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2 China-US: A long, hot
summer By Benjamin A Shobert
WASHINGTON - In what promises to be a
long, hot summer, US Treasury Secretary Henry
Paulson's recent defense of the second
Beijing-Washington Strategic Economic Dialogue
(SED) seems to suggest how profound the disconnect
is between the Bush administration and the mood of
the US public and Congress regarding relations
with China.
Last week, Paulson defended
the SED and cautioned against
what
he saw as the greater danger of Congress and the
"strong protectionist tide" that is currently
gaining momentum on Capitol Hill.
Paulson's comments have to be seen against
the broader tapestry of the historical model of
engagement between China and the United States, a
policy unlikely to be changed by the
administration of President George W Bush, but
very much at odds with the mood of the American
people and their most recently elected
representatives in Congress.
Paulson's
comments during a speech last Tuesday at the
traditionally conservative Heritage Foundation
continues to reflect an almost faith-based precept
that criticizing more fundamental problems with
China's adherence to global norms of
accountability has the potential to upset the
apple-cart and is to be avoided at all costs.
After decades of normalized relationships
between Beijing and Washington, it strikes many
observers as hollow that Paulson would again make
reference to the need to be patient and "build
relationships". Absent the executive arm of the US
government, the growing majority of legislators
believe enough relationships have already been
built with China and sufficient time has certainly
been granted. The continued statements from the
administration referencing the need for patience
and "smaller, deliberate steps" are falling on
increasingly deaf ears as more people in the US
begin to believe that whatever relationships need
to be built already have been, and what must now
happen is accountability to existing agreements,
not avoidance of confrontation.
For
Capitol Hill, Paulson's latest speech comes on the
heels of one of the more eventful periods for
Sino-US relations, perhaps more significant even
than last year's much-lauded visit of President Hu
Jintao to the United States. As the dust settles,
it will become increasingly clear that the past
several weeks represent a pivotal moment when the
economic and political concerns of the two
countries may have begun to become no longer
mutually beneficial; the US elevating China as a
scapegoat to its economic woes, and China
perceiving US efforts to open its society further
as a threat to its fragile unitary political power
base.
US politicians are aware that they
gained little if anything from the recent SED, and
the consensus in Washington that China needs to be
reminded of the United States' greater economic
and geopolitical clout is beginning to grow.
Paulson obviously resents such a conclusion and
believes it is predicated only on crass political
motives, stating that "the task of the SED is
long-term, and that is difficult in a town where
short-termism is the order of the day". It is true
that Washington lives on political calculations
that are largely short-term in nature, but equally
right are those who measure China's modernization
by its willingness to commit to the global norms
required by its membership in such organizations
as the World Trade Organization (WTO) and are not
satisfied with the country's progress.
Given that it very much appears that China
is enjoying its increasing leverage over the US
economy, it is becoming additionally unlikely that
the United States' ability to pressure China and
get whatever it wants will continue. Recent
headlines from the state-controlled Shanghai Daily
- "China-US talks hailed as 'complete success'" -
are broadly interpreted in Washington as
indicative both of China's broad disconnect from
reality and its leadership's insensitivity to the
issues being raised. Long gone is any semblance of
Chinese kowtowing to Western superiority.
Both the most recent SED and Paulson's
comments last Tuesday seem to reflect an implicit
awareness that China may be gaining the upper
hand, and that it is now Washington that fears
upsetting Beijing. Forced to provide some
meaningful outcome of the SED, Paulson on Tuesday
pointed out that "we announced a new air-services
agreement that will make it easier, cheaper, and
more convenient to fly people and to ship goods
between the US and China". For Congress members
under pressure to abate China's mercantilist
policies and its currency manipulation in the
hopes of protecting US manufacturing jobs, adding
new air routes between the countries rings very
hollow.
For those who have watched
US-China relations develop over the past 20 years,
it is common to read nothing surprisingly new into
these exchanges. The same issues raise their head
from time to time, and appear to be externally
dealt with by incremental changes from China,
which cumulatively results in only the most
gradual and minimal of more substantive change.
But when both Democrat and Republican parties
agree that China must make changes to its trade
policies and WTO compliance or else suffer the
repercussions, Washington is signaling to Beijing
that hyperbole is giving way to legislative
action.
Add to this the ongoing
frustration in Washington regarding the inability
of either party to add clarity to how the US
should extricate itself from Iraq, and the
political reality is that both parties want to
appear as if they are empowered, active and
insightful on matters relevant to their
constituents, with China providing an ideal outlet
for their need to act.
Republican
Congressman Don Manzullo, historically a strong
advocate of free trade, summed up the current
climate in Washington about China's trade policies
when during the meeting late last month of the
US-China Economic and Security Review Commission
he testified that, regarding China's trade
policies, "this Congress is really, really upset"
and warned that legislation such as the
Hunter-Ryan Bill (also known as the Fair Currency
Act of 2007) "has legs to it".
Similarly,
Senators Chris Dodd (a Democrat) and Richard
Shelby (a Republican) in a letter to Paulson on
May 20 wrote: "Should you find that Treasury's
existing authority is insufficient to eliminate
these unfair trade practices, we expect that you
will communicate to the Senate Banking Committee
any legislative options that may be necessary for
improving our nation's ability to ensure a level
playing field for US firms and workers."
Not to be outdone, in mid-May the House of
Representatives Ways and Means Committee released
a bipartisan letter to Chinese Vice Premier Wu Yi
stating: "More generally, the committee is
increasingly concerned about trade-distorting
subsidies in China. When it acceded to the WTO,
China agreed to immediately eliminate its
export-subsidy programs. Unfortunately, China has
failed to do so. A number of subsidies
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