By Clay Chandler
July 28, 2018

If you read only one China-related story this week, I’d recommend this thoughtful essay by veteran Wall Street Journal editor Bob Davis reflecting on Bill Clinton’s decision to push for China’s admission to the World Trade Organization. It opens by recalling Clinton’s heady optimism that accepting China into the WTO would lock it onto a development path that would take it from isolated Communist backwater to modern, market-oriented democracy. Bob quotes from a landmark 2000 speech in which Clinton proclaimed to an audience at Johns Hopkins University: “By joining the WTO, China is not simply agreeing to import more of our products, it is agreeing to import one of democracy’s most cherished values, economic freedom. When individuals have the power not just to dream, but to realize their dreams, they will demand a greater say.”

From the vantage of 2018, that statement may seem naive. But to Clinton and members of his economic team, it seemed self-evident. China was, as Clinton put it to Chinese president Jiang Zemin in a 1997 press conference in Beijing, “on the wrong side of history“—and in those days, when China’s economy was much smaller, the conventional wisdom in Washington was that the sooner we allowed China to trade with us, the sooner China’s leaders would scramble to remake China’s economy in America’s image.

I remember those sentiments well because, for Clinton’s first term and most of his second, I was a Washington-based economic writer for the Washington Post. Then in 1999, the Post dispatched me to Hong Kong to write about economics in Asia. It was a head-spinning experience. It became immediately evident to me that the lofty free-market rhetoric preached in Washington had nothing to do with the state-controlled reality I was discovering on China’s mainland.

What strikes me about Bob’s essay is that it hints at how, over the years, many of the most prominent American advocates of admitting China to the WTO have come to feel bamboozled and betrayed. My sense is that a similar phenomena holds true for journalists. Without naming names and at the risk of gross generalization, what I’ve observed in my years following China is that correspondents with the best Mandarin skills and greatest facility for understanding Chinese society have tended to emerge as the most disillusioned and sharpest China critics.

Robert Atkinson, president of a group called the Information and Technology Innovation Foundation, also ponders the evolution of the U.S.-China economic relationship in an essay published this week in the conservative National Review. The piece is something of a polemic, but it’s still worth reading. It’s entitled, “Who Lost China?” evoking the question raised after World War II as the U.S. foreign policy establishment sought scapegoats for China’s drift into Communism under Mao. Atkinson suggests U.S. elites have lost China a second time. He faults presidents from Nixon through Obama for failing to recognize that China’s leaders never had the slightest desire to remold their system into a market-oriented democracy. Rather, he argues, party planners stuck doggedly to their goal: a mercantilist, authoritarian system bent on party control and global technological supremacy.

Atkinson decries “the stifling groupthink of the Washington trade and economics establishment, which, almost without exception, refused even to consider the possibility that Chinese economic and trade policies might pose a threat to the United States. The Washington elite-consensus view was and is that trade is always good (even one-sided free trade in which the other side is mercantilist); that while trade might hurt individual workers, it can’t hurt the overall economy; and that there is no difference between challenging foreign mercantilism and naked protectionism.”

And yet it’s not clear to me that, within the “Washington trade and economic establishment,” such “groupthink” still prevails. Atkinson, for example, cites a recent Foreign Affairs article co-authored by former Clinton security advisor Kurt M. Campbell called “The China Reckoning”—which seems to acknowledge that the Clinton policy of engagement with China was a flop. Is it possible that the US media, in its fascination with Donald Trump’s “populist” political agenda, has failed to draw attention to the fact that America’s elites, too—in business, foreign affairs, academia and media—have fundamentally changed their minds about China?

In recent weeks I’ve noticed a flurry of stories in the Western press suggesting that perhaps Xi Jinping has overplayed his hand in asserting China’s claims to prominence on the global stage and sparring with Trump on trade. The Chinese economy is slowing. In recent days, China’s economic planners have signalled that they are shifting back to an emphasis on growth rather than trying to scale back the nation’s spiraling bad debts. Trump cut a trade deal with the EU, enabling him to focus on tariffs against China. Trump is blunting the impact of China’s retaliatory tariffs by borrowing a page from China’s own playbook and doling out subsidies to U.S. soybean farmers. Meanwhile, some argue that travel restrictions imposed by Xi on the party’s top leaders have limited their ability to have in-depth discussions with U.S. counterparts or understand how leaders in the rest of the world perceive them.

Could it be that, while we in the West agonize over “Who lost China?,” China’s leaders, as they prepare for their party conclave in Beidaihe, are also agonizing over “Who lost America?”

More China news below.

Clay Chandler
@claychandler
clay.chandler@timeinc.com

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