US didn’t ‘engage’ China to make it rich and free; it profited off it
- The logic of American capitalism dictated the US partner with China; the logic of empire now compels it to fight this rising ‘monster’ because it didn’t turn out to be the plaything America had expected
In the United States, there has developed what may be called a revisionist history of China’s rise. Under the heading of engagement and its failure, the narrative is that after the Cold War, America wanted to help communist China liberalise its economy and democratise its society and state. So, it decided to engage Beijing to entice it into following the rules-based international system and to integrate its economy into that of the world. After all, the 1990s and 2000s marked a great wave of democratic convergence around the world.
This American effort, however, has largely failed. China has failed to liberalise and democratise. In fact, it has turned back on economic reforms. Engagement was a misguided attempt, but it was done out of the goodness of its own heart; still America has created a monster. Now, it has to take responsibility – it has no choice but to fight and restrain this monster and stop it from threatening the world.
There is a nifty summary of this view in “The Inevitable Rivalry: America, China, and the Tragedy of Great-Power Politics” by John Mearsheimer, in the current issue of Foreign Affairs.
“It was a momentous choice,” he wrote. “Three decades ago, the Cold War ended, and the United States had won …
“There was a serious possibility that China might become dramatically stronger in the decades to come. Since a mightier China would surely challenge the US position in Asia and possibly beyond, the logical choice for the United States was clear: slow China’s rise.”
The ugly reality of the American empire
But America did the opposite, Mearsheimer wrote: “Instead, it encouraged it. Beguiled by misguided theories about liberalism’s inevitable triumph and the obsolescence of great-power conflict, both Democratic and Republican administrations pursued a policy of engagement, which sought to help China grow richer. Washington promoted investment in China and welcomed the country into the global trading system, thinking it would become a peace-loving democracy and a responsible stakeholder in a US-led international order.
“This fantasy never materialised … Today, China and the United States are locked in what can only be called a new cold war – an intense security competition that touches on every dimension of their relationship. This rivalry will test US policymakers more than the original Cold War did, as China is likely to be a more powerful competitor than the Soviet Union was in its prime. And this cold war is more likely to turn hot.”
If Mearsheimer is right, perhaps China’s leaders should thank Francis Fukuyama and his famous “end of history” thesis that encouraged Americans to celebrate their triumphalism at the end of the Cold War and caused them to let their guard down.
For Asians, and especially for someone from Hong Kong like yours truly, who have lived through this whole period, we can only roll our eyes at this historical revisionism about “engagement”. It is self-serving in the extreme.
A war film that says much about China and the US
In a sense, what happened to the Hong Kong economy was repeated in the US, only on a much greater scale: in the 1980s and ’90s, our city moved its entire manufacturing base to mainland China, and refocused on services, finance and of course, real estate.
The US did something similar, though driven by different if comparable socio-economic forces. By the 1980s, the US was having second thoughts about its trade with, and foreign investment in Japan, which was emerging to become the world’s second-largest economy and naturally becoming less beholden to Washington. To counter Japan’s manufacturing might, US corporations were encouraged to offshore practically their entire manufacturing base to developing countries with low labour costs, chief of which was, of course, China.
This turned out to be extremely lucrative for American multinationals. Take Apple, arguably the most profitable company in the world. On an iPhone 7, it’s been calculated it left just 3.6 per cent of its cost as profit margin to its numerous mainland Chinese manufacturing partners to fight over. It presumably left a few more crumbs on the table for Foxconn, but not much more.
The problem is that this communist party, it turns out, isn’t a tinpot dictatorship but a rather competent one
Much of the profits made from the sweat and blood of Chinese workers were recycled through the US treasury market. China was loaning to Americans so they could keep buying Chinese goods.
Meanwhile, American capitalism was being financialised. Why make things when you can make much more money much faster by just moving money around? In this, China helped too. If you want to leverage, borrowing costs have to be kept low. By lending massively to the US, China helped keep interest rates and inflation low. This role was played by Japan in the last century; China took over at the beginning of this century. How else could the US have carried out its expensive “war on terror” if borrowing costs had been high?
What Karl Marx has called the logic of capitalism compelled the US to partner with China, just as it did previously with Japan. The Nichibei economy was replaced by Chimerica. Yesterday, it was Toyota, Honda, Sega, Nintendo, Sony, Canon, Toshiba and JVC. Today, it’s Huawei Technologies, ZTE, ByteDance with its TikTok app, Alibaba, Tencent, Xiaomi, Didi Chuxing, DJI and Baidu.
There is, also, a historical dimension to this whole story. At least since the first Opium War and actually well before that, all major Western powers had wanted to take over the Chinese market with its vast profit potentials. When Chinese communists opened up, of course Americans and others jumped right in. The problem is that this communist party, it turns out, isn’t a tinpot dictatorship but a rather competent one. It has learned from its mistakes and those of others. It prefers its own “Beijing consensus” rather than “the Washington consensus”.
This is looking after your own interests, but in Washington, it’s called not following or challenging a rules-based international system; never mind the US is the one that sets up most of the rules and breaches them when it finds suitable.
The logic of global capitalism dictated the US partner with China; the logic of empire now compels it to fight this “monster” because it didn’t turn out to be the plaything America had wanted.
