Relax, and Trade With a Well-Oiled Empire

August 8, 2005
Anne Wu

The Los Angeles Times
An American friend suggested recently that the United States is not fearful enough of China’s rising economic strength. The Pentagon issued a report last month warning that China’s growing military power might prove too tempting for Chinese leaders facing international disputes.
But many of China’s neighbors see Beijing working to build an amicable and prosperous region. The Assn. of Southeast Asian Nations, or ASEAN, once viewed China with great suspicion. But that changed, thanks to steps taken by China, including holding annual summits with ASEAN, adopting a code of conduct for the South China Sea that stresses the peaceful settlement of disputes, and embarking on a free trade agreement with ASEAN. China’s bilateral trade with ASEAN nations reached $160 billion last year, with a surplus of $20 billion in favor of ASEAN members. Many smaller Asian nations are now riding the Chinese economic bandwagon they once feared.
Americans, however, see a rising competitor whose values and worldview conflict with their own. Many of Washington’s elected officials worry that China’s economic growth is snatching jobs from American laborers and see China’s military as a growing threat.
Economically, Americans cannot be blamed for being nervous. The United States had a $162-billion trade deficit with China in 2004. The Chinese hold $191 billion in U.S. Treasury bonds. Labor is so cheap in China that the currency could double and the cost of labor would remain competitive.
Yet on the other side of the trade coin, China has become the United States’ fifth-largest export market and second-largest source of imports — many of them cheap goods that U.S. consumers snap up. Bilateral trade reached $231 billion in 2004.
Many Chinese have difficulty understanding U.S. concerns about China’s military, given that the U.S. military budget is 47% of the world's combined defense spending, according to the Stockholm International Peace Research Institute.
U.S. resistance may delay China’s growth, but it will not be halted. Instead of wringing their hands, U.S. officials should ask what poses a bigger threat: a prosperous and cooperative China or a poor and hostile one?
As former President Clinton said to then-Chinese President Jiang Zemin in 1995, we are not as afraid of a rising China as we are afraid of a declining China. A collapsing China would ripple through the entire Asia-Pacific region and possibly send it into chaos. The world economy would lose a powerhouse.
Conversely, a vibrant Chinese economy would lift more citizens out of poverty and, if that happens, an appreciation for democracy will rise because it flourishes with economic development rather than with continuing poverty, as demonstrated in developed areas of China.
No country is challenging U.S. world supremacy, yet that supremacy depends on the U.S. reaching out constructively.
If Washington becomes more accommodating of nations with different systems of government, communism would seem less heinous, and communication more appealing.
The United States, with its unrivaled strength, should take it easy.

Anne Wu is a fellow at the Belfer Center for Science and International Affairs at Harvard's Kennedy School of Government. She previously worked for China's Foreign Ministry.

John F. Kennedy School of Government 79 John F. Kennedy Street
Cambridge, MA 02138
617-495-1100 Get Directions Visit Contact Page