (ASEAN), the ASEAN Regional Forum (ARF), the WTO and the Asia-Pacific Economic Cooperation (APEC) forum.

The next step for China, Hill said, is to take on a greater role in the international system, “a system from which China has benefited greatly.” This includes, he explained, constructive engagement with China on issues ranging from Iran’s nuclear ambitions and North Korea’s nuclear weapons to the humanitarian crisis in Darfur.

Chinese cooperation in the U.S.-led “war on terrorism”

Although there had been swings, ups and downs in China-U.S. relations (from Cold War containment to constructive engagement, thereafter to “containment-engagement”)[11] since the rapprochement in the early 1970s, 9/11 set a new tone for Washington in dealing with China in the context of the new global situation. In Washington, 9/11 led to the downgrading of China – at least for then and now – as a “primary security threat” and gave focus on the Middle East and the “war on terrorism.” (In fact, China was not even mentioned in the “axis of evil.”) Beijing expressed strong public support for the “war on terrorism,” voted in favor of the UN Security Council Resolution 1373[12], supported the “coalition campaign” in Afghanistan and contributed $150 million for Afghan reconstruction. China and the U.S. also began a counter-terrorism dialogue with several rounds already completed.

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