Relations between the People's Republic of China and the US - Assignment Example

Relations between the People's Republic of China and the United s have been quite volatile, and considered a delicate issue, especially after segregation of the mighty Soviet Union that brought to focus China's own ambition with East Asia. United States have remained quite suspicious of its Communist Party and have expressed many concerns about its lack of solid Human Rights sensibilities. The People's Republic of China (PRC) and the United States have become major trade partners with common interests like the fight against terrorism and prevention of the development or experiment with nuclear arms. Stained by direct confrontations on the issues and war over Korea, and China's nuclear production in 1964, the relation relaxed when in 1969, the US relaxed trade restrictions and in 1972, President Nixon visited China. At the conclusion of his trip, the Shanghai Communiqu declared a statement of their shared foreign policy views. But following the suppression of Communist demonstrators in June 1989, U.S. suspended high-level official exchanges with the PRC and weapons exports and also imposed a number of economic sanctions on account of its absence of Human Rights policies. Following the September 11 2001 attacks, the U.S. and PRC commenced a counterterrorism propaganda that positively reflected in their joint ventures and wholly US-owned enterprises in mainland China. Significance of the 1972 Shanghai Communique: China-U.S. Trade Relations since then - The 1969-79 years featured normalization of relations between the People's Republic of China and the United States. The economic and political maturity of China, coupled with new concerns over the nature of Chinese-American interactions (concerns that were prompted by several circumstances, including the Vietnam War and Nixon's surprise visit to the PRC), caused the establishment of full diplomatic relations between the United States and the People's Republic of China. One might argue persuasively that the cold war is no longer the central issue determining U.S.-East Asian relations but economic interests, with particular reference to Chinese-American trade, seem to help overcome petty differences. In 1970 and 1971, Nixon laid the groundwork for rapprochement with the People's Republic of China; and in February 1972, his efforts culminated with his trip to Peking. The PRC welcomed the visit for a variety of reasons, the most important of which was probably the perceived imminence of a Soviet attack on China. A second factor was Peking's concern that Japan's tremendous economic growth might serve as the basis for a revitalization of Japanese militarism until United States by virtue of its security treaty with Japan help prevent any such Japanese rearmament. The size of the Chinese economy, even measured in current U.S. dollar (USD) terms, is likely to have surpassed that of Britain and leapt to be the fourth largest economy in the world by the end of 2005. Since its re-entry into the world economy in the late 1970s, China has been a beneficiary of the international economic system. In the 1990s, more and more states pursue the strategy of entering into free trade agreements that offer preferential terms of trade among its members while discriminating against nonmembers. The establishment of the WTO in 1995, whose explicit intent was to strengthen application of the principle of non-discrimination of its member economies, saw a growth in the number of FTAs. By mid-2000, one hundred and fourteen FTAs were in effect. Steve Van Andel, chairman of the US Chamber of Commerce and board chairman of the US-based Amway Company, during an exclusive interview with People's Daily correspondent Liu Aicheng stationed in the United States the Chinese markets potential and economic development to be very promising. He said: US Amway Company, founded in 1959, is a world-famous producer of household products for daily use. The company has been investing in China for seven years, with the total investment topping US$1 million, and it has planned to expand its investment in China. He added: We should admit that in the course of exploring the Chinese market, we did have encountered many difficulties. Nevertheless, we are always confident and optimistic because we have seen the bright prospect for China's development as well as for investing in China.1 China's exports could not have grown so much without a comparable growth in imports. Exports of manufactured goods became dominant during the 1980s, growing from 1985 through 1993 at an average rate of 24 percent per year; by 1993 manufactured goods made up 80 percent of China's exports. These were labor-intensive goods: textiles, clothing, shoes, toys, sporting goods, TVs, radios, washing machines, and refrigerators. These were low-technology products made by low-cost labor that could for the most part no longer be made competitively in advanced Countries. In 1999, exports still were labor intensive, but they were becoming more advanced technically. A key part of the process of expanding exports was the expansion of the number of foreign trade corporations and their decentralization to the provinces. They were allowed to retain increasing shares of the foreign exchange they earned, a powerful incentive to increase exports.2 From having fewer than 20 monopoly trading corporations, China now has hundreds of thousands of trading firms. China is now second after the United States as a destination for foreign direct investments, receiving 30 percent of all FDI going to developing countries-as conventionally reported. Nonetheless, since 1992, FDI has played a large role in China's rapid growth. In 1983, it was only 0.2 percent of GDP, and it did not go much over one percent until 1992. By 1997, FDI accounted for 7 percent of its gross industrial output, 11 percent of gross domestic investment in fixed assets, and, in 1998, 13 percent of gross domestic capital formation.3 Recent US investment is targeting China, a large and growing market for computers and their components, telecommunication equipment, and aircraft and is a potentially large one for pharmaceuticals and many other research-intensive products. Its competencies to manufacture such products are growing. For those who recognize that openness promotes development and that a country's development, if it goes far enough, is a sufficient condition for its political evolution to political pluralism, China's increased involvement with the world economy should be welcomed not only for the familiar commercial reasons but for political ones as well.4 As U.S. decision makers turned their attention to the urgent dangers of terrorism and proliferation, they seemed less inclined to view China as an actual or potential strategic competitor and more hopeful that, in the post-September 11 world, all the great powers would be "united by common dangers . . . [and] increasingly . . . by common values."5 From the start of reform in 1978 to the end of the twentieth century, the value of the trade moving between the two countries grew by more than two orders of magnitude, from $1 billion to almost $120 billion annually.6 By 2004 that figure had doubled to a reported total of $245 billion.7 Capital flows have also risen, with U.S. investors pouring significant resources each year into China. As China enters the World Trade Organization (WTO) and opens its markets even wider to foreign goods and capital, the density of commercial linkages between the United States and the PRC will increase. Economic interdependence has already helped to create a strong mutual interest in peace between the two Pacific powers. Barring some major disruption, economic forces will probably continue to draw them together, constraining and damping any tendencies toward conflict.8 The growth of international institutions in Asia and the expansion of both U.S. and Chinese participation in them are drawing the United States and the PRC into a thickening web of ties that liberal optimists believe will promote contact, communication and, over time, greater mutual understanding and even trust, or at the very least, a reduced likelihood of gross misperception. Aside from whatever direct effects it may have on bilateral relations with the United States, China's increasing participation in international institutions should also give it a growing, albeit more diffuse, stake in the stability and continuity of the existing global order. The desire of China's leaders to continue to enjoy the benefits of membership in that order should make them less likely to take steps that would threaten the status quo. This, in turn, should reduce the probability that the PRC will act in ways that could bring it into conflict with the United States, which is, after all, the principal architect, defender, and beneficiary of the contemporary international system.9 The patterns and dimensions of these relationships, also including the nature of the growing interdependence between United States and China in science and engineering education, inter-university relationships, what may be called China's "extended scientific community," a term used to refer to Chinese scientists and engineers from the PRC now working in United States. The patterns of interactions between this extended community and the domestic scientific community in China with common understanding that members of the "extended community" play an important role in bridging scientific and technological activities in China and in United States, ultimately leading to a consolidated economic development. Some forms of cooperative activity are characterized by centralization, while others are "distributed." International cooperation can result from initiatives from scientists (as individuals or as teams), it can be driven by a variety of governmental policy concerns, and, increasingly perhaps, it is motivated by corporate interests in commercially viable innovations and in building a globally relevant knowledge base for corporate operations. These trends in the US-China case provide a far more textured analysis of the relationship than has been available to date. The finer grained, more discriminating analysis help clarify the policy choices facing the US and China as they deal with the increasingly complex military, economic, and environmental relationships. Among these policy choices, are those relating to multilateral as opposed to bilateral forms of cooperation, modes for facilitating communication and travel. The changing context for export controls, harmonizing regulatory approaches with regard to the environmental and ethical implications of new technologies are the founding basis for US-China cooperation to facilitate the development of science and technology in the Third World. The seeming US-Chinese strategies are interdependent even when it comes to their global roles. China seeks a greater leadership role in regional economic affairs centered on offering to have agricultural products included in the trade liberalization package to be negotiated, while US relation with China help her to maintain a economic leadership in competition with the EU. Since, the timing of China's decision to form an FTA with ASEAN may also have to do with the ongoing difficulty in resolving a bilateral trade dispute that began with Japan's imposition of temporary safeguard measures on imports of three items of agricultural from China in June 2001. Though China currently inspires anxieties within the United States that U.S. dominance may end, such sentiments regarding global power and prestige are not unique to this day and age. Following the end of the Cold War, much strategic commentary surfaced regarding the need to prevent Japan and a newly reunified Germany-two states that at the time were seen to be gaining in international position-from gaining any undue increase in global influence at the expense of the U.S. position. These historical examples suggest that, though concerns over democracy and human rights often animate U.S. worries over China's rise, such anxieties ultimately are not determinative. The essential feature of this hegemonic parable is that the United States will not lightly brook any changes to the power relationships that it has cultivated; appreciating this essential truth is a crucial component in constructing an effective China policy for the future. Again, in anticipation of the next new ascender on the international scene, India, some prognosticators in Asia have in fact already downgraded the long-term prospects for China's rise. China's strategic concerns about possible American encirclement under the guise of counter-terrorism that would lead to the transformation from the current six-party talks concerning North Korea into a multilateral Northeast Asian security mechanism would complement the U.S.-led bilateral military alliances in Northeast Asia and China's more recent partnership arrangements with countries in the region. Economic and cultural exchanges to enhance mutual understanding between both peoples have decreased the negative impact of nationalism in both country and China's fear to a certain extent. In the trade field, US are continually urging China to abide by the rules of the WTO in order to increase U.S. exports. The American side can help in reducing the bilateral trade imbalance by removing restrictions on the export of high-tech products to China. Another field of potential cooperation is the joint development of space technology. The recent China-EU cooperation on the Galileo program has set up a useful model to the United States Economic dialogue can prevent the disputes from being politicized. Exchanges between the legislatures and media organizations of the two countries can, over time, mitigate contending nationalisms and foster positive political support in both countries for the betterment of the relationship. The optimists argue that the U.S.-China relationship is maturing. As Colin Powell said, "the relationship has improved for the reason that neither we nor the Chinese leadership anymore believe that there is anything inevitable about our relationship - either inevitably bad or inevitably good."10 In contrast to Sino-American relations of earlier years, the current relationship permits reasoned discussion of differences without excessive influence from domestic politics. Even in the field of human rights, the two sides seem to have reached a tacit agreement that the differences are a case of conflicting values and ideologies that should not damage the bilateral relationship as a whole. The near-annual debate about China in the United Nations Human Rights Commission has become a ritual of "criticism and response" in which the United States offers its disapproving views, but China defeats the resolutions. Bilateral differences over trade and human rights may never be resolved, but within the broader context of strategic cooperation, they can certainly can be managed for economic promises that each holds for the other. Works Cited 1. Dwight, Perkins. "Completing China's Move to the Market," The Journal of Economic Perspectives, Spring 1994. 2. Fung, K. C., Lawrence J. Lau, and Joseph S. Lee, US Direct Investment in China, unpublished manuscript. 3. Henry S. Rowen, "The Short March: China's Road to Democracy," The National Interest, Fall, 1996. 4. George W. Bush, The National Security Strategy of the United States of America (Washington, D.C.: White House, September 2002), p. 5. 5. U.S.-China Security Review Commission, The National Security Implications of the Economic Relationship between the United States and China (Washington, D.C.: U.S. Government Printing Office, July 2002), pp. 38-39. 6. U.S.-China Business Council, "U.S.-China Trade Statistics and China's World Trade Statistics," http://www.uschina.org/statistics/tradetable.html, updated February 28, 2005. 7. James L. Richardson, "Asia-Pacific: The Case for Geopolitical Optimism," National Interest, No. 38 (Winter 1994/95), pp. 28-39. Regarding trade and U.S.-China relations in particular, see, for example, the remarks of President Bill Clinton at the Paul H. Nitze School of Advanced International Studies, Johns Hopkins University, Washington, D.C., March 8, 2000, in Public Papers of the Presidents, William J. Clinton: 2000 (Washington, D.C.: U.S. Government Printing Ofce, 2001), Vol. 1, pp. 404-408. 8. Michael Oksenberg and Elizabeth Economy, eds., China Joins the World: Progress and Prospects (New York: Council on Foreign Relations, 1999), pp. 1-41; Paul Evans, "The New Multilateralism and the Conditional Engagement of China," in James Shinn, ed., Weaving the Net: Conditional Engagement with China (New York: Council on Foreign Relations, 1996), pp. 249-270; and Alastair Iain Johnston and Paul Evans, "China's Engagement with Multilateral Security Institutions," in Johnston and Robert S. Ross, eds., Engaging China: The Management of an Emerging Power (New York: Routledge, 1999), pp. 235-272. Belief in the virtues of institutions has had a real impact on U.S. policymakers. See, for example, the discussion in an article by a former commander in chief of U.S. forces in the Pacic and his top strategic adviser. Dennis C. Blair and John T. Hanley Jr., "From Wheels to Webs: Reconstructing Asia-Pacic Security Arrangements," Washington Quarterly, Vol. 24, No. 1 (Winter 2001), pp. 7-17. 9. Colin L. Powell, "Remarks at the Elliot School of International Affairs," George Washington University, Washington, DC. September 5, 2003. Read More