May 31, 2007    Volume 14, No. 10

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Were Americans Duped? The Political Rationale For Chinese Trade Deals Has Proven To Be Specious



BY RICHARD McCORMACK
richard@manufacturingnews.com


The United States public has been told repeatedly that legislation allowing unfettered free trade with China would lead to a new era of Chinese political freedom. But no such thing has happened, and the specious argument made by multinational companies and politicians has led to the creation of policies based upon a "wrong paradigm," James Mann of the Johns Hopkins School of Advanced International Studies told a recent meeting of the U.S.-China Economic and Security Review Commission.

"American policy towards China requires public support -- and the way to maintain public support for American policy, particularly its current relationship with China, is to claim that this will serve the purpose of changing China's political system," Mann said. "Since 1989, virtually every change in U.S. policy towards China has been justified to the American public on the basis that it would help to open up China's political system."

The argument was used by President Clinton to convince Congress to pass trade liberalization with China and by President Bush to support China's entry into the WTO. Congressional leaders used it to justify their vote in favor of those initiatives.

"The paradigm of inevitable change offered multinational corporations the answers they needed [to convince policymakers] that not only was China destined to open up its political system, but trade would be the key that would unlock the door," Mann said. "Trade would lead to political liberalization -- to democracy. The trouble is that the entire theory may be dead wrong."

Liberalization of trade has not changed the way China's Communist Party rules the country. There is no political opposition party in China. Censorship of the press and the Internet endures. There are no free elections. "The argument that the Chinese system is changing seeks to divert attention to smaller realities and away from larger ones," said Mann. "This paradigm of a China that is destined for political change has deep roots in American policy over the past 35 years."

U.S. politicians from both parties and executives from multinational companies continue to argue that China's economic growth means it is inevitably destined for political change. President Clinton said that economic changes in China will "increase the spirit of liberty over time. I just think it's inevitable, just as inevitably the Berlin Wall fell."

"Why do we Americans believe that, with advancing prosperity, China will automatically come to have a political system like ours?" Mann asked. "Is it simply because the Chinese now eat at McDonald's and wear blue jeans? To make this assumption about China is to repeat the mistake others have made in the past -- that is, to think wrongly that the Chinese are inevitably becoming like us...They were wrong."

U.S. trade policies with China have created considerable hardship for a significant number of Americans, Mann noted. "Across the United States, factories have closed and millions of Americans have been put out of work. There have been some benefits to those policies as well, especially to companies investing in manufacturing in China; yet if these policies had been judged exclusively in economic terms, they might not have won the public support and congressional approval that was necessary. As a result, the American people have been told repeatedly that the reasons for our policy were not merely economic but political. Unrestricted free trade with China was going to open the way for China to become a pluralistic country. These political arguments were the ones that made the difference. Without the claim that trade would open up the Chinese political system, trade legislation probably would not have been enacted. It is difficult if not impossible to find an American president or congressional leader who said 'China has a repressive political system and it's not going to change, but let's pass this legislation anyway.' "

Phillip Saunders, senior research fellow at the Institute for National Strategic Studies at the National Defense University, who spoke on the same panel before the USCC, wasn't so sure about Mann's argument. China is a very different place than it was 25 years ago, he said. It might still be a repressed state, but it is not threatening anybody militarily. China is becoming integrated into the world economy and its interests are changing.

"The costs of conflict are going to go up and, therefore, you might not get democratization or it might be a century-long process, but what you will get is a change in behavior because its interest will change and the costs of military action are going to go a lot higher," he said. "I think that's actually a plausible explanation for what we've seen over the last decade, which is a China that is not militarily aggressive. It's building its capabilities and that's something we have to watch very carefully, but it hasn't been using them. You need to remember that side of things and that's a consequence of how China is growing. The pattern that I see in Chinese foreign policy and international behavior is they're very cautious about doing things that might have a negative effect on the economy."

There is also going to be a generational change taking place in China. Younger people educated in the United States and the West will soon move into positions of power. They will want some aspects of a democratic system adopted in China. "Nobody believes in communism anymore," Saunders said. "It's 'I'm out for me. I'm going to do the best I can for me and for my family within the system.' "



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