U.S. and China:
Harmony Today, Confrontation Tomorrow?
Second of four parts
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
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
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.
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.
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.
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.
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.
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.
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.
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.
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
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
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.
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
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
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
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,
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.
Compromise on the Korean nuke issue
People’s Republic of Korea (DPRK or North Korea) continues to be a
traditional ally of China but on the matter of its controversial nuclear
weapons program, Beijing has shown a compromising attitude that favors
the United States. The Beijing government opposed Pyongyang’s decision
to withdraw from the Nuclear Non-Proliferation Treaty in January 2003,
has expressed concerns over its nuclear capabilities and its desire for
a non-nuclear Korean Peninsula. It also backed the U.S. in referring its
own ally’s non-compliance with its International Atomic Energy Agency (IAEA)
obligations to the UN Security Council. China was angered by North
Korea’s nuclear test on Oct. 10, 2006, saying it would harm Pyongyang’s
relations with Beijing and called on the United Nations to take
“appropriate measures” to get North Korea to relinquish its nuclear
It now appears,
says Prof. Chalmers Johnson, who has written several books on East Asia,
that Beijing “actually seems more interested in a perpetuation of the
status quo on the Korean Peninsula.” Its policy is one of “no
unification, no war,” according to him. Reunification, which, he says,
may also happen with the collapse of North Korea due to economic
isolation and its inevitable integration by South Korea, may lead to a
new powerful actor in northeast Asia possibly armed with nuclear weapons
– “not a development the Chinese would necessarily welcome.”
authorities have however accused Beijing of dragging its feet on the
nuclear issue and even secretly propping up North Korea as a cudgel
against the U.S. and particularly Japan.
Blunt policy on Taiwan
Republic of China
or Taiwan is a Cold War relic. A province of China that was occupied by
Gen. Chiang Kai-shek’s Kuomintang remnants following their defeat by the
CCP-PLA led by Chairman Mao Ze-dong in 1949, Taiwan had been propped up
by the U.S. and was used by the latter to intimidate and contain the
Beijing government. The thaw in China-U.S. relations during the 1970s,
led the U.S. to adopt a “One-China Policy” but maintained Taiwan as an
ally, making it the second largest recipient of military sales, and
warned China against annexing the province.
In line with the
1979 Taiwan Relations Act, which committed U.S. defense of Taiwan in
case of a foreign aggression, the Bush administration approved the
biggest arms sales to Taiwan – a 10-year package amounting to $18.6
billion including submarines, helicopters and missiles.
Taiwan had been a
major irritant even as China and the U.S. were engaged in active
bilateral trade and investment but it has been overshadowed in recent
years by America’s “war on terrorism” even as it continues to serve as
U.S.’ balancing act against China. Historically, the U.S. could not
afford to engage China in a war over Taiwan, a move that has been
pressed by Washington’s neo-conservative and pro-Taiwan groups. However,
one cannot rule out Washington’s success in keeping Taiwan secure not
only as its bilateral commitment but also as a client state in support
of U.S. military supremacy in the East Asia.
Taiwan has also
enjoyed the support of Japan’s rightist groups. And all that China could
do is to commit to the “peaceful reunification” with its belligerent
province while warning that declaring its “independence” would be
courting danger. In March 2005, China passed an anti-secession law that
essentially hints Beijing would reunify with Taiwan through whatever
Meantime, China’s upgrading of its military capability is seen by U.S.
neo-conservatives including influential Republican Party members, the
U.S.-China Economic and Security Review Commission, and the conservative
daily, Washington Times, as showing that the threat of an invasion of
Taiwan remains real.
Taiwan is just part
of China’s foreign policy on settling old, irredentist claims.
After recovering Hong Kong from the UK in 1997, China set its eyes
likewise on various island groups in the South China Sea, particularly
the Spratly group of islands (Nansha in Chinese) and the Paracels (Xisha).
In fact since March 1988, China had occupied more than seven islands in
the Spratlys and prospects of occupying others pit Beijing against six
other claimants, namely, Vietnam, with which the Chinese navy clashed
twice, in 1974, and in 1988; as well as the Philippines, Taiwan,
Malaysia, Brunei, and Indonesia.
Through South China
Sea passes virtually all of the oil from the Gulf Region intended for
China, Japan, South Korea and Taiwan. There is possibly oil under the
Spratlys although experts doubt that any significant reserves here will
ever become commercially viable as the waters are about 2,000 meters
deep. The deepest oceanic drilling for oil is only to a depth of 872
meters in the Gulf of Mexico.
Is China-U.S. armed confrontation looming?
The current Chinese
leadership is pragmatic enough not to engage the U.S. in a military
competition – whether now or in the immediate future - that could be
seen as a challenge to U.S. military supremacy in East Asia. Since 1979,
following Deng Xiao-ping’s modernization campaign and after cutting off
solidarity support to national liberation movements, the Beijing
government has officially pursued a policy of “promoting international
peace” as the basis for China’s modernization in the context of its
integration into the global capitalist system. The only exception is
when it comes to its suzerain claims over Taiwan and the South China
Sea, particularly over the Spratly Islands, where China has flexed its
accusations that China is building up its military in order to establish
its own hegemony in the region and challenge U.S. military supremacy
that would alter the regional “balance of power”, remain strong but are
mainly voiced by neo-conservatives in the U.S. government particularly
Bush, the Pentagon, Secretary of State Condoleezza Rice, the CIA, the
pro-Taiwan lobby groups and other rightist elements and think tanks.
modernization,” the neo-conservatives say, “is transforming the Chinese
military, raising the stakes for U.S. forces long dominant in the
and U.S. officials, for example, point to several programs that could
soon produce for China a stronger and strategic nuclear deterrent
against the United States, soldiers better trained to use
high-technology weapons, and more effective cruise and anti-ship
missiles for use in the waters around Taiwan.
In addition, China maintains the world’s largest military, at 2.5
million troops, although the Beijing government has traditionally
justified this as a necessity given China’s large mass of land that
shares borders with countries with which it has had armed hostilities
particularly Russia, India in South Asia, as well as Vietnam in
Likewise, U.S. and
Taiwanese military officials point to China's rapid development of
cruise and other anti-ship missiles designed to pierce the electronic
defenses of U.S. vessels that might be dispatched to the Taiwan Strait
in case of conflict. China’s 2nd Artillery Corps has deployed more than
600 short-range ballistic missiles aimed at Taiwan from southeastern
China's Fujian and Jiangxi provinces, according to Taiwan's deputy
defense minister, Michael M. Tsai. Medium-range missiles have also been
developed, he said, and much of China's modernization campaign is
directed at acquiring weapons and support systems that would give it air
and sea superiority in any conflict over the 100-mile-wide Taiwan
China's navy and air force have set out to project power in the South
China Sea, where several islands are under dispute and vital oil
supplies pass through, and in the East China Sea, where China and Japan
are at loggerheads over mineral rights and several contested islands.
according to a report prepared for former U.S. Defense Secretary Donald
Rumsfeld's office by Booz Allen Hamilton, a consulting firm, has
developed a "string of pearls" strategy, seeking military-related
agreements with Bangladesh, Cambodia and Thailand in addition to those
with Myanmar (Burma) and Pakistan. The 13,500-square-mile territory
(South China Sea) has also become a platform that China needs to protect
southern sea lanes, through which pass 80 percent of its imported oil
and tons of other imported raw materials. It could serve as a base for
Chinese submarines to have unfettered access to the deep Pacific,
according to Tsai, Taiwan's deputy defense minister.
China, with a $1.3
trillion economy growing at more than 9 percent a year, has a defense
budget rising by double digits in recent years, jumping to 12.6 percent
in 2005 when it hit $30 billion.
China’s defense spending is of course just 7 percent of what the Bush
government spent for defense in 2005 - $440 billion.
Other sources show,
however, that perceptions about China’s military build-up are overblown,
saying that the ongoing modernization of the Chinese military poses less
of a threat to the United States than recent studies by the Pentagon and
U.S. Congress. Both studies exaggerate the strength of China's military
by focusing on the modest improvements of specific sectors rather than
the still-antiquated overall state of Chinese forces.
The state of the
Chinese military and its modernization must also be put in the context
of U.S. interests in East Asia and compared with the state and
modernization of the U.S. military and other militaries in East Asia,
especially the Taiwanese armed forces. Viewed in that context, China's
military modernization does not look especially threatening.
Admiral Dennis C. Blair, commander-in-chief of the Pacific Command in
March 1999, “is not a military threat to U.S. interests. It will be many
years before the People’s Liberation Army presents a major challenge to
U.S. forces.” And yet, in that same month, the U.S. Senate voted 97-3 to
build a “national missile defense” essentially against China and North
Korea, with President Clinton supporting a $10.6 billion budget on it
for five years.
officially calling its policy in East Asia as "containment," the United
States has ringed China with formal and informal alliances and a forward
military presence. Central to the U.S.’ military strategy in East Asia
is its system of alliances with Japan, South Korea, Thailand, the
Philippines and Australia. It also wants to transform ASEAN into a
“multilateral defense cooperation.”
With such an extended defense perimeter, the United States considers as
a threat to its interests any natural attempt by China to gain more
control of its external environment by increasing defense spending. Even
without U.S. assistance, Taiwan's modern military could probably
dissuade China from attacking. “Taiwan does not have to be able to win a
conflict; it needs only to make the costs of any attack unacceptable to
China. The informal U.S. security guarantee is unneeded,” says Cato’s
It is the U.S. that
has increasingly made war preparations directed specifically against
China – a strategy that dates back to the Cold War when the U.S. pursued
an aggressive “containment” policy since China gained its independence
in 1949. Under the Bush administration, the U.S. engages China in a
robust trade and investment ties but maintains an aggressive policy of
encirclement and cooptation in the field of counter-terrorism in East
China feels threatened by the U.S.’ theater missile defense (TMD) system
with a possible TMD installation in Taiwan. In 1999, Wang Daohan, a
senior adviser to then President Jiang Zemin, reacted to the report
about the TMD installation: “It is like playing with fire. That will
completely disrupt the current world situation, and instead a new Cold
War will appear.”
In a section of the
Pentagon’s 2006 Quadrennial Defense Review entitled “Shaping the choices
of countries at strategic crossroads,” the document makes clear that the
buildup of the U.S. military is aimed at deterring any country from
challenging U.S. domination in any region of the world. It warns that
Washington “will attempt to dissuade any military competitor from
developing disruptive or other capabilities that could enable regional
hegemony,” adding the explicit threat that “should deterrence fail, the
United States would deny a hostile power its strategic and operational
In particular, the
document singles out China, describing it as “having the greatest
potential to compete militarily with the United States and field
disruptive military technologies that could over time offset traditional
U.S. military advantages.”
In retort, a
Chinese foreign policy spokesperson writing in the China Daily called
the references to China in the document “anxiety on the part of the U.S.
that borders on the illusionary.”
John J. Mearsheimer, professor of political science, Chicago
University, cited in “Will China’s rise trigger Sino-I.S.
confrontation?”, Global Times, November 2005. China’s GDP continues
to grow at around 9% or higher in real terms, and its exports growth
rates have stayed around 30% for the past three years. China’s trade
surplus continues to hit new records – it reached $102 billion in
2005 tripling the $32 billion in 2004. For the first 7 months in
2006 its trade surplus reached $75.95 billion, another 51.9%
increase from the same period last year. Prof. Pao Yu-ching, An
Analysis of China’s Capitalist Reform, 2006.
10 “U.S., China
not competitors in Southeast Asia, State’s Hill says,” Jane Morse,
21 “China Builds
a Smaller, Stronger Military Modernization Could Alter Regional
Balance of Power, Raising Stakes for U.S.,” Edward Cody, Washington
Post, April 12, 2005.
22 Cody, ibid.
*This is part of a
paper discussed by the author at the conference of the International
League of Peoples’ Struggles in East Asia and Oceania on Dec. 11, 2006.
It will also be part of a forthcoming book on East Asia today.
Korean Peninsula: U.S. Military Aggression and Pyongyang’s Response
Third of four parts
Japan: FTAs, Oil and Taiwan
Last of four parts
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