“This is a great example of what we can do to not only to save lives, but add jobs.”
— Sen. Amy Klobuchar, speaking about medical devices Oct. 10 at the Hormel Institute.
In presidential debates, former Massachusetts Gov. Mitt Romney claims that he would label China as a currency manipulator on “Day One” in the White House. It is a sharp contrast to the president’s “No Drama Obama” approach to China policy.
In the cacophony of China-bashing and scapegoat rhetoric, Beijing’s currency manipulation is a major concern. The issue, however, is a double-edged sword: America’s insistence on the appreciation of Chinese currency (the Renminbi or Yuan) may benefit the U.S. manufacturing sector, but will surely lead to higher costs for American consumers for imported Chinese goods.
The real question is the national debt, for which China and Japan hold $1.15 trillion and $1.12 trillion respectively. When the Chinese share of our national debt as a percentage of the total U.S. public debt (and the yearly interest payment of over $25 billion to China) declined over the past two years, the value of Renminbi exchange rate against the dollar appreciated. And America’s trade deficit with China declined.
To reduce public debt and trade deficit, Minnesota in 2011 exported more than $1.3 billion worth of food products and almost $1 billion more in industrial goods and services to China. Gov. Mark Dayton recently led a trade delegation to China; Minnesota presents a model for trade promotion strategy that is collaborative. For example, the Hormel Institute — in a research triad with the Mayo Clinic and the University of Minnesota — works with Chinese medical researchers in Henan Province. Sen. Amy Klobuchar observes that Minnesota-made medical devices “save lives” and “add jobs” in the state.
The larger question is: Should the Republicans battle with America’s leading banker, world’s largest low-cost exporter, and America’s growing export market?
Employing a strategy for all battles
Unlike Romney’s changing campaign tactics and policy positions, the Obama administration quietly and persistently imposed tariffs on Chinese tires and filed subsidy complaints against Beijing at the World Trade Organization (WTO). In the meantime, the Sino-American Strategic and Economic Dialogue is deepening as the White House unveiled the Asia pivot strategy along with the Trans-Pacific Partnership to expand American exports.
The purpose-driven Obama’s strategic policy architecture is Hamiltonian, with a new trade and military strategy in the Indo-Pacific region; Jeffersonian aspirations of religious freedom and human rights have been placed in the pragmatic framework of the president’s larger strategic vision.
Meanwhile, Romney’s battles with China include much smaller political maneuvers focused on unfair trade practices (like the intellectual property rights) and human-rights violations.
America, however, needs an overarching strategy. In his "The Art of War," Chinese sage Sun Tzu observed in the fifth century B.C., “Those who win battle after battle are not the most skillful. Those with greater skill employ strategy to make their opponents yield before reaching the stage of conflict.” This adage resonates with President Ronald Reagan’s ambitious former Soviet Union strategy that won the Cold War.
Reviving the founding vision with trade
It appears that the Obama White House has also taken the Chinese statesman’s rule to its heart to achieve America’s founding philosophic vision.
The founding strategy and philosophy that led to America’s superpower status is associated with Hamiltonian means to Jeffersonian ends. It took more than a century for the United States to realize Jeffersonian and democratic ideals of equality for slaves and women — two untouchable issues during the early years of the Republic. The evolving national unity, social mosaic, and equal rights resulted from the Civil War, the Women Suffrage Movement, and the Civil Rights Movement.
In Beijing, economic reformer Deng Xiaoping, like the Hamiltonians, advocated a robust manufacturing base for economic development in the 1980s. The founding father of modern China, Dr. Sun Yat-sen, inspired by Thomas Jefferson and Abraham Lincoln, elevated the consciousness of freedom and democracy for the post-Deng generation. Despite, however, the newly introduced political reform policy of “intra-party democracy” within the Communist Party of China (CPC), neither the old guard Communist Party leaders nor the so-called “princeling” class of the Mao Zedong era offspring would turn China into a practicing democracy anytime soon. In addition to workers and laborers, the Internet-based, educated young students as well as the CPC youth cadre with their own social networks have now become the unpredictable cohort of potential change agents of freedom in the future.
The United States hardly needs rhetoric. Bill Clinton opportunistically denounced China as the “butchers of Beijing” in the 1992 presidential campaign with little effect, much like Romney’s accusation of “unfair” trade practices. Having faith in the nation’s exceptionalism, America’s grand strategy for a Pacific century should be marinated with the best of China’s millennia-old civilization and its historical ambitions for legitimacy tempered by a long view of history.
For example, when Chinese admiral Zheng visited my native country of Sri Lanka in 1405, the Ming emissary demanded that the Sinhalese king pay tribute and obedience to the Chinese Emperor. Long before the Muslim eunuch’s seven expeditions to the Indian Ocean, Chinese interest in the Buddhist nation goes back to the Great Kublai Khan in 1284 when the founder of the Yuan Dynasty wanted to take the sacred tooth relics of Buddha. Historical failures didn’t deter the ensuing Chinese emissaries until Zheng returned to the island and brought the captured king, his queen, and the dignitaries to China in 1411. The prisoners were eventually released, but China’s final attempt to install a Ming Dynasty representative to the island’s throne failed in 1414.
This illustrates China’s patience and persistence. Like the United States, China has its own struggles in history but shares a common vision: Economic development must come first before realizing Jeffersonian ideals.
Pacific is America’s ocean
With America’s retreat from the Indian and Pacific Ocean regions in recent years, China has attempted to restore its international legitimacy and historical supremacy. As the crown jewel of the multibillion-dollar Chinese “string of pearls” naval strategy across the Indian Ocean and the South China Sea, Beijing is now constructing the over $100-million Lotus Tower in Colombo, the capital of Sri Lanka. The Buddhist-inspired (through the Lotus Sutra), soaring telecommunication tower symbolizes not only Beijing’s foreign policy slogans of “Peaceful Rise” and “Harmonious Society,” but also projects a symbol of ancient power radiating from the former Middle Kingdom.
Suddenly awakened to this reality, Obama’s Asian pivot strategy is intended to realize America’s founding vision of Jefferson’s “Empire of Liberty” in the Indo-Pacific region. Shortsighted China-bashing with political rhetoric, trade tactics, and military battles is counterproductive and it would most likely be costlier than the two wars in Iraq and Afghanistan combined. Nonetheless, China — holding over one-trillion dollars of U.S. government securities and American taxpayers annually paying Beijing over $25 billion of interest as debt service — wouldn’t profit from financing a war against them.
The vibrant and more educated young Chinese, who are already exposed to the taste of liberty and social networks, would be the 21st century’s missiles of freedom. They need more dosages of American inspirations that are extended through Dr. Sun Yat-sen to make China a democratic nation. These include academic exchanges, cultural connections, scientific contacts, and the use of other “soft-power” instruments — from both sides of the Pacific. Like America’s progress toward the eventual Jeffersonian ideals of equality, the next Chinese “fairness revolution” will organically rise from internal sources.
Shared vision of wealth and job creation
China doesn’t need to worry about America as a “concircling” (containing and encircling) enemy with its allies of Japan, South Korea, and India. The two intertwined Chimerican (China and American) economies must succeed for mutual prosperity and social stability — by creating more wealth and jobs. Just as the Hamiltonian Might and Jeffersonian Right led to American exceptionalism through creative tension and innovation, Chinese leadership has knowingly—and nervously—set in motion a great drama. Beijing has now begun to unfold the balancing act of reviving historic China between the Nation of Might (with its ancient maritime claims and imperial ambitions with legitimacy) and the Nation of Right with its Confucian virtues and Asian values.
With these complexities, the United States needs a better understanding of China’s history and struggles in formulating policies that would realize America’s vision.
To govern from the White House, Mitt Romney, if elected, needs to seek Chinese wisdom from "The Art of War" in devising an Obama-like grand strategy that combined the best elements of both American exceptionalism and Chinese civilization that are inherently pervasive in the psychic makeup of the two proud nations.
That’s a kind of win-win strategy that would further help Minnesota’s comparative advantage.
Patrick Mendis, a distinguished senior fellow and affiliate professor of public and international affairs at George Mason University’s School of Public Policy, is the author of “Trade for Peace” and “Commercial Providence: The Secret Destiny of the American Empire.” A former AFS high school exchange scholar to Northern Minnesota from Sri Lanka, Dr. Mendis is an alumnus of the University of Minnesota.
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