Risky Trends in U.S.-China Ties

July 18, 2002

WASHINGTON, July 17 (UPI) -- The U.S.-China Security Review Commission released its first annual report to Congress July 15. The report examines the growing U.S. economic relationship with China and its implications for American national security.

The Commission was created by an act of Congress and its 12 members were appointed by the Republican and Democratic leaders of the House and Senate -- three by each party in each chamber. The Commission is composed of an eclectic mix of former government officials, businessmen, labor leaders and scholars from think tanks and universities.

The enormity of the challenge posed by a rising China brought the commissioners together. China is a rapidly industrializing land of 1.3 billion people, under an authoritarian regime that is fanning the flames of nationalism and resentment against the West.

The report looks at the conflicting national perspectives of the world held by Washington and Beijing and concludes: "The two countries have sharply contrasting worldviews, competing geostrategic interests, and opposing political systems."

The Commission found, "Chinese leaders consistently characterize the United States as a 'hegemon,' connoting a powerful protagonist and overbearing bully that is China's major competitor, but they also believe that the United States is a declining power with important military vulnerabilities that can be exploited." In short, America's days as world leader are numbered, and China's emergence will bring about the final countdown.

China's military modernization is aimed at defeating the United States, especially in any battle over control of Taiwan. Beijing is also a major source of technology proliferation that is helping put weapons of mass destruction in the hands of rogue states and terrorist groups. The Commission explains China's motives: "Beijing's relationships with terrorist-sponsoring regimes provides China with leverage against the U.S., enhance China's political and military influence, and provide the PRC with foreign exchange and access to energy sources."

The Commission believes that China's ties to terrorist states have continued despite the Sept. 11 attacks on the United States. One way Beijing prevents radical Muslims from aiding their brethren in China is by supporting their efforts against the West.

The Commission's conclusions about China's antagonistic policies would be disturbing enough, but the largest part of its report is on the ways the American corporations are helping China to become the dominant power in Asia.

There are chapters devoted to China's patterns of trade and investment, its membership in the World Trade Organization, its regional economic power, its use of American capital markets to fund state projects, and the transfer of U.S. technology to China's military-industrial sector (by both commercial and covert means). The Commission found:

-- The United States has been a major contributor, through trade and investment, to China's rise as an economic power.

-- There is plausible evidence that the burgeoning trade deficit with China will worsen despite China's entry into the World Trade Organization.

-- The large number of Chinese students, scholars and researchers present in the U.S. academic and industrial establishment is a principle means used by China to acquire U.S. science and technology.

-- China's manufacturing capability in advanced technology products has expanded dramatically; the United States now runs a trade deficit with China in a majority of the items on the advanced technology list compiled by the Commerce Department.

-- Over the next 10 years China will acquire a modernized industrial capacity to build advanced conventional and strategic weapons.

-- The United States may be developing a reliance on Chinese imports that could in time undermine the U.S. defense industrial base.

One commissioner refused to sign the report, William Reinsch. An under secretary of commerce in the Clinton administration, Reinsch is now president of the National Foreign Trade Council, a business group whose members include firms working to expand China's technology and industry.

NFTC is also parent to USA*Engage, a lobbying arm created to oppose any constraints on trade based on foreign policy or national security concerns. Though originally focused on removing sanctions from rogue states such as Iran, Cuba, Libya and Sudan, USA*Engage has also opposed any controls or conditions being placed on China.

In his dissent, Reinsch claimed that "the Report ignores or denigrates the positive role of American business in bringing free market principles and democratic values to China." But it is not that the Commission didn't look, it just couldn't find much evidence to support Reinsch's optimism regarding the ability of foreign business to tame Beijing's rulers.

The kind of fundamental political change that is needed in China usually comes as the result of the failure of a regime, not its success. A lost war, financial collapse or massive corruption are the kinds of events that can de-legitimize a regime and lead to its replacement by democratic forces.

Helping the communist rulers in Beijing bring more prosperity to China and play a larger role on the world stage is hardly the way to undermine support for the regime.

The Commission takes a more measured and realistic view than the economic determinism offered by the transnational business lobby. "The Commission does not believe that anyone can confidently forecast the future of China....while we can work and hope for the best, our policymakers should prepare for all contingencies."

The most dangerous of those contingencies is that "China becomes rich but not free...and in direct competition with us for influence in Asia and beyond." At the moment, that is the path Beijing is on.

William R. Hawkins is Senior Fellow at the U.S. Business and Industry Council in Washington.
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