China in the Driver's Seat | The Nation


China in the Driver's Seat

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It's possible to make the case that China's success in bringing masses of peasants out of poverty—as many as 400 million and counting—is the single most important event in the world in the past quarter-century. To be sure, much of China's growth since the late '70s has come at the expense of the environment and of workers laboring under atrocious conditions. But many advocates of getting tough with China dismiss the vast improvement in living standards there or question whether it has happened at all. They argue that China has achieved its stunning record of growth, averaging close to 10 percent annually since 1979, by cannibalizing its workforce, with little or no material benefit for the average Chinese. "I don't view it as a success story," says Scott Paul, founding executive director of the Alliance for American Manufacturing (AAM), a longtime labor lobbyist and former aide to David Bonior, a former Congressman from Michigan. Paul argues that Chinese workers are often not paid proper wages and that they labor under weak or nonexistent environmental and workplace safety rules. By compelling China to revalue the renminbi, Paul and others argue, the United States can force China to absorb more of what it produces, which will raise Chinese wages, consumption and living standards. "This will allow China to enjoy the fruits of its growth," says EPI's Scott.

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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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Sort of like what President Bush and Condi Rice did in January 2009.

Humpty Dumpty hasn’t been put back together yet, thirteen years after the US invasion.

Over at the AFL-CIO, Thea Lee also isn't ready to acknowledge that China's growth has been a boon to its population. Lee, the federation's assistant director for public policy, is part Chinese herself, and she's intimately familiar with US policy toward China, which she faults as too accommodating and too driven by the interests of American corporations that operate there. "I don't call it a success for working people," she says. "It's a disgrace. The regulatory system is like the Wild West, and nobody cares. You have long-term environmental damage, you have child labor, you have forced labor, the destruction of workers' health." Like Fiedler, Lee rolls her eyes when she talks about the ACFTU, which has nearly 200 million members. "We don't recognize the ACFTU as a real union," she says. "I consider them to be the government. They're management."

Even as officials and activists within the labor movement and among its allies call for a confrontational stance against what they regard as predatory trade practices by China, at times they fall into what can only be called cold war–style rhetoric. AAM's Paul expressed grave concern about China's efforts to enhance its military power. "The trade surplus is being used by China to build up a military. They want to build a blue-water navy in the Pacific, to develop sophisticated nuclear weapons, satellite-killing weapons. What does that say about peace?" he asks. "Their stated goal is, they want to have a presence in the Pacific Rim and challenge US supremacy in the Pacific. That has enormous implications." And on Fiedler's list of steps to be taken to show China that the United States means business is a slowdown or suspension in US-China military ties and sharp limits on Chinese students studying in America. Fiedler tosses out words like "fascist" in regard to China, adding, "I would continue to sell arms to Taiwan."

Of course, there is another view. Some argue that it's impractical to try to bring jobs back from China, and that in any case the United States must make room for Beijing's rise as a great power. For these analysts, any talk of boosting America's military response to China is alarming.

The liberal bête noire of the labor movement and its allies is James Galbraith, the heterodox economist and professor at the University of Texas, who is sharply critical of those who think that jobs can be coaxed back home via any combination of pressure tactics against China. People like Galbraith are rudely dismissed as "panda huggers" by some, and even their motives are called into question. ("He's an apologist. His wife is Chinese. He's done some consulting for the regime. For God's sake, don't quote me on that," says one left-leaning critic.) Galbraith represents a diametrically opposite point of view from the AFL-CIO/EPI/AAM nexus, and his views are echoed by people like Columbia University's Joseph Stiglitz, MIT's Alice Amsden and others.

Galbraith dismisses the claim that China's economic growth has not brought massive material benefits to hundreds of millions over a short time. "It's clear that you have vast populations that are a generation removed from grinding poverty—and with an existence that they understand very well is vastly better." He argues that a great deal of what China manufactures is produced for its domestic market, that wages and working conditions are improving (especially for those in the export sector) and that forcing China to upvalue its currency would have no effect whatsoever on US job creation.

A central argument among US labor officials and their allies is that by suppressing the value of its currency, China is also suppressing domestic consumption far too severely. And, they argue, China's sky-high savings rate—more than 40 percent annually, one of the highest in the world, compared with US levels, which have mostly fluctuated in the zero to 5 percent range—is accomplished only by squeezing the living standards of its 1.3 billion people. So, they say, by compelling China to revalue the renminbi and direct its wealth inward, they're only doing what's best for China—and meanwhile helping to create Chinese demand for US goods.

Galbraith ridicules the idea that Americans know better than the Chinese what's good for them. "The notion that China could somehow increase its consumption in ways that would materially benefit American workers is not plausible," he says. "First, consumption in China has been rising rapidly for decades. Second, raising it more rapidly means what? Having more cars and fewer roads to drive on? It doesn't make any sense from a development standpoint. Why should they want to slow the pace at which they build infrastructure relative to the purchase of consumer goods? Why would they build fewer power plants and have more appliances in order to have brownouts?"

Some, like Galbraith, who question labor's unblinking anti-China stance don't shy away from accusing many of China's most vehement critics of xenophobia, racism and Yellow Peril–style alarmism, which echoes the fearmongering about Japan's supposed threat to US prosperity and jobs two decades ago. Progressive critics of the AFL-CIO's China policy often make two intertwined points: that China ought to get more credit for its accomplishment in bringing so many people to the threshold of a prosperous urban life, and that it's wrong for the United States to inflict pain on China in order to compensate for its own decades-long history of economic mismanagement. "We're talking about a country that has the continuing potential to pull a huge number of people out of poverty," says IPS's Feffer. "I don't think it can do that by competing 'fairly' according to the rules of international policy." Compared with workers in China, never mind steelworkers in Nigeria or textile workers in Brazil, American workers are vastly better off, he says. "If you look at American workers, they're doing pretty well."

"There is this longstanding Yellow Peril discourse in the United States, and a lot of this stuff fits into it comfortably," says Doug Henwood, editor and publisher of the Left Business Observer. "Yeah, they're competitive, but...that history of Yellow Peril–ism makes it seem sinister and virulent. It's a lot easier to blame China than it is to look at what's wrong with the United States. There's a kind of nationalism that is a little too close to xenophobia that fuels this sort of thing, and populists on the left and right can agree on not liking China."

Such a tendency is all the more regrettable in that it fuels saber-rattling arguments from the right. For years the Pentagon has been issuing increasingly dire warnings about China's emergence as a strategic challenge to the United States, and since the end of the cold war neoconservatives and the promilitary right have raised the specter of a Chinese boogeyman to compensate for what Charles Freeman, a Mandarin-speaking former senior US diplomat, likes to call "enemy deprivation syndrome."

Selig Harrison, a former journalist and director of the Asia Program at the Center for International Policy, suggests instead that progressives ought to support an accommodation with China's legitimate national interest in its region. "The idea that we should accept China's interests in East Asia, I would think, should be readily understood by liberals," he says. "The fact that China is going to have a navy with a long reach, that it's going to be a superpower, just as India is, well, America has to adjust."

But America doesn't adjust well. It's hard to imagine a US politician making the case that Washington should pull back from its overextended posture in Asia and the Pacific or cede an expanded presence to China. Only this summer, the Obama administration started laying bricks in a Great Wall of Containment around China by mending ties with a brutal Indonesian special forces unit and taking sides against China in a potentially dangerous dispute over Beijing's claim to a string of islands in the South China Sea. "It would be disastrous for progressives to provide fodder for the military-industrial complex by demonizing China," says Michael Klare, author of Rising Powers, Shrinking Planet. "There are very powerful interests in Washington who want to set us on a path of confrontation."

In particular, the issue of Taiwan is a flash point, and if relations between Beijing and Washington spiral downward, a conflagration between the two nuclear powers could erupt over the Chinese island. According to Harrison, an end to US military support to Taiwan ought to be the starting point for improved US-China ties, including on economic issues. "We'll never get China to behave economically on key issues like the currency peg and their position in the future on holding our securities if we continue to fuck them on Taiwan," he says.

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