Hagel on China

Chuck Hagel has an op-ed at FT in which he makes a bold call for "wisdom:"

America must show wisdom in relations with China

...Both competition and co-operation will feature in US-China bilateral ties in the 21st century. That does not mean relations are destined to be hostile . . . although they could be if mishandled. The US has an opportunity to shape a co-operative relationship that would allow us to influence China’s overall strategic choices. It would be a colossal mistake if misguided assumptions, rhetoric and actions led to a dangerous and conflicted relationship. This is not a time to let paranoia chart the course for US policy toward China...

There are also difficulties in this ­relationship and economic friction is a focal point. The withdrawal of CNOOC’s bid for Unocal removes what was becoming a source of serious bilateral tension. But the rancour of the debate fuels an unproductive atmosphere and hinders efforts to address some more fundamental concerns.

In 2004, China’s exports to the US were nearly six times its imports of US goods and services. Trying to close that gap through artificial tariffs that violate World Trade Organisation rules and public threats will not resolve the differences. Most likely, such actions would further divide us, complicating the issues we should be working on and magnifying Chinese recalcitrance.

China has enacted some basic economic reforms in recent years, in large measure to comply with WTO standards. But China has many more reforms to make – not least, opening its markets to US companies. This will require continued economic reform, a more transparent and consistent regulatory and licensing system, enforcement of distribution rights for foreign companies and strong enforcement of intellectual property laws.

While China’s recent decision to abandon a fixed exchange rate to the dollar is an important step forward, the country needs eventually to achieve full convertibility of the renminbi. The US and international community must help ensure that the Chinese financial system can absorb a transition to market-based exchange rates.

Beyond economic policy, the US must keep working with the Chinese on other key issues such as rule of law, human rights and religious freedoms. China’s aggressive global diplomatic and economic strategy and its military build-up also bear close scrutiny. The US and its allies must encourage responsible Chinese actions, appropriate for a rising global power. This means, for example, not allowing a dangerous, historical Sino-Japanese confrontation to re-emerge...

The US must also take positive steps to maintain its competitive position in the world. It also must get its own house in order. Raising trade barriers or compromising its core, free trade values will undermine America’s overall long-term interests. We must rein in US deficit spending, promote greater domestic savings, address the growing entitlement challenge, rehabilitate infrastructure, invest in education and establish immigration reform. That is how America can maintain pre-eminence in the 21st century, regardless of the rise of China or any other nation.

Despite my facetiousness, this is a thoughtful and balanced piece. The headline might be a cheeky British editor's doing.

In a worldview with states as the central, or only, actor, the US psychologically needs a counterpoint. It's not enough to be the only hyperpower because that simply defines you as strong versus weak. You also need to have a rival that has moral failings so you can be defined as good versus bad (or free versus unfree, open versus closed, etc...). Thus it makes sense to define a rising power not as a "strategic partner" but as a "strategic competitor." The same can be said for hardliners in the Chinese government - they have this same view and the same needs.

The problem, as I see it, is that there are other significant actors in today's world. Besides the obvious non-state terrorist organizations, you have the capital markets, MNCs, regional  political and economic organizations, etc... You also have connections and interactions happening at the student, investor, employee, blogger, etc... level. It's only all too easy to ignore these other factors.

This isn't about nuance over clarity, as Kerry can attest, that goes nowhere. I simply mean that there are other trends that need to be weighed and marshalled in the interest of your larger goals. Bluster and brinkmanship, from either or both sides, based on a reductive view of the US-China relationship can only lead to pain and lost opportunities.