US & CHINA: back
to courting
by B.Raman
"There is a common interest in the
US as well as in China in maintaining and strengthening the present
economic linkages without letting them be damaged seriously by what a
Chinese analyst has called the tumours in the otherwise healthy organism
of Sino-US relations which keep appearing from time to time such as the
Taiwan, the proliferation, the Tibet and the National Missile Defence (NMD)
issues.
"The political leaderships and the
business class in the two countries would see to it that these tumours do
not become malignant. One saw that during the Clinton Administration
and one would see that during the Bush Administration too. After the
present phase of rhetoric and confrontation, moderation would again set in
at Washington as well as in Beijing. It would be unwise and
short-sighted for India to think that the present confrontation would last
for long and that it could strategically take advantage of it."
Extract from the writer's paper dated
14-5-01 titled "Sino-US Relations: The Economic Aspect"
available at www.saag.org/papers3/paper241.html
--------------------------------------------------------------
Politically hard and unyielding, but
economically flexible and alluring. Those are the defining
characteristics of the present Chinese leadership.
Even while welcoming US businessmen with
open arms and going out of its way to facilitate their business activities
in China, Beijing never hesitated to stand firm against the US when its
vital national interests were involved --whether those were in relation to
Taiwan and Tibet, US espionage flights off the Chinese coast, right of
free navigation across the South China Sea, human rights or labour
conditions in China, missile defence, or its clandestine nuclear and
missile relationship with Pakistan.
It never allowed its interest in US
investment flows to dilute its adherence to its political principles and
it never allowed the frictions in its relations with Washington due to its
adherence to its principles to prejudice it in its attitude towards US
businessmen. It learnt that what was really important was not the
certificate of good governance from American political leaders, but from
their businessmen.
The Chinese leadership also learnt many
years ago that:
* The world respects a nation which is
politically unyielding in matters of national interest and refuses to
let its policies and decisions be influenced either by US pressure or by
an over-anxiety to please the Americans.
* Political frictions between two
capitals do not necessarily deter US businessmen so long as they are
assured of the safety of their lives and investments and have a free
hand in making profits.
* In the globalising world, business
interests are an important component of strategic interests and no US
administration, Democratic or Republican, can afford to be inattentive
to the views and interests of its businessmen. Ultimately, the
compulsions of business interests will prevail over those of ideology
and politics.
Remember the year 1999 after US planes
bombed the Chinese Embassy in Belgrade killing some Chinese officials and
severely damaging the buildings? There were anti-US riots in Beijing and
anti-American rhetoric was at its height. It was a bad year in
US-China political/diplomatic relations, but it did not affect US and
other foreign investment flows into and trade with China. It
recorded yet another year of US $ 40 billion plus in investment
flows. Beijing took great care to ensure that the tensions in its
political relations with Washington did not have a negative impact on its
relations with US businessmen.
Dark clouds had gathered over US-China
relations ever since Mr.George Bush Jr. was elected as the US President in
November last. A paranoia over what was projected as likely threats
to US interests in the Asia-Pacific region due to the fast emerging
Chinese economic and military power was the dominant feature of the
campaign speeches, of the debates in Republican circles before the
inauguration and of the actions of the new Administration in its first few
months in office.
No other members of the new
Administration reflected this paranoia more disturbingly than Mr.Donald
Rumsfeld, the new Defence Secretary, and to a lesser extent,
Ms.Condoleezza Rice, the National Security Adviser. China was
projected as a strategic competitor and not partnner as it had been
glorified to be by Mr.Bill Clinton, the previous President. Actions
such as the attention to the Dalai Lama when he visited Washington DC and
clearance to arms sales to Taiwan in the face of Beijing's opposition were
all influenced by the conservative, distrust-China lobby in the Republican
Party.
Gen (retd). Colin Powell, the new
Secretary of State,who is more a professional than an ideologue, found
himself without adequate voice in policy-making with regard to China in
the first few months. It is the ideologues who prevailed.
But things started changing from the day
Mr.Rumsfeld allegedly issued an order suspending periodic interactions
between the Armed Forces of the US and China, which had been initiated by
the Clinton Administration as a confidence-building measure. It was
reported that the former President, Mr.George Bush Sr, the father of the
present President, was shocked by this order and pointed out to Gen.Powell
and Ms.Rice the inadvisability of unnecessarily needling China.
Mr.Rumsfeld wriggled out of an embarrassing situation by claiming that his
instruction for a case-by-case clearance of future interactions had been
misinterpreted by a Pentagon official as suspension of the interactions.
It was from that time onwards that one
could see Gen.Powell playing a more active role in China policy-making and
a beginning of a possible diminution in the role of Mr.Rumsfeld and
Ms.Rice. Other influential personalities too joined in strongly
deploring the anti-China paranoia being created by the conservative
ideologues which, they pointed out, could be counter-productive.
Dr.Henry Kissinger, former National
Security Adviser and Secretary of State, was one of the strongest critics
of this artificially-created paranoia. How can a nation (China) with
an annual defence budget of US $ 12 billion pose a threat to a nation (the
US) with an annual defence budget of US $ 350 billion, he asked. He
pointed out that just because China was modernising its Armed Forces in
keeping with its present-day requirements, it could not be perceived as a
threat to US interests.
China conducted itself during these
difficult months in an exemplary manner. It kept up its strong
criticism of the US policies towards Taiwan and Tibet and on espionage
flights. It joined hands with Moscow in strongly opposing the missile
defence initiative of Mr.Bush. It kept up its clandestine supply of
missile and missile components to Pakistan. According to US
intelligence estimates, as quoted by the "Washington Times", 12
consignments have gone by ship and road to Pakistan since Mr.Bush Jr
assumed office. It did not hesitate to prosecute American
nationals/residents of Chinese origin arrested by it on charges of spying,
but let them leave the country after a proforma conviction.
At the same time, it kept reiterating
its continued interest in a co-operative relationship with the US and
underlining the inevitability of the restoration of the warm vibrations of
the past. It projected to its own people, through Chinese analysts,
the statements and attitudes of some officials of the new US
Administration as temporary aberrations in policy-making which mark the
beginning of every new administration in the US about which China did not
have to unduly worry.
At the same time, it stepped up its
imports from the US in order to reduce the trade deficit, which is
presently unfavourable to the US. It accelerated all negotiations on
pending business contracts with US companies. According to the
latest Chinese Customs figures, Chinese imports from the US increased by
17.9 per cent to US $ 12.5 billion as against only a six per cent increase
in exports to the US (US $ 25.02 billion) during the first half of this
year.
Beijing reportedly permitted five of its
airline companies to buy 36 Boeing 737 aircraft with a combined price tag
of US$2 billion and the Air China to purchase four Boeing 737-800s.
One could already see the benign impact
of the pressures on the Administration from professional strategic experts
and business interests in the changed language before and during the visit
of Gen.Powell to Beijing in the last week of July,2001. Before his
departure from Wahington, he told the US media: "We're not working on
converting China to an enemy. We do not need another Soviet Union
for an enemy in order to give a sense of purpose. We want more
friends, people we can work with. Are they (the Chinese) also trying
to modernize their military? Yes. Does it look like it's being
modernized to go on the march? Not to me so far."
After his one-day talks in Beijing with
President Jiang Zemin and other Chinese leaders, he said: "We are not
enemies and are not looking for enemies - we are looking for ways to
cooperate…….We view China as a very important nation that is going
through a period of transformation. We want to help with that
transformation. ....We view China as a friend, not as an adversary."
He never once used the expression strategic competitor.
Gen.Powell emphasized the Bush
Administration's desire to build "constructive, forward-looking
relations" with China. "China and the United States have a
strong common interest in seeing a stable Asia and a world where economies
can thrive and security needs can be met," he added.
He admitted that major
differences remained on issues such as Taiwan, China's proliferation of
weapons of mass destruction such as its continued supply relationship with
Pakistan and human rights , but added that Bejing had agreed to the
subjects of proliferation and human rights being further discussed by
experts from the two countries before President Bush's visit to China in
October.
Thus, one could see that Sino-US
relations are on the mend as a result of re-thinking in Washington on the
lack of wisdom in the way the new Administration projected China in less
than positive colours. Mr.Clinton too came to office in January,
1992, with a negative image of China which later on turned into a very
positive one, but this transformation took some time to come about.
In the case of Mr.Bush, it has come about within seven months of his
assuming office.
India has valuable lessons to learn from
this. Our policy towards the US is perceived by large sections of
the public to be politically malleable, but economically devoid of
content. The rapidity with which we welcomed Mr.Bush's missile
defence initiative, even when the USA's closest allies such as the UK
preferred to wait and study before reacting, the way we seem to have
allowed the positive assessment of the US experts on Gen.Pervez Musharraf
of Pakistan to prevail over the negative assessment of our own experts
thereby creating the Agra embarrassment etc show a tendency to let our
judgements and actions in such matters be influenced by US perceptions.
At the same time, the economic dimension
of our relations with the US has not received the required
attention. Even earlier, the analysts of conservative think tanks
close to the Republican Party viewed the economic management of our
Government as lackadaisical. This negative perception seems to have been
strengthened by the Enron case. There is consequently a danger of
the interests of US businessmen in India gradually evaporating.
We seem to be under an illusion that
foreign businessmen will flock to India just because we have a functioning
democracy, a modern legal system and a population of one bilion. More than
this, what is important is their perception that India has a government,
which manages the economy competently and makes the business atmosphere
investor-friendly, for domestic as well as foreign investors. One
has to work hard for such a perception.
(The writer is Additional Secretary (retd),
Cabinet Secretariat, Govt. of India, and, presently, Director, Institute
For Topical Studies, Chennai. E-Mail: corde@vsnl.com
)
