Is Bush/US positioning itself to crack down on China?

Great Debates
21

It’s a mistake to assume that China will react to a situation the same way the United States would. Just because the United States government would assess the possible economic consequences of a course of action and decide against following it, doesn’t mean China would do the same. The United States is founded on a capitalist system; China just acknowleges some capitalism exists - it’s a fundamental difference. The Chinese government is Marxist - it sees its commercial class as being somewhere between a exploitable resource to a historical relic that will eventually be displaced by a better communist system. The important issue for the government is maintaining its own credibility - if trashing its economic system is a consequence of doing this, it would be regarded as either a minor inconvenience or even a side benefit.

To some Chinese government officials, turning aside from a diplomatic challenge because of a threat to business concerns, would be the same as admitting that China’s commercial interests are more important than China’s political interests. This is not an admission that China’s political leadership is going to make.

22

Are they still? I don’t know much about the Chinese gov’t, but to an outsider they sure don’t seem very Marxist. You certainly don’t see Hu Jintao banging tables with his shoe and claiming that he will bury the capitalist dogs. I’d imagine that at this point most of the generation that fought with Mao in the Civil War is retired or dead. How much of the old rhetoric of Marxism is still quoted by the new guard?

23

Much like Russia, the communist revolution in China served ultimately to substitute a new aristocracy for the old. Not precisely mind you, but it is the better comparison. The intertia of the nation’s history pushed right through the temporary novelty of Marx & Lenin.

To find the ideology of contemporary China then, it is the same as any aristocracy; maintaining the position of the ruling class. Everything passes through this focus. Throw in some Confucian philosophy and a large resentment of foreign influence and there you have it.

As to the OP; furt has it right. It’s unlikely The CP considers China sufficiently stable, or commercially mature to start taking big risks with Taiwan.

Trivia, fly from Taiwan to mainland China and pass through the ‘External Chinese Territories gate’ or somesuch, along with the Hong K’ers and the Macanese, while the rest pass through the ‘Foreign Countries’ gate.

24

I expect that China is much more interested in selling their own locally produced cars and appliances to other countries rather than importing them from the US. This is one of the causes of the huge trade imbalance between the US and China. The US wants China’s goods more than China wants US goods.

25

I don’t think they could, nowadays. The Chinese people have grown too accustomed to moderate prosperity; it would be just too politically risky for the government to meddle with it. And – times have changed. The perceived legitimacy of the Communist Party is not what it was, therefore its power is correspondingly less absolute. Putting down a public demonstration is one thing, but a radical experiment like the Great Leap Forward is quite another. (Stalin did a lot of things Brezhnev never could have gotten away with.)

26

Which is true, but does not contradict Sven’s point. The company that can sell cars to 1% of China’s population will make a fortune.

27

To add: It also does not follow that the US somehow “needs” China more than vice versa. The large majority of the manufactured things the US buys from them could be made elsewere almost as cheaply if need be; the winners of a US v. China trade war would be India and Indonesia. OTOH, many of the high-value things the US makes are not as easily or cheaply obtained elsewhere.

28

It’s true that authoritarian countries are much more likely to make weird decisions because they lack the error-correcting mechanisms of liberal democratic countries. But the rulers of China depend on economic growth and also the perception that economic growth will continue. If the Chinese economy crashes you’ll have hundreds of millions of unemployed workers roaming around with nothing to do. I expect they’ll find somewhere to put their energy.

29

That’s be Volkswagen/Audi. Over half of the market share at present.

China needs the US Market. China also needs the capital, expertise and access to the global commercial system. A good bellweather is the official Chinese attitude to intellectual property (WIPO).

In recent years China has responded to pressure from the US and taken positive steps to protect and recognise foreign IP.

30

China is a country with a capitalist economy and a communist government - this is one reason China is heading for a difficult future.

31

I agree that the economy is, if not capitalist, at least more capitalist then it used to be. But again how specifically is the gov’t communist? It certainly used to be communist, but I don’t really see much that indicates it still is. They recently changed their constitution, for example, to recognize private property. That’s hardly the move of a communist gov’t as I understand it.

You may be right, I know very little about the current CP, but what little I do know doesn’t support the idea of their being commies. Do major party leaders make speeches about increased communal ownership, about throwing off their capitalist oppressors, about the decadence of a capitalist life style? Could be, but you’d think we’d hear some of that rhetoric reported over here in the US if that was the case.

32

First, Sino-American relations are quite complicated.

Second, a lot of people posting and even more in the US are at least one decade out of date with their views toward Red China. Sheesh, the Chinese economy has more than doubled - twice - since 1989 and is not even remotely the same society.

Third, Dubya actually has some connections with China. He visited in the 1980’s when his father was the Ambassador. The “extended” Bush family has investments including golf courses in China. Someone else can go dig up a cite or take my word for it. Suffice to say, my best guess is that he’s got a little bit better channel of information than he does about most world affairs.

Fourth, Dubya is in Korea for APEC and therefore in the headlines. Like Richard Milhouse Nixon, there is no way Bush can come to Asia without saying something encouraging about Taiwan democracy and make a jab toward Chinese human rights. It’s good political hay and the Chinese leaders understand media rhetoric much better than most.

Fifth, Chinese government faustian bargain is that in return for the masses to make more money, don’t overtly challenge the right of the erstwhile communist party to rule. It’s a system that has worked reasonably well over the past 10+ years. And as long as the overall economy continues to grow at a strong pace (say 6-8% per annum), then most people are pretty happy with the system.

Sixth, VW does not own 50% of the market share. You have to understand that in China, certain industries including automotive are legally limited to a 50% foreign ownership stake. In the case of VW, they have Shanghai VW (50-50 joint venture) and FAW-VW (60% owned by FAW and produces the Audi). These two ventures combined are what the market share is based on. Please note, these two companies are fierce competitors with each other in the China market. At one time 10 years ago, the combined share of these two companies was significantly greater than 50%. SVW has the higher output.

IIRC it was 3Q2005 that Shanghai GM (50-50% joint venture with the same JV partner as SVW), took on the highest market share of any producer in China. I don’t have the research report in front of me, but that means SGM has more than 15% market share and was the first time SGM overtook SVW. Admittedly, that’s a little skewed as SGM includes SGM Wuling production of ultra-mini vans that are basically rubber band powered tin cans.

Seventh, China needs to export to the rest of the world to keep up the growth that underpins the faustian bargain. The rest of the world needs China’s imports (admittedly over time, the imports could come from other countries like India, but that requires a ramp up time). The US needs China to finance the deficit and national debt - or US consumers could cut up their credit cards, quit taking out 30 year zero principal mortages, the cut-tax-and-spend party in power could actually balance the budget and pay off the national debt, etc. Naw, it’s easier for the US society to spend like a drunken sailor and become the banker’s problem.

So, it’s unlikely for China to cut off credit to the US. At the same time, the US needs to understand that the game is changing. China can’t dictate to the US, and by the same token the US can’t dictate to China. Both sides needs to be congnizant that a) one should be nice to your banker and b) one should be nice to the customer.

Sino-American relations are not neccessarily a meeting of equals, but the balance is tipping that way.

33

Right now, American companies who sell manufactured goods, in I’m sure you will admit a great many cases, have them manufactured in China and other parts of SE Asia.

Lately, the information systems that help govern these manufacturing and distribution lines are increasingly created, maintained, and supported from India. The trend is for the American companies to act chiefly as administrators over a system that is largely run out of Asia.

The gains in wealth in Asia recently have been staggering. My God, look at the footage from Shanghai on the Today show just a couple of weeks ago.

So what happens when the Asian manufacturers and the Indian IT companies realize they are perfectly capable of administrating their own businesses without Americans at all? That’s what these talks are presaging. Booting out the American CEOs does nothing to the manufacturing, distribution and IT systems that are already there. They just need someone to run them.

In short, the world economy has decided in large part that it doesn’t need expensive and inconvenient American factory workers, and increasingly has decided that it doesn’t need expensive and no-more-conveneint-than anyplace-else-thanks-to-the-internet American IT workers either. Once it decides it doesn’t need expensive and inconvenient American corporate officers, what’s left for us in this country? For now, China needs the US market, but with other contries becoming more prosperous on their own, our importance as a customer diminishes.