Daily Times

Would the United States of America have a balanced, mutually supportive and sustainable approach to the People’s Republic of China with Donald Trump at the steering or muddle through the narrow and trade-based policy as has been the case up till now is the moot question troubling the minds of many analysts. Today, China has emerged as an economic power to reckon with, though much behind the USA in the military and technological development. Many in USA believe that it has not only the potential of threatening the USA economic and political primacy in Asia, Africa and South America; it is on the way to create its own kind of regional order to the peril of the current international order dominated by the USA-led Western world.

Since the Mao Zedong-led revolution of 1948, China has always been a riddle for the USA leadership – may it be the conflict between the revolutionary communists and the nationalists in the China’s pre-revolution civil war between whom George Marshall, the USA special envoy hoped to broker truce, or the Truman administration’s high expectations that China would not interfere in the Korean war, or the President Johnson’s unfounded assumption that Chine would restrain her involvement in the Vietnam war, or recent USA leaders complacency that it would not counter their policy of ‘pivot to Asia’ and let India emerge as counterpoise to it. All the USA expectations in the past were dashed by the smart Chinese leadership. Richard Nixon had once said that the “World cannot be safe until China changes. Thus our aim, to the extent that we can influence events, should be to induce change in China”. They induced change in China of some other kind impelling it to accomplish miraculous economic success.

Since the opening of diplomatic relations between the two countries from the early 1970s with the express help of Pakistan, the successive USA administrations have premised their country’s China policy on certain assumptions: with deepening diplomatic, economic and commercial interaction with the Western world and the accruing prosperity, China would veer to respecting the rule-based international liberal order: order that overtly championed the opening of closed societies, economic reforms, liberal trade, investment-friendly policies providing level field to domestic and foreign firms, promotion of democracy and universal human rights, and the consolidation of international peace and security but was actually promoting the Western world’s agenda of political and economic dominance. What was implicit in this assumption was the hope that China would recognize the primacy of the USA in the world affairs with the American leadership’s option for China bashing. While dangling the carrot of the riches accruing from an unhindered access to the world markets, the USA was promoting its military and technological prowess and forging strategic alliances with the other countries of Asia and South East Asia as a stick to tame the rising dragon.

While dangling the carrot of the riches accruing from an unhindered access to the world markets, the USA was promoting its military and technological prowess and forging strategic alliances with the other countries

China knew the Western policy behind the diplomatic niceties. Even then, it responded to the US policy in earnest without compromising on what served its national interests. This bonhomie began from the early 1990s. The US granted China ‘most favored nation’ status in trade in the 1990s and supported its accession to the World Trade Organization in 2001. Both the countries established a high-level economic dialogue in 2006 and negotiated a bilateral investment treaty in Obama administration. These decisions gave a boost to trade in goods between the two countries. The quantum of bilateral trade exploded from less than $8 billion in 1986 to over $600 billion in 2016-2017. Similarly, the bilateral investment also registered a tremendous increase reaching $200 billion in 2016. However, the bilateral trade was heavily tilted in favour of China by $376 billion which proved to be a continuous cause of concern for the USA leaders.

The massive export of the cheap Chinese goods to the USA adversely affected the output and competitiveness of the American products forcing many big manufacturing factories to shut down or relocate their production units in the developing or under-developed countries including China where the cost of production was much lower than the domestic labour market. This drove the unemployment ratio high in the US and many European countries. This, combined with the Chinese accession to the WTO buttressed its endeavour to capture maximum part of the Asian, European, African and South American markets. Its bilateral trade and investments in the developing and developed countries registered tremendous increase. China started earning over $300 billion each from exports to Africa and South America in 2011-2012. Its bilateral trade with Russia reached $300 billion in 2012 rising from the meager $90 billion in the early 2000s. The volume of her trade with India also increased to $90billion. In the last two decades, Chinese economy expanded fast and uncoordinated at the growth rate of 11% putting a question mark on its sustainability. The Chinese leaders recognized the inherent problems in their approach to the world trade almost a decade ago and the growth rate was balanced at 8% which has since displayed stability.

From the early 1990s to the start of the 2000s, China started behaving as a responsible emerging super power. She accessed to the Non Proliferation Treaty and joined the Asia-pacific and Europe Cooperation (APEC) and took part in major diplomatic efforts including the six-party talks, and the P5+1 negotiation to deal with the nuclear weapons programmes of North Korea and Iran respectively. She also took measured steps to reform her economy, liberalize investment policy and accommodate foreign investors in her special industrial zones. However, these reforms proved far short of the expectations of the USA leaders. Thus, their known mantra of ‘do more’ has ignited a trade war between the two giants of the world with President Donald Trump adding fuel to the fire.

(To be concluded)

The author was a member of the Foreign Service of Pakistan and he has authored two books