The steady drumbeat by our politicians and media characterizing China as the source
of all our problems continues to escalate. Anyone who has studied history and has some idea
about how China operates will tell you that we are totally on the wrong course. No one has
ever gained anything by publicly pushing China. Engagement with the current Chinese
leadership in private settings is likely to bear much better results.
Public opinion is also being shaped by some very misleading “facts.” For a couple of
decades now China has been accused of taking jobs away from the USA. In reality, it is the US
multinational companies who have steadily outsourced production to China and elsewhere
for higher profits. The list of such companies includes Apple to Zoom. Most Apple products are
made in China while Zoom’s product development team is based in China.
Allegations that Covid-19 could have originated from Chinese labs based in Wuhan
might be true but there is no conclusive evidence or consensus even among our own
intelligence agencies. Such allegations led by then-President Trump have led to overt
discrimination and even physical bashing of South Asians in the streets of New York. Ironically,
many of these people have lived in the USA for more than two generations.
Reports of China’s economic success from all over the world does not mean that they
are “taking over” the world. They have steadily pursued a trade policy away from
dependence on the US market and now have a favorable trading relationship with over 200
countries. China currently has a huge domestic market with the majority of the population
enjoying a higher standard of living than any previous generations.
The USA is still the no. 1 economic and military power in the world. However, we are
making it easy for others to catch up by stretching our military presence in some form or
another in 100+ countries and spending far too much on defense. On the contrary, China does
not have a single soldier outside its borders. It has propped up North Korea as it does not
want US soldiers on its borders. There has also been a loss in our standing around the world
after our invasion of Iraq and then Afghanistan. The first war was based on lies and our
humiliating exit from the latter has given our detractors the opportunity to describe us as
“untrustworthy” and “unreliable”.
On the trading front, China has borrowed a page from our script but with subtle
caveats. They are willing to give soft-term loans for everything from buying Chinese products
to building massive roads, highways, and bridges. Caveats include the use of Chinese materials,
skilled labor including engineers, and long-term management contracts, particularly for ports.
They have signed trade agreements through which they now have access and assured supply (read-control) of important industrial minerals like copper, diamonds, cobalt, manganese,
lead, and nickel.
While our foreign policy failures opened the doors for the Russian military to come into
Syria, China recently scored a major coup by mediating the dispute between Saudi Arabia and
Iran. Many are looking at China as the ONLY power that can bring a negotiated settlement in
Russia-Ukrainian war. In fact, China has put on the table a 12-point peace plan which has not
been rejected by either Russia or Ukraine. Sadly, there are very few regions in the world
today where the USA is considered an even-handed broker or peacemaker in any dispute.
Policy change must come with the recognition that China is second to none as an
economic power with the sole exception of the USA. China’s military power has historically been
geared towards defense even though lately it has been asserting its maritime power in South
China sea corridor. In the China-Russia relationship, the “big brother” today is China. China
does need Russian oil and gas. Russia needs access in the east as its western front is now a
battle theater.
In the battle for economic domination, our favorite chess piece to counter China’s
ascendency in Asia has been India but it has proven to be an unreliable ally in key conflicts
like the Ukraine war or sanctions on Iran. India is trading with both Iran and Russia but has limited
options as 80% of defense arms come from the latter. India also has issues with every one of
its neighbors and its current government’s parochial religious policies could severely hamper
its own future.
To be sure, China has its own set of challenges. It has an aging and shrinking labor
force. With economic progress, Chinese labor is no longer inexpensive. With the highest
number of older people in the world with a variety of healthcare needs, China’s economic
success model needs a reboot. Its educational system is geared to train second-level
managers who are less entrepreneurial than those from other emerging countries. Corruption is
still endemic. Unlike Japan and Korea, China also does not have giant business houses like
Mitsubishi and Samsung which have been their respective government’s implicit partners in
maintaining economic competitiveness.
The USA needs to take the initiative for a total reset of its relationship with China with the
two Presidents setting up a “hotline” like what followed the Cuban crisis. “Hotline”, a direct
phone line to the Kremlin, was designed to facilitate communication between President
Kennedy and Soviet Prime Minister Khrushchev. It has been a success in preventing direct
confrontation between the two great powers. Establishment of such a hotline “hotline”
recognizes China as a superpower but also reduces the fear of triggering an “accidental” war
with devastating consequences for the world.
The USA can also be helpful to China in healthcare, where we are the gold standard
for advanced care. Both countries need to collaborate for a better climate policy and
environment for the next generation. The USA has great experience and expertise in cleaning up water and air. China needs help in those areas as well. Together China and USA can significantly reduce the chances of another pandemic from happening. As the stronger power, the USA must be magnanimous and take the first step.
Author: Faisal M Rahman, Ph.D., Professor and Founding Dean, The Graham School of
Management, Saint Xavier University, Chicago, IL 60655. Email – rahman@sxu.edu ; Cell: 1-312-533-0452