China, 90s style

This may date me, but I recall a time before China was the inevitable next superpower and before anxiety at its rise colored the public discourse about it. Ah, yes, I remember it well, the mid 90s. The Soviet Union had just been buried, Europe was heading towards unification, and the US was looking at post-Tienanmen China a little askance, trying to figure out how best to deal with a country at once officially Communist but increasingly open for business. US strength was at an all time high and China, now only very poor, was then desperately impoverished - the balance of power favored the Americans, and they had a decision to make as to how they wanted to proceed.

The lines in the debate were clear - containment vs. engagement. This dichotomy was hegemonic over the discourse everywhere; it framed the debate among journalists, politicians and academics. Containment entailed one or more of the following: diplomatic isolation; military encirclement; economic restrictions (perhaps even sanctions in light of Tienanmen and Tibet); and support for dissidents and minorities. Engagement represented cooperation with the government of the People's Republic on diplomatic and security matters in the region; a softening of relations between the two countries; a studied silence on human rights and democracy issues; and, most consequently, an open economic relationship, with open trade and investment.

Interestingly, the discourse around the debate was also dominated by a hegemonic narrative - containment was the policy of nationalists and cold war relics, mainly conservative thugs like Pat Buchanan. To the extent that the Red State conservative base cared about these issues, they favored containment, as did "Reagan democrat" unionists anxious over the trade aspect. Engagement, on the other hand, was the hip, cosmopolitan thing - favored by the Washington and New York elite, it quickly dominated in the media and among academics as the policy of choice. It also had the advantage of seeming so reasonable and measured compared to the bellicosity and paranoia of containment, acknowledging that foreigners could - perhaps even should - sometimes be consulted and partnered with in foreign policy. I favored engagement instinctively and vocally, but I can be forgiven as I was fifteen. I was also hopelessly naive, and imagined the goal to be the welfare of the Chinese people who I imagined as a super-cool though incomprehensible amalgam of Charlie Chan and Bruce Lee (I grew up in a small, very white town). But apart from 15 year old provincial Canadians whose unconditional support the partisans of engagement could rely on right off the bat, more mature Americans need to be brought on board, and they were sold engagement like so: diplomatic cooperation would make the PRC government feel more secure, leading to the reduction of tensions in East Asia and a collaborative solution to regional problems (read North Korea); stepping away from containment would reduce PRC need to respond, lessing the likelihood of a Chinese military build-up; working with the PRC in multilateral forums would strengthen the US position in the UN, and improve the functioning of international organizations; and rising prosperity would create a middle class which would press for democratic reform. Never mentioned directly, but sometimes referred to obliquely (and appearing often in economic contexts) was another rationale - China was going to be big money for the smart, the ambitious, the quick-moving. It turns out that that was probably the only reason that mattered.

Of course, once the debate was framed in those terms - as a contest between status-quo cold warriors and thuggish nationalists versus right-thinking, future-embracing cosmopolitan elites - everything was over but the crying. Most favored trading status was extended to China, American businesses aggressively invested in the China trade, and - under arch-Republican George W. Bush - the People's Republic of China, a Party dictatorship where Mao appears on ALL of the money became a key member of the World Trade Organization. The effects on the global economy were epochal - American manufacturing, in crisis ever since the oil shocks of the 1970s, decamped to the Pearl River basin and the environs of Shanghai, joined there very quickly by the final assembly and labor-intensive segments of Japanese and European production. The effects on the US domestic economy were varied - the move of polluting industries overseas likely contributed to the environmental improvement of the 1990s, and shareholders in firms engaged in outsourcing - together with the consultancies that facilitated the move and the financiers that underwrote them - reaped enormous windfalls. Consumers gained access to ever-cheaper mass goods, which was vitally important because they were also forced into lower-paying service industry jobs. The China trade represented a huge economic windfall which could have been distributed out to the benefit of the US as a whole. It wasn't, and instead became one of the main drivers for widening inequality.

Well, what about the other benefits of engagement? Where is the kinder, gentler People's Republic that all of that investment was supposed to by? Judged by it's own promises, the policy of engagement represents a complete failure.

1. China is militarizing anyway. Rather than trusting to economic inter-relationships to generate mutual interests with its rivals, the Chinese government is going ahead with plans to expand and modernize its military to begin to rival the United States (which, remember, has done its part by degrading its military through endless, fruitless military interventions). On top of conventional forces, the Chinese have demonstrated serious capacity for information war - their test of a satellite-killing missile in 2007 shocked the Pentagon, while their proficiency at cyber-warfare is well understood.

2. China is not a regional partner. North Korea is crazier than ever - engagement with China has not succeeded in reigning in the Hermit Kingdom, which has gotten more and more bellicose through the entire period, testing nuclear weapons, selling nuclear secrets, and even firing on South Korean territory. And while China hasn't been willing or able to influence it's Korea to behave nicely, it hasn't improved relations with US allies in the region either. The relationship with Japan at an official level remains as tense as ever, while the attitude of the mainland Chinese people towards the Japanese has only hardened. After a flawed Asia cup final match in 2004, violent rioting erupted, with Chinese fans assaulting the Japanese team's bus. More recently, a Chinese fisherman refused to defer to Japanese Coast Guard vessels in disputed waters, triggering his arrest and a protracted diplomatic crisis.

3. China is as authoritarian as ever. Repressive violence in Tibet and Xinjiang is intense, sparking periodic riots and disturbances, which then trigger another round of repressive violence. The internet is censored, and government-employed internet trolls plant propaganda on message boards while harassing dissidents. The regular press is severely restricted. And they have this guy under house arrest, and wouldn't even let him pick up his Nobel prize.

In a way, the utter failure of strategic engagement to deliver on its promise (and instead transform the domestic political economy in the direction of greater instability and inequality) should discredit the policy - and those who pushed for it - in the same way that the 2008 crisis exploded neo-liberal myths about the panacea of financial deregulation. But it is never put in these terms. Why? That's a question for another post...