The Big Story Everyone Missed
People who were whipped into a frenzy about the ‘Chinese peril’ must wonder what happened. But Washington’s shift in attitude is a return to sanity
NEWSWEEK
Jan. 6 issue — This year has been the first year of the post-9-11 world. So as 2002 winds up, it’s a good time to look back and ask, “Who are the winners and losers of the new international order?”
THE LOSERS ARE obvious—Saddam Hussein, Saudi Arabia, Hosni Mubarak, Yasir Arafat and, of course, Al Qaeda, which may not be dead but is on the run. The winners are Israel, India and Russia. Their struggles with their opponents (the Palestinians, the Kashmiris and the Chechens, respectively) have been cast in a more favorable light. Russia, in particular, has shrewdly used the war on terror to further its integration into the West.
But in many ways the country that has benefited most from 9-11 is China. The attacks on New York and Washington had an enormous, positive effect for it. They moved the country off Washington’s enemies list.
Since the end of the cold war, a segment of the American right has been searching for a foe. China, a rapidly growing power ruled by a communist party, fit the bill nicely. For much of the 1990s, neoconservative commentators and Christian-right politicians railed against China, arguing against granting it most-favored-nation status, against allowing it into the World Trade Organization, against Clinton’s presidential visit. They warned that the Hong Kong takeover was likely to mark the end of that free-market marvel, that China was likely to invade Taiwan and that passivity toward this threat was either a product of weakness or treason. Remember Wen Ho Lee?
Then with 9-11 along came a real enemy, and China was instantly forgotten. There are surely people in America who, having been whipped into a frenzy about the Chinese peril, are wondering what happened. But that was Wen and this is now. Gone is the talk of China as a “strategic competitor.” The country is now an ally in the war against terror. Washington supported its entry into the WTO, its bid for the 2008 Olympics and even accepted Beijing’s argument that its Xinjiang region harbors Islamic terrorists.
China has taken advantage of the new climate in Washington to stay focused on its paramount goal—economic growth. With the exception of Taiwan, China has usually supported American foreign policy because it wants, more than anything else, time to develop. In the last year it has had a political transition (of sorts; Jiang Zemin remains quite powerful) whose chief effect has been to solidify the ruling consensus in favor of market reforms.
The results over the last two decades have been staggering. Even if you assume its growth numbers are exaggerated, it has moved hundreds of millions of people from poverty into middle-income status. Jeffrey Sachs, the economist who has advised dozens of developing countries, puts it simply: “China is the most successful development story in world history.”
Its economic policies have borne remarkable fruit over the last few years. China has become the most important manufacturing nation in the world. The economic map of Asia is being redrawn, with China at the center. This is the big story of the year that got drowned out by the war on terror.
Consider the following: in 1985, exports from foreign companies in China were composed of only 1 percent of the country’s total exports, amounting to $300 million. In 2001 they composed 50 percent of its exports, totaling $133 billion. China is now the largest provider of Japanese imports. And these goods are not all cheap plastic toys. Nobuyuki Idei has privately revealed that in two years his company, Sony, Japan’s flagship corporation, will be manufacturing more goods in China than in its home country. Last August Singapore’s prime minister, Goh Chok Tong, called China’s continuing growth “scary,” and urged his countrymen “to secure a niche for ourselves as China swamps the world with her higher-quality, but cheaper, products.”
But Singapore is not doomed. In the long run, having a rich China could prove to be a boon to its neighbors. After all, China exports, but it also imports. It is, for example, the largest importer of goods from Taiwan, absorbing a quarter of all Taiwan’s exports. That’s double what it bought only 10 years ago. And Japan and China could prove to be highly complementary economies. But a happy scenario rests on politics—on how China is integrated into the world. And that depends on Beijing, but more crucially on Washington.
Washington’s shift in attitude toward China marks a return of sanity. The United States cannot stop China’s rise, nor should it. To set itself up against China, before that country has shown itself to be a foe, is to create a self-fulfilling prophecy, ensuring a contest between the world’s leading power and its fastest-rising one. This is the stuff of world wars. And we already have one going. |
