SOUTH CHINA MORNING POST
CHINA/US - MARKET TURMOIL NOT
WITHSTANDING, STILL BOUND
TOGETHER
China, it seems, cannot win for
losing. Exports-predator China is always ‘beating us’, bombastic
billionaire businessman Donald Trump declaimed yet again on the campaign
trail. But his timing on this point could have been better as last week
was not exactly the best possible moment to hold up China’s economy as
any world-beater. What with the Mainland’s growth rate slowing and its
stock markets roiling, the panda seemed headed in a direction more
lumbering bearish than takeover bullish.
It would have been more far perversely
astute to point out that even when the panda is hurting, the U.S.
somehow still takes a “beating’. By the end of last week’s China slide,
the Dow Jones followed in step, falling to its lowest level since 2011.
(This was not due to Greece!) Suddenly, our Federal Reserve has to
rethink its plan to push abnormally low U.S. interest rates onto a
higher shelf. So we conclude that, no matter what China does (shine or
slump) its ‘beating’ of America proceeds apace.
Let us not replace irrational
exuberance with irrational pessimism. How to foment a historic Sino-U.S.
partnership that could save us all a lot of grief? For that, we reach
back through history for a consultation with Niccolo Machiavelli,
historically cunning advisor, who always tells leaders to look at the
world as it is, not as they might like it to be. Sure, some Americans
would only be comfortable in a world dominated, as it were, by one huge
Trump Tower, looking down on the globe’s minions, including all 1.4
billion Chinese and a billion-plus Indians. But this is not the world as
it is, or as it will be – ever.
The world as it is, and as it will
remain for the foreseeable future, is one vast network of
co-dependencies (environmental, economic, health) plugged into a common
fate. But judging from the warrior-like roars wafting up from the pit
stops of the U.S. presidential trail, adjustments may prove even harder
for America than China in the attitude department. “We are now all in
the soup together,” muttered one of my smartest friends, a Los
Angeles-based international barrister, reacting to the latest Sino-U.S.
market mash-up.
China is not going to vanish no matter
how much its markets stumble or its Yuan tumbles. Its economic
downdrafts will be felt as if tornado-like downpours in places as far
away as Oklahoma, just as its cheap exports have put smiles on the faces
of children under Oklahoma’s Christmas trees for years. Ill winds of
all kinds travel in both directions: What our Fed does next will be felt
in Shanghai.
So what do we mean when we talk about a
better Sino-U.S. relationship, especially in the middle of this
uncertain economic turn? Almost no one offers clearer thinking than
George Yeo, the former Singapore foreign minister, who in his just
published book, the continuously insightful “Bonsai, Banyan and the
Tao,” writes: “The two countries are now bound together at so many
points, a serious rupture is almost unthinkable. But it is going to be a
very difficult relationship; it will be the single most important
relationship for both countries in this century. If it’s badly managed
there could be war; if it’s properly managed there will be another
generation of peace….”
Without hysteria, we need to accept
that this ‘shotgun’ geopolitical marriage (forced, rather than loving)
will be an inconvenient affair, at times stormy, but at all times so
desperately necessary. Both parties will need to make adjustments in
attitude as well as policy, and they will have to do it on their own,
together: For where will they find a ‘couples counselor’ with experience
of this extraordinary kind to mediate competently?
Might there be some silver linings in
the current economic clouds? Here’s one possible sliver: maybe both
sides tamp down grandiose plans for endless defense spending. Competing
choices have to be made, tough priorities set. The U.S. must accept that
if it tries to do too much globally, it may accomplish little anywhere.
Beijing must accept that if it bets half the Bank of China on a dumb
fleet of aircraft carriers, it will sink the ideal of lifting up all its
people, not just the elite’s yachts.
A keen observer of our oddest couple
is Hugh White, of Australian National University, whose provocative 2013
book ‘The China Choice,’ made the case for a U.S. re-sizing of its Asia
profile. The professor still holds this view, as he told me last week:
“As the seriousness of China’s challenge to US primacy in Asia becomes
clearer to Washington officials, the choice in how to respond becomes
starker. The more they understand the huge costs and risks of containing
China, and the better they see the scale of concessions needed to
accommodate its ambitions, the more likely they will find themselves
drifting towards an option of accepting a much reduced strategic role in
Asia. Yet each continues to assume that the other will give way so they
can get what they want without having to confront the other
militarily. Each is almost certainly wrong.”
Politicians on either side of the Pacific who propose to ‘beat’ the
other offer an unrealistic option, a potentially tragic vision and a
loser’s game plan. America must accept the validity of China’s strength,
as it overcomes setbacks and grows over time, and not foolishly imagine
its rise to be little more than the product of an American decline.
Beijing must kept its silliest generals cooped up and quiet and contain
its naval buildup that’s eating away at its future. Both sides need to
accept their limits so as to expand their possibilities. When push comes
to shove, real trouble will always (pardon the verb) trump imagined
trouble; and of real trouble there will be plenty. Threat invention, on
the campaign trail or inside governments, is quite unnecessary.
Columnist Tom Plate, the Distinguished
Scholar of Asian and Pacific Studies at Loyola Marymount University, is
the author of ‘Conversations with Lee Kuan Yew’ in the Giants of Asia
series.
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