U.S.-Chinese Summit Leaves Strategic Relationship Unexamined By Ivan Eland

May 01, 2006

Chinese President Hu Jintao’s visit to the nation’s capital last week was an especially noteworthy disaster. A summit that should have dealt with the vital issue of how the United States can peacefully acknowledge China’s rise as a great power focused instead on narrow trade and proliferation issues and became a farce of administrative snafus.

Before Hu even arrived in Washington, the status-conscious Chinese were already miffed at getting only a “working lunch” rather than a full state dinner from President Bush. Exacerbating the dispute over protocol was a blunder by the White House announcer who mistakenly called Hu’s People’s Republic of China by the moniker “Republic of China”—the official name of its archenemy Taiwan. The indignant Chinese Foreign Ministry, which always reads the tea leaves in China-U.S.-Taiwan relations very closely, cancelled a briefing with reporters in protest. If all that wasn’t controversial enough, the administration gave press credentials to a reporter from a Falun Gong publication, who took the opportunity to shout down Hu for some time before being hauled off by security officials. If this was merely more Bush administration incompetence, one wonders if the White House might some day accidentally admit a reporter from an Iraqi insurgent newsletter or an al Qaeda website to a presidential function.

Even worse for the country than the Bush administration breaches of etiquette is the administration’s policy toward China. Mr. Bush—president of the number one oil-consuming nation on the planet—spent the summit castigating China for its rising appetite for oil and its consequent reluctance to impose sanctions on the oil-producing and nuclear aspirant Iran.

President Bush also pleaded with China to use its influence to implore North Korea to get rid of its nuclear weapons. Although the Chinese are not thrilled with a nuclear North Korea, they regard the status quo as preferable to the U.S. creating instability on their borders. In the long-term, however, Iran and North Korea will probably become or remain nuclear powers, respectively, and the United States will likely be able to do little about it.

Finally, the U.S. government, historically critical of the Chinese government’s excessive interference in China’s society, is now telling China how to run its economy. The United States has asked China to increase the value of its currency, which would make China’s exports more expensive in U.S. markets. The United States has also pressured China to drop its export- and investment-driven economic growth in favor of growth from the stimulation of domestic demand. Those changes would reduce Chinese exports to the United States and likely increase U.S. exports to China—thereby reducing the bilateral trade deficit.

But the U.S. trade deficit—and especially a trade deficit with any one nation, such as China—is not necessarily a bad thing. It means that consumers in the United States are wealthy enough to buy imported goods. Many of these goods can be produced more efficiently and cheaply overseas in countries like China. If the Chinese government wants to keep its currency artificially low and run an export- and investment-driven economic boom, the costs from this interference with the free market accrue mainly to the Chinese people. American consumers benefit from cheaper Chinese imports. Of course, free commerce is better for all nations and people, but if the Chinese government is shooting itself in the foot and U.S. consumers are benefiting, why is the U.S. government pressuring China so hard for a change in policy?

The biggest problem with U.S.-Chinese relations, the U.S. informal containment policy against China, was not even discussed at the summit. Although the United States has a much richer commercial relationship with today’s China than it did with the Soviet Union, strategically the Bush administration is running an informal Cold War-style containment policy against China. The United States has strengthened Cold War-era formal and informal alliances (the one with Taiwan is the most potentially explosive), augmented the already far-forward U.S. military posture in the Western Pacific, East Asia, and Central Asia, and cultivated better relations with China’s rivals (India and Russia). But China is a rising power and will naturally want more control over security in its neighborhood.

Because a vast ocean separates China and the United States, the United States will have the luxury of accepting, without endangering its security, reasonable Chinese aspirations for a greater sphere of influence in Asia. The United States should retract its security perimeter and accommodate China’s rise as a great power, much as the British Empire peacefully did with the United States in the 19th century. Above all, the U.S. government should not put the lives of its 300 million citizens at risk from a Chinese nuclear attack merely to guarantee the security of the non-strategic and wealthy island of Taiwan.

Alvaro Vargas Llosa is a Senior Fellow and director of The Center on Global Prosperity at the Independent Institute. He is the author of Liberty for Latin America.

Robert Higgs is Senior Fellow in Political Economy at The Independent Institute, author of Against Leviathan and Crisis and Leviathan, and editor of the scholarly quarterly journal, The Independent Review. Click here for a bio on Dr. Higgs, the noted economist and historian.

William Marina is Research Fellow at the Independent Institute in Oakland, Calif., and Professor Emeritus of History at Florida Atlantic University.

David T. Beito is a Research Fellow at The Independent Institute, Associate Professor of History at the University of Alabama, and co-editor of the book, The Voluntary City: Choice, Community and Civil Society.

William Marina and David T. Beito belong to "Liberty and Power," a group blog at the History News Network.

For further articles and studies, see the Center on Peace & Liberty and OnPower.org.

Nicolas Heidorn is a public policy intern at The Independent Institute in Oakland, California.

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