China in the Driver's Seat | The Nation


China in the Driver's Seat

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Sitting at a sidewalk coffee shop a block from the White House, Andy Stern, former president of the Service Employees International Union, is reflecting on a series of visits he's made since 2002 to China, where he has discussed organizing and collective bargaining with leaders of the All-China Federation of Trade Unions (ACFTU). China's economic transformation is a profound challenge to the United States, and to American workers in particular, Stern says. "We have to recognize that China is the first real economic competitor that has ever threatened America's standing as the global economic superpower."

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For his article China in the Driver's Seat, Robert Dreyfuss talked to dozens of progressive academics, journalists and policy-makers about the rise of the new economic superpower. Here, find links to excerpts from interviews with Carolyn Bartholomew, Andy Stern, James Galbraith, and more.

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Robert Dreyfuss
Bob Dreyfuss
Robert Dreyfuss, a Nation contributing editor, is an investigative journalist specializing in politics and national...

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Few would argue that the rise of China has world-altering significance. But across the American left there are sharp, sometimes acrimonious differences about what constitutes appropriate and principled responses to China's emergence as a great power, and whether the country's ascendance is promising or ominous. Even Stern's visits to China over the past decade have drawn withering fire from other labor leaders, along with human rights and globalization activists, who vilify the ACFTU as an instrument of antiworker repression by China's ruling Communist Party. "Andy Stern seems to think he can find progressive elements within the ACFTU. And the SEIU is OK with that?" asks Sophie Richardson, advocacy director of Human Rights Watch's Asia division. Jeffrey Fiedler, a longtime activist on China, an official at the International Union of Operating Engineers and a member of the Congressionally mandated US-China Economic and Security Review Commission (ESRC), is scathing. "Andy Stern threw away all principle and started dealing with the ACFTU. The head of the ACFTU is on the fucking Politburo!" he exclaims. "He's a thug."

Many in the labor movement, of course, are riled by their belief that export factories in China, often managed by US and other multinational corporations, are stealing American manufacturing jobs. They view China as the biggest player in a worldwide rush by US and other corporations to take advantage of cheap labor and lax regulatory regimes in much of the developing world, whose producers stock the shelves of American shopping malls with imported goods. "The global imbalances generally—with Germany, Japan, China, Korea and others focused on an export model and relentlessly wedded to it without concern for moving to a more balanced marketplace—have a direct destabilizing effect on the global economy, and on this economy in particular, and can't be sustained," says Robert Borosage, co-director of the Campaign for America's Future. "And so the United States has to move into a series of much more fraught confrontations and challenges, not just with the Chinese."

The implications of China's rapid ascent go far beyond those concerns. It is fast becoming an economic giant, moving from low-end assembly lines and garment sweatshops to high-end products and innovative approaches to green technology, including wind turbines, solar panels and electric cars. Despite the uncontrolled, almost Wild West nature of capitalism in China, for many developing countries its muscular combination of top-down political control and state-guided industrial growth represents a palpable challenge to the dominant post–World War II paradigm of American-style development, and it is an attractive one in many quarters. "I am concerned that there are other places in the world where China's form of authoritarian capitalism is taking hold," says Carolyn Bartholomew, vice chair of the ESRC and a former aide to Representative Nancy Pelosi. "Look at how China is engaging in Africa."

"It's almost as if the continental plates of global politics are shifting beneath our feet," says Orville Schell, director of the Asia Society's Center on U.S.-China Relations. "We suddenly have this other model of authoritarian capitalism that is proving to be remarkably successful, and it is even posing a challenge, not just economically but politically, to our belief that our system of democratic governance is the one that's best able to deliver a good life."

Along with China's growing economic power comes an inevitable corollary: China's eventual emergence as a political and military power wielding its influence from East Asia to the Pacific, the Indian Ocean, the Middle East, Africa and beyond.

Among progressives, there's certainly no consensus over how to respond to the rise of China. "This drives a wedge right through the progressive community," says John Feffer, co-director of Foreign Policy in Focus at the left-leaning Institute for Policy Studies (IPS). Well aware that US policy toward China is driven by the multinational corporations and banks that invest there and by the military-industrial complex, which sees China as a rival and potential adversary, progressives know they have only limited power to affect national policy. Still, they debate choices: confront China or accommodate its rise? Slam China with tariffs and sanctions or invite its sprawling, state-owned enterprises to buy up US companies and build factories in the United States? Engage the ACFTU and other Chinese institutions or avoid them? And what about human rights, including worker rights, religious freedom and minority rights for Tibetans and Muslim Uighurs in western China? Will labor shortages, which have helped spark a wave of strikes and protests, lead China to give greater freedom to workers to organize, to secure higher wages and a better standard of living?

To answer at least some of those questions, I interviewed several dozen progressive policy analysts, economists, environmentalists, labor and human rights activists and officials, and academic specialists on China. Nearly all of them agree on one thing—namely, that to compete with China the United States must adopt a clear-cut set of industrial policies, investing in infrastructure, job creation, education and training, high-tech manufacturing, and research and development, especially in green technology.

"The first priority is to get our own house in order, so we're not filled with so much anxiety that is easily transferred onto the rise of another country," says Schell. But even on this point there is disagreement, because many activists on the left argue that it's difficult to promote a US industrial policy—taxing the rich, subsidizing favored industries, spending a lot more on infrastructure and training—without simultaneously taking on the dominant ideology of neoliberal globalization and free trade, and that includes the China problem. "It's almost impossible to have a domestic industrial policy without addressing the trading regime," says Robert Kuttner, co-founder of The American Prospect.

For many in the US labor movement, there's little doubt that China is a grave menace, at the very least, to American jobs and prosperity. At the AFL-CIO, the Economic Policy Institute (EPI) and the Alliance for American Manufacturing (a project supported by the United Steelworkers), the book on China is this: it's a bullying, mercantilist power, competing unfairly with other countries by artificially keeping the value of its currency low and by suppressing labor rights and trampling on environmental standards, cannibalizing a generation or two of poor migrant workers to churn out cheap products for export. In this narrative, China exploits the willingness of multinationals to set up unregulated factories along its industrial southern coast, meanwhile blackmailing those firms to share trade secrets and technology with China as the price of admittance. It's a sweeping indictment, and the remedy they suggest involves some combination of daunting and punitive tariffs—as much as 25 percent across the board on imports from China, some say—along with sanctions and other measures to force China to revalue the renminbi, its currency, by 40 percent or more.

Advocates in this camp discount fears of a confrontation or a trade war with China, and in fact they insist that the longer the United States waits before taking on China, the harder it will be. "I would say to the Chinese, 'We are not going to allow the free access of Chinese goods, as long as you are pirating technology, requiring American companies to produce in China only for export and not for the Chinese market, extracting technology transfer agreements that are plainly coercive, and manipulating your currency.' Then the fat would be in the fire, and the Chinese would have to decide what they're going to do about it," says Kuttner. "It might lead to some conflict," he says. "If we took a harder line on Chinese mercantilism, it might get kind of ugly in the short term."

Robert Scott, an economist at EPI, published a study in March claiming that between 2001 and 2008 nearly 2.5 million American jobs skedaddled to China, including more than 600,000 in computer and electronics manufacturing alone. Like many in the AFL-CIO's orbit, Scott takes a frankly nationalist stance in defense of measures to rebalance the US-China trade deficit. "The US government has an obligation to US workers to develop policies that are in our national interests," he says during an interview in his office. When I point out that over the past three decades China has lifted hundreds of millions of people out of desperate poverty, and that his attitude might sound chauvinistic to some, he nods. "It does. I view my job as being concerned with the living standards of American workers." And he insists that only a threat to close the US market to Chinese imports will be enough to get Beijing's attention.

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