The Gift of the Chinese Visitor

The state visit of Chinese President Hu Jintao was much anticipated and much studied for clues about the relative power of the two countries.  The press has been full of speculation about whether President Obama would bow to the foreign leader as he has to so many others.  But doing so this time would be more profound not only because this was “home” and because it would symbolize the truth to the Chinese view oft expressed that America’s time has passed and we should reconcile ourselves to China’s ascendance to global leadership.

It would only be a matter of time before the yuan replaced he dollar at the world’s reserve currency the Chinese keep telling the world as if to presage a realignment of the geopolitical stars and planets.

None of these things came to pass in the visit which was cordial but distant, intentional but not pretentious, honest but not acrimonious.  Thus the objectives of both China and the US were achieved by the state visit.  No bad things happened, but neither did much good happen either.

Yet as the world press tried to read every smile and smirk to detect the tenor of the meetings there were comparisons galore between the two countries.  This entire news binge was useful and to some degree clarifying.

Here’s my take:

• It was good to welcome Hu Jintao to America and congratulate China on its many accomplishments.  They deserve much praise for what they have succeeded in doing to transform Red China into Gold China with their phenomenal economic growth.

• China should also be praised because it has chosen a path of mercantilism instead of militarism for its ‘great leap forward’ and the world is a safer and better place because of it.

• Global trade works to lift all boats when nations work together collaboratively, and while there are risks to be sure from trade imbalances the opportunities far outweigh the detriments.  America’s relationship today with China is tribute to capitalism and trade more profound than could have been hoped when Nixon went to China the first time.

• America has nothing to fear from an ascendant China.  In truth the risks to America are more serious from a China unable to manage a soft landing for its unsustainable growth, its risk of runaway inflation, and the social unrest that might result from the end of the dream of every Chinese citizen that he too will someday, somehow climb out of poverty to join China’s growing middle class. For much of China poverty remains a reality.

• China is self absorbed and that is good because its problems are greater than its many strengths.  It poses no imminent threat to America’s strategic interests and we should not change our global strategies because of China.  China is a proud nation still shamed from past invasions and insults, but America is not responsible for those sins nor should we change our strategic priorities because the Chinese might take offense.

• America’s economic problems are real but America is resilient.  Our near meltdown experience may even prove providential if it constrains our spending and adjusts our politicians’ aspirations as appears to be in the works.  The genius of America is the capacity to reinvent itself, renew itself, and unleash the creative power of its citizens—and that is exactly what we must do to dig ourselves out of the hole we are in today.  America has learned that it cannot out-source its strategic manufacturing even to a friendly China without adverse effects at home.  America must restore its productive capacity to make things because it is a condition precedent to a stronger America not because we fear or resent China’s growth.

• World trade is good for China and good for America but China cannot live by two rules—access to the world’s markets while restricting access to domestic markets.  America should insist that China plays ‘fair’.

• America is pushing back on cap and trade legislation because Americans realize that killing off the rest of our industrial capacity to reduce greenhouse gas emissions when China, India and other developing countries refuse to play the game does neither the environment for our economy any good.  But allowing China to misappropriate our intellectual property, reverse engineering our technology and export it back to us at lower prices to gain market share for their export growth isn’t going to cut it any more.

• China may not be our friend but it is not our enemy.  While some would like to see us become rivals the truth is China and America need each other more than ever to face the challenges ahead. By pursuing our own strategic global interests, cooperating where we can, competing where we must both nations can have a brighter future.

So it was good for Hu Jintao to come to America to remind us how fortunate we are to live in this great nation so full of potential—and to put into perspective that while China may be growing fast today it faces far greater risks than the US before it can replace us as the world’s reserve currency or the world’s leader.