Dr. Wordman
Abstract
China has nearly 5000 years of history. The U.S. is less than 250 years old. The U.S.-China relationship has evolved from no-contact to a rivalry state in the last two century. How did this happen? This paper traces the evolution of the U.S.-China relationship from a long time ago to eighteenth to nineteenth century, WW I period, WW II Period, and post WW II to current century (in four parts) in order to understand how and why the two great nations have become rivals and whether they are calculated rivals?!
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What Is the Real China Threat?
China poses a natural threat to the U.S. like any other competitive large nation would. The threat comes mainly from trade, technology and investment and finance. Military threat is a self-generated or self-inflicted threat between two nuclear powers. Japan and EU had all been a competitive threat to the U.S. , but the U.S. was able to resolve them. Why is China any different? After a careful analysis, we may say that the nature of threat is not different, but there are some elements that will make the threat perceived differently and not easily resolved. This perception to a large extent is not what China does but what the U.S. sees, imagines and interprets. Therefore, the U.S. has to first reflect inward on her assumptions and understandings of China. First of all, China is different from Japan, Germany or France. China is a truly independent nation. She does not owe the U.S. anything. The U.S. does not have military bases there or help their national defenses as she does in Japan, Korea, and Germany. China’s competitiveness is no different from Japan, Korea or Germany, but it is how the U.S. can deal with the competition that matters. The U.S.can use her leverage (supporting ally) in resolving trade issues with Japan, Korea or EU countries, so the trade issues could be resolved easier, but with China the U.S. has to accept an equal playing field, treating China as a true independent competitor. If the U.S. wanted to be a global citizen, she had to play by the global rules. As a member of WTO, every member must settle disputes under WTO rules. Pulling out of WTO only admits that the U.S. will not accept or compete under the WTO rules. So the competitive threat from China, same as from other countries, must be dealt with no special leverage but through legal means under the existing institutional rules. If anything needs to be changed, the U.S. has to work with the international community just like China must. This calls for global leadership. So we may say that the real China threat is in global leadership. The U.S. has always been the global leader, but under the concept of democracy and globalization, the U.S. must earn the global leadership if facing a competition.
Let's return to the issue why the U.S. does not have an easy solution to deal with the competition from China. The U.S. possesses far more natural resources and the nation is wealthier than China. China is still in a catching up mode in many aspects, especially in advanced technologies, but her rate of progress is at least three times faster than the U.S. in terms of GDP growth as well as other developments. It is this rate of change worrying the U.S. and triggering a panic button. However, the panic does not justify any reckless reaction such as elevating military tension unless the U.S. is willing to accept mutual destruction. Leveraging on the U.S. allies to inflict wounds on China is somewhat selfish and wishful thinking. China maintains a good trade relationship with over 100 countries, many of them U.S. allies. What is the motivation for any nation to ruin her prosperity for being a pawn for the U.S.? The recent development in Australia, engaging an anti-China posture by taking American side of the U.S.-China rift, has vividly shown that the economic loss and damage is real on Australia and the China threat coming from her competitiveness has to be faced fairly. U.S. Congress pledging to drink Australia red wines is not going to amend the huge loss of Aussie trades such as iron, coal, lobster etc China and South China Sea are far away from Australia. Any threat in South China Sea (SCS) matters more to China since 65% of Chin's trade must go through SCS including all the exports from Australia to China. Making SCS unstable may hurt China but also to ASEAN countries. So after realizing what is the real China threat, applying military pressure is not a solution unless anyone wants to have WW III.
Randomly applying sanctions and tariffs are also mutually damaging offering no positive benefits in facing the competition from China. The all out war on semiconductor industry and silicon products under the national security flag and the 5G technology battle can best delay China’s product offerings for a few quarters at the expense of American corporate profits and employment. China will be forced to build her own supply chain. With still a labor advantage, China will soon strengthen her manufacturing chain and material supports. On the other hand, the U.S. will lose the China market suffocating the growth of the U.S. high tech industry. In a nut shell, retaliation and sabotage is not a solution to competition. The U.S. must look into the real issues of losing competitiveness. As an advanced developed country, the U.S. must find her own formula to strengthen her competitiveness and sustain a healthy economic growth. Many economists have discussed these issues but the problem lies in our political system which does not have a strong will in dealing with long-term fundamental issues. Look at China as a real fair competitor, the U.S. must figure out a way to reform her system and assure that she can generate long-term plans (five year or longer) with no budget hiccups to guarantee plan completion and success.
It is not the purpose of this essay to elaborate on what plans should be, but it is worthwhile to list a few items to generate a dialog. First, the U.S. must recognize her economy has been dominated by the financial industry. Capitals are flowing to quick-return financial products instead of low-yield slow return manufacturing industries. Second, to get the U.S. back to manufacturing, she needs to reform her education system. The country needs skilled workers at reasonable cost hence she must convert many general universities to technology colleges and most importantly curtail the inflation on education cost, suppressing it below the rate of GDP growth. China produces nearly ten times more STEM and technology graduates than the U.S. does but at a fraction of the per student cost. Tax incentives must be given to manufacturing and infrastructure investments, so that people are willing to invest there. Tone down rhetoric and military expenses is a sure way to improve the real U.S. competitiveness. The world no longer needs an ideological confrontation dividing the globe or any country. Each country must have her freedom to develop herself and face fair global competition to stay in a harmonious world. The military weapon development is expensive and yields very little return to society other than benefiting a few military supported corporations. The technology transfer to civilian use is hampered by cost and artificial security concern. Turning investments away from military weapon development to civilian infrastructure and manufacturing industries will strengthen real competitiveness for the U.S.
In conclusion, there is nothing wrong to have a calculated strategy and act like a calculated rivalry, the important thing is that the rivalry is built on fair and square competitiveness not creating catastrophe or world war. With God’s given resources and human intelligence, each nation is allowed to pursue her own destiny, political, economical or religious, through fair and square competition based on global institutional rules. Sometimes, nations need to cooperate and forgo competition such as when the globe is facing the challenge of a global pandemic. In other times, nations do compete to strive for success and a better world!
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