China and the Bushes
Does the Bush Administration’s approach to China mirror that of the early Clinton era?
July 6, 2001
Although it is almost forgotten by now, Bill Clinton had been very critical of the first Bush Administration’s attempts to pursue constructive engagement with China during his 1992 election campaign. He thus felt compelled to remain hostile toward China during 1993.
When he discovered the growing level of corporate interest in China trade and investment opportunities, his opinion gradually changed. By 1998, he had become a strong supporter of China’s admission to the World Trade Organization.
The new administration faces many of the same contradictions over China policy as the previous one. There are Republicans who want the Bush Administration to focus on issues such as human rights, Tibet, religious freedom and Taiwan’s security. There are others who want to promote trade and investment as part of a global agenda which regards economic liberalization as an essential prequisite of political freedom.
What distinguishes the current administration from previous ones is that the new president has some extraordinary personal relationships with China through family and friends. First, both his father and own uncle (Prescott) have had extensive business dealings in China during the past decade.
The father, even before his term as the 41st president of the United States, served as the head of the U.S. Liaison Office in China from 1974 to 1975. And he has helped U.S. insurance companies to seek licenses from the Chinese government. The uncle created the U.S.-China Chamber of Commerce and owns a golf course outside Shanghai.
Second, the new U.S. ambassador to China is a Hong Kong-based lawyer, Clark Randt, who has known the president since their university days. The new ambassador has a far greater familiarity with the intricacies of China’s economy, legal system and politics than any other U.S. ambassador of the modern period. The fact that he also knows the president as a friend should give more influence than if he were a traditional civil servant or political appointee.
What is likely the effect of all these family (and friend) connections on U.S.-China policy? The president’s personal relationships lessen the risk that foreign policy hard liners will be able to persuade him to pursue an overtly hostile policy towards China.
In fact, as the recent Hainan airplane incident attests, the administration responded in a calm and deliberate way to an event which could easily have escalated into a damaging confrontation. The Chinese government also showed good sense by restraining anti-American demonstrations and releasing the plane crew before the U.S. Congress returned from the Easter recess.
But the fact remains that there are military players in both Washington and Beijing with a clear agenda to promote distrust and tension. The Chinese military is still engaging in regular maneuvers near Taiwan. And it permitted its pilots to engage in a strafing mission against the U.S. reconnaissance plane which could have ended in the deaths of 24 U.S. military personnel, not just the Chinese pilot.
U.S. Defense Secretary Donald Rumsfeld, for his part, wants to engage in a major redeployment of U.S. military forces from Europe to Asia. He needs the Chinese threat to justify the spending.
Under those circumstances, the Bush administration will have to work hard to keep U.S. policy focused on constructive engagement to capitalize on the tremendous potential for foreign policy and human rights improvements which are created by the transformation occurring in China’s economic and social systems.
In this regard, the first essential point which the U.S. administration must therefore understand is that China is in the midst of one of the most extraordinary economic transformations to occur in any country since the industrial revolution. Since the late 1970s, it has been abandoning communism and introducing a market economy.
As the continuing chaos in Russia vividly illustrates, there is no simple formula for managing the transition from communism to capitalism. Academics have spent over 100 years writing about transitions the other way.
The second important point for the Bush Administration to understand about the China’s transition is that the government is strongly committed to the development of high-technology industry. This will automatically weaken its control over the communications system and distribution of information.
The statistics for China’s place in the new global information economy are very impressive. There are 100 million people with cable TV, 100 million with cellular telephones and about 30 million accessing the Internet through personal computers.
Given computer sales in China are close to eight million per annum, the number of Chinese on the Internet will easily exceed 70 million in 2005. Sales of cellular telephones also average about two million per month while the number of people on cable TV could double by 2005.
President George W. Bush seems to be aware of what is at stake. As he himself explained in a recent speech, “Open trade is a force for freedom in China, a force for stability in Asia — and a force for prosperity in the United States. Free trade has expanded the portion of China’s economy that is independent of the state.
Free trade has swelled the ranks of China’s independent businessmen and reduced the sway of China’s government. Free trade has introduced new technologies that offer Chinese people access to uncensored information and democratic ideas. When we open trade, we open minds. We trade with China because trade is good policy for the economy. We trade with China because trade is good policy for our national security.”
The tone and clarity of President Bush’s comments suggest that he strongly sympathizes with those in the U.S. debate who believe that economic engagement will have the potential to resolve other potential problems, ranging from human rights to military security.
President Bush will travel to China during October to attend the APEC meeting and have a bilateral visit with President Jiang. If he can make his recent statements about trade policy, cited above, an effective anchor for the whole U.S.-China relationship, then the process of integration will continue to evolve, holding both countries’ hard-liners in check.
Chicago-based macroeconomist and chairman of David Hale Global Economics, Inc. David Hale was formerly chief economist for Kemper Financial Services, and was named global chief economist for Zurich Financial Services when Zurich purchased Kemperin 1995. He advised the group’s fund management and insurance operations on both the economic outlook and a wide range of public […]