Some interesting idea to try on for size on what is behind the US- China trade ‘war’ from a Chinese international relations scholar. Views that are not necessarily influential in China, but intriguing discussion on world trends although the focus is narrowly on the United States since the interview is about the trade ‘war’.
The article appeared on the Chinese language website of the Financial Times, one of the more interesting fora for discussion about China and Chinese relations with other countries given the censorship of China’s domestic media.
Reader comments on the Financial Times Chinese language website (so far not blocked in China) are often as interesting as the articles although there too, the commenters are necessarily from a relatively small slice of Chinese society — the economics, business and trade oriented intellectuals.
This article was picked up by Aisixiang, one of long line of Chinese philosophical and intellectual discussion websites. Its predecessors flourished for a time, then were closed down by the Party. So far Aisixiang has been able to keep on.
[also appeared on the Aisixiang website at http://www.aisixiang.com/data/112832.html]
Wang Jisi: Dean of the School of International Studies at Peking University. (Wikipedia)
Born: 1948 (age 70 years), Guangzhou, China
Employer: Peking University
Books: China at the Crossroads: Sustainability, Economy, Security, and Critical Issues for the 21st Century
Interview with Wang Jisi: The United States Launched Trade War with China Not to Disengage But to Change China’s Behavior and Make More Money
Some however are preparing for the worst and that is dangerous
Updated on October 16, 2018 06:18
by Zhao Liangmin Written for FT中文网
Zhao Lingmin: Founder of World Sensitivity
Wang Jisi: Dean of the Institute of International Strategy, Peking University
Entering a New Stage of World Politics: The Future Harder to Predict Than Ever
Zhao Lingmin: Some time ago you wrote an article about how you believe that “world politics has entered a new stage”. You summed up the four characteristics of this new stage:
- Convergence of nationalism and populism and simultaneous with the rise of authoritarianism;
- Resurgence of strongmen;
- More more intense geopolitical competition along with the danger of war; and
- The double-edged sword of high tech innovation.
Those views aroused widespread concern. Why do you think that we seeing these changes today?
Wang Jisi: Two long-term factors are responsible for the current accentuation of differences and even splits in world politics today. The first is the further growing economic inequality worldwide both between nations and within nations. The poorest countries in the world today have a per capita GDP of 400 to 500 US dollars; the richest countries such as the United States, Switzerland, and Singapore have a per capita GDP of more than 100 times that of the poorest countries.
At the same time, in the United States, where the per capita GDP has exceeded $60,000, the gap between the rich and the poor has been widening. Among the developed countries, the economic gap between emerging countries and the developed countries is narrowing, while the gap between emerging countries and the developing countries is growing, accentuating differences within the developing countries as a group.
The world Gini coefficient has now reached 0.7 or so – higher than the widely recognized 0.6 “danger level”. Some data shows that economic inequality, both between countries and within countries, has reached an unprecedented level.
The second long-term factor aggravating the political divide both between and within countries are rapidly changing and forming social identities throughout the world brought about by the large-scale movement of populations between countries throughout the world. Today over 300 million people are settled permanently in a different country from the one in which they were born.
Moreover, many seasonal workers cross borders and everywhere there are more migrants than before. People are living in a foreign country or, at home, discovering more and more foreigners with different skin colors, cultures and beliefs in their hometowns. This brings with it more homesickness, alienation and xenophobia. Easy low cost global connectivity through the Internet, smart phones and social media has made it easier for people to find virtual communities of compatriots, fellow villagers, or like-minded “friends”. This increasingly divorces social identity from local physical communities where people actually live. This phenomenon has accentuated social identities in terms such as race, ethnicity, sects, culture, values. This has intensified political polarization in many countries.
Economic globalization brings two big problems. First is the widening gap between the rich and the poor; the second is the identity politics steadily becoming much more important. Everyone feels dissatisfied, that society is unfair, and hopes that someone come along to correct this problem. They want a strong government, a political strongman to represent them, who will voice popular dissatisfactions. Donald Trump is such a person, Rodrigo Duterte the Philippines, Recep Erdogan in Turkey, Narendra Modi in India, and Vladimir Putin of Russia are all such people.
The rise of political strongmen changes not only a country’s domestic politics but is also reflected in its values and geopolitics. In the past “political correctness” was about respect for diversity, for unity and harmony in a society which has become more diverse. Now it is “representing me and my group” to fight against an opponent. At the national policy level, “political correctness” means tightening immigration policies and trade protectionism; with respect to the military, it means strengthening national defense forces; and on territorial disputes, standing up for one’s country against foreign countries. In this way, domestic class contradictions, ethnic conflicts, and contradictions among nations in the world become ever more acute; compromises are seen as weakness and betrayal.
Zhao Lingmin: Globalization naturally benefits those powerful elites who can break the bonds of the nation-state, sell things to the whole world, spread ideas to the whole world. The whole world is their marketplace. Ordinary people don’t this capacity and these resources. They can only stay home and listen to the orders coming down to them from the heavens above. Considering this, can the problem of inequality ever be fully resolved?
Wang Jisi: In history, there are mainly three ways to change inequality:
- War and war makes everyone poor;
- Revolution. After the Russian October Revolution, China’s 1949 Revolution, Iran’s 1979 Revolution, the property of capitalists was confiscated, the lands of local tyrants were divided, the rich were eliminated or forced to emigrate overseas. Then everyone seems more equal but can not get rich;
- Plague and natural disasters, such as the 14th century Black Death in Europe.
Current practice regulates the redistribution of wealth in society, the government invests taxation revenues in areas such as infrastructure, public health, and education and has programs to alleviate poverty. These programs bring change only slowly. In any country or kind of society, when productivity rises quickly, some will inevitably get richer earlier. Others will not be as prosperous. That gap will get larger and larger.
If you want to quickly narrow this gap, you might embrace a program of “kill the rich and help the poor.” But this dampens the enthusiasm of those who create wealth. The poor don’t find that much is accomplished and in the end nobody is satisfied.
Therefore, I think there is no way to solve this problem. At least it is difficult to make a real change. This phenomenon may continue for a long time. I still don’t see any good solution emerging. In European countries such as Denmark and Ireland, people are more accustomed to high taxes and high welfare, but even these countries are now experiencing a widening gap between the rich and the poor, especially with the arrival of new immigrants.
Zhao Lingmin: This dilemma is very unsettling. What should be done?
Wang Jisi: The world is entering a new period of historical transition. After the end of the Cold War, we believed that the world had entered a period of peace and development. Everyone was optimistic. In recent years, it seems that we might go back to the bad old days. Trends are hard to predict. We may see all kinds of impossible-to-envisage beforehand “black swan events”.
Today I read an article about the current crisis facing liberalism. According to the article there are three major theories in the 20th century:
- Liberalism represented by the United States ;
- Communism/Marxism/socialism represented by the Soviet Union and China; and
The Second World War destroyed fascism, the world moved on to a struggle between socialism/communism and capitalism/liberalism. Later, the Soviet Union disintegrated and socialism retreated to a low point. Liberalism nearly became the only kind of political correctness in most parts of the world. That what Fukuyama meant by the “end of history” that he wrote about.
In recent years, liberalism has seemed ineffective. Strongman politics has made a comeback. Many countries, including the United States, are dissatisfied with their own systems and begin to reflect on them.
What is the opposite of liberalism? This is an important question. I think the opposite of liberalism is nationalism. But is nationalism an ideology? It seems not. One might think that a common ideology should lead to mutual cooperation rather than conflict. However, if all countries believe in nationalism, they will instead move towards division and conflict.
Zhao Lingmin: Nationalism can’t solve the problem. It is just an emotional outlet. Some people are dissatisfied with the status quo and believe that the elites cannot represent him. Elites issues have nothing to do with their lives. Political strongmen voice their frustrations whether or not they actually really care about doing anything for them.
Wang Jisi: Going thirty years one way and then the next thirty years going in the reverse direction doesn’t work as a model anymore. Trump will do it for a while, and maybe the American people will feel that his method doesn’t work. They may need to change their tune then.
Zhao Lingmin: That an idealization, like talking about a pendulum effect. If you can really can swing from one side to the other safely, what happens along the way?
Wang Jisi: There are many possibilities. One possibility is to return to the era of war. Historical experience shows that neither conventional war nor nuclear war creates solutions other than killing everybody. Ultimately, cooperating and coordination among governments is needed to find a model for global governance. Maybe after some time, the pendulum swings back, but it is impossible to return to where we were before.
The times have changed. The new times have brought fundamental changes: thirty years ago, the control of the government over people’s freedom was limited. New emerging technologies strengthen those in power. People can, however, also use these same technologies to bypass government control. Many kinds of once fairly effective restrictions have become less effective. Complete information control is no longer possible. Information was once scarce. People could only believe what the government said. Now there are all kinds of gaps. The Chinese can know what is going on overseas. Americans can also know what is happening in China.
Another factor is that what people think about other ethnic groups changing in subtle ways. We used to say that US imperialism was bad but the American people were good; Japanese militarism was bad but the Japanese people were good. But today, many Chinese believe that Americans are bad and not just their government. Journalists, scholars, and businessmen are also very bad. The United States has also changed its view of China. In the past, China was considered an “autocratic government.” The Chinese government was bad by the Chinese people were good.
Now many Chinese and Chinese students have been found to be doing things in the United States to help the Chinese government. So Americans are starting to get unfriendly towards people of Chinese ethnic origin (huaren 华人) and that people of Chinese ethnicity are not good. There are also religious issues. Some have a thoroughly negative view of Islam. That is going on in many parts of the world. These one-sided extreme views are simplistic giving them the advantage of being very easy to understand. There are creating vast gulfs between different ethnic groups and even different subgroups of the same ethnic group.
“I am disillusioned with the United States”
Zhao Lingmin: Everyone said that the reason why Trump was elected was very important because he was supported by the “rust zone” of the Midwestern United States. Has this judgment been widely accepted?
Wang Jisi: I think it is generally accepted. Whether it is the “rust zone” or something else, some people in the American society have always felt that they are being exploited and deprived of opportunity by an unfair society. One cause is the industrial shift caused by globalization and rising insecurity caused by the arrival of new immigrants. These groups are found in big cities such as New York and Chicago. Many are disgusted with globalization and its beneficiaries, and Trump has voiced their dissatisfactions. But in any case, that the United States chose Trump gave me a great and unimaginable sense of loss.
Zhao Lingmin: Do you think this was accidental or inevitable? Of course, now that it has happened, you may find many reasons to prove that it is inevitable.
Wang Jisi: I think there must be some accidental factors but it is an inevitable that people like Trump can get a lot of support. The split in American society is an objective fact. Trump’s problem is that he not only needs to use social division to maximize his own interests, but that he spares no effort to deepen this split. This is a terrible place to be in.
Liberal criticism of Trump often turns into personal attacks. They say that he is worthless. He also attacks the liberals saying that they are worthless. This cause more confrontation, dislike and hate in society. I feel very disillusioned with the United States. When I first went to the United States in 1984, the political struggle in the United States was fairly rational and civilized. Now it is just cursing and nastiness wherever you turn.
Zhao Lingmin: When did you think the divisions in American society arose? Most people noticed this change when Trump was elected. It feels very sudden, but there must be a development process behind it. It couldn’t have happened all at once.
Wang Jisi: The divisions in American society appeared many years ago, but people didn’t pay too much attention to it. There was a racial riot in Los Angeles in 1992 but it wasn’t between blacks and whites, but between blacks and Korean immigrants. Now the gap among the American ethnic groups is getting deeper as is xenophobia.
On the one hand, many blacks and women represented by Obama and Hillary, people who have had the experience of being oppressed have a need to establish the political correctness of multiculturalism. Some are just the opposite. Some are even naked white racists. These two processes are occurring at the same time. We tend to notice multiculturalism despise the rebound of right-wing nationalism and racism. When I was teaching in the United States in 1991, I was very careful not to violate “political correctness” and not to discriminate against blacks and women. In fact, the opposite tendency also exists. For example, a white girl said to me privately, “A black girl in the same class as me is no worse than me. I don’t work as hard as I am, but she enjoys a scholarship. It’s too unfair!” She was very disgusted about this. This is reverse racial discrimination. This means both sides of American feel discriminated against. The contradiction between the two has not been fully noticed.
Emotion probably has a more profound effect on politics than reason. Trump and his hardcore are emotional in that way – no matter whether he does this or that, he is still our man. The more you attack him, the more I support him. This is what disappoints me about the United States. In the past, I have overestimated the rationality, political consciousness, and level of knowledge of the American people.
Zhao Lingmin: Trump’s first cabinet meeting after taking office, most of the cabinet members including Vice President Pence are vying to show his loyalty to him. That is very feminine. This is very surprising: Can things happen in the United States?
Wang Jisi: Humanity is similar in every place, regardless of party and people. Trump also likes to use obedient, loyal people who want to keep their power and vote for it.
Zhao Lingmin: How do your peers in the United States, professors of Sino-US relations universities, view the current state of relations between China and the United States?
Wang Jisi: Some of them think that Trump has screwed things up, but when I ask, “If Clinton had been elected, would Sino-US relations be better than now,” they can’t give me an answer. Those who support the Democratic Party are very frustrated with the Trump phenomenon. Republicans do not accept Trump emotionally, but they have no choice; they have to give priority to party interests. At the same time, both parties have nationalist feelings. They believe that no matter what Trump is like, we Americans can criticize him but not you foreigners.
Zhao Lingmin: After the Sino-US trade war broke out, the general view was that the American elite’s understanding of China was completely reversed. Before they that China could be influenced by the United States. Now they see that China’s path is taking it further and further away from the United States. So they gave up their illusions and began to find ways to deal with China. In the future, even if the United States changes presidents, the current confrontation will continue. Do you agree?
Wang Jisi: I basically agree. However, there are still some American elites who believe that China may change. They can’t speak out in the current political atmosphere. If they say something about China, they will be regarded as a “panda hugger”. People will think that they have sold out to the Chinese. That wouldn’t be good for them so they prefer not to say anything. There are also some think tanks get some government funding. If they take a different position from that of the government, and speak up for China, that may affect their access to government funding. At present, the atmosphere of the United States is described by more than one person as a kind of “McCarthyism.”
Zhao Lingmin: How representative are Peter Navarro’s views?
Wang Jisi: Not many people agree but his views are very powerful because they mesh well with the current trend towards nationalism and populism. Navarro’s view can be refuted by citing facts, but his views have a kind of political correctness based on an emotion so refuting him and debating with him is difficult in the same way that debating with someone whether you Trump or not is difficult.
Why is the United States launching a trade war?
Zhao Lingmin: Why does Trump want to launch a trade war against China? Is it to hurt China?
Wang Jisi: My understanding is that American entrepreneurs still do not want to withdraw from China. They think they can make a lot of money in China. After all, the Chinese market is big, and in the past 30 or 40 years, some very strong path dependencies have been created – how can such a big and complex supply chain simply move somewhere else? There are not many places to choose from. For the present, these enterprises are opportunistic. They say that they want to exert pressure on China on the US government. On the other hand, they say to China that if you give me preferential policies, I will not leave. I think there are still many American companies see things that way. They have a wait-and-see attitude.
Their feelings about China are complex. On the one hand, they are very dissatisfied with various restrictive policies. On the other hand, they also realize that China is not the only country with these restrictions. Many many developing countries have similar restrictions. If you move your company to Egypt, don’t you think that the Egyptian government will regulate you? When they think about it, China is still good a good place to be. They can make money here. Therefore, they think that they should exert pressure on the Chinese government to continue with reform and open up some more industrial sectors to foreign investment.
Therefore, the reason the United States launched a trade war against China was not to pull out of China or to completely “decouple” from China, but to change China’s behavior so that it can make more money. This conclusion I have drawn from decades of involvement in Sino-US economic and trade relations. Some people in the US government and others in some American companies, however, are also preparing for the worst: decoupling of many of the economic links between China and the United States. This is dangerous.
Zhao Lingmin: Eliminate some things that are not to the advantage of the United States so that their companies will enjoy a better investment climate when they come to invest in China. After all, there are not many better places in the world worth investing.
Wang Jisi: Right. In the past, because of China’s low cost of manufacturing in China, US manufacturing was gradually attracted to and moved to China. Although the United States has been unhappy about this process of manufacturing moving to China, Sino-US economic and trade relations have continued to get stronger. As China has gotten stronger and now that it has been developing its own high tech industries, and is able to compete with the United States, the US has gotten worried.
Zhao Lingmin: In addition to the trade imbalance, what other causes of US dissatisfaction in the US – China relationship?
Wang Jisi: The US military is unhappy. The military is a big interest group. A few year ago, it did not believe that China was strong enough to pose a threat to the United States, and that China did not mean to truly exclude the United States from the Asia-Pacific region. During the past two years, China has taken a very firm position on the South China Sea issue. The United States has begun to feel that that the Chinese military is much stronger than before. They feel that if the US does not exert pressure on China, it will not have a foothold in the Western Pacific. The military, including the military-industrial complex, are hardliners on China policy. Formerly, when terrorism was the top concern, there was a lot of military spending and a great many companies and others forming a huge chain of interests linked to the manufacture and sale of weapons. Now, by pointing to China, contradictions with China on military security issues can be used to argue for more military spending.
In addition, the Confucius Institutes in the United States have made Americans feel that China’s values are different from those of the United States. China’s promotion of Chinese values in the United States is very difficult for Americans to accept. The ideological contradictions between China and the United States are also reflected their attitudes towards Chinese students and scholars studying in the United States.
Zhao Lingmin: What does the United States want? Do they really need to overthrow the Chinese system?
Wang Jisi: Some people say that if China does not make fundamental changes in its political system, good relations with the United States will be impossible. I do not agree with this. There are indeed people in the United States who want to change China’s fundamental political system, but the government and the political mainstream know that this is unrealistic and cannot be accomplished. However, the Americans do have demands in some specific areas. For example, the want China to become more required to be more internationalized and market-oriented, increase transparency in various fields, reduce government subsidies to state-owned enterprises, reduce the requirements for transfer of the proprietary technology transfer of foreign enterprises, and to make changes in the “Made in China 2025″ program and other policies. If these change, the United States will still be hopeful that they are at least making progress. Sino-US relations have been like this for a long time. The US asking price has always been very high. We have never accepted it in full. The two sides are always bargaining.
Zhao Lingmin: Some say that the pressure that the United States has put on China was to a great extent the cause of the firm line of Chinese foreign policy over the past several years.
Wang Jisi: I am not here to make political and moral judgments. If we are looking for the cause, it was the change in Chinese policy that led to adjustments in US policy towards China. In recent years, China’s strength has been increasing rapidly along with its international influence. China has increased its operations maintain protect China’s territorial sovereignty and maritime rights. China has put increased pressure on “Taiwan independence” and other splittist forces. China has strengthened the leadership of the Communist Party. The United States has become increasingly uncomfortable with China’s actions and has begun to react strongly. We can expect that these US reactions to Chinese actions will become ever more intense. The US may switch from the defensive to the the offensive.
The cause-and-effect relationship we see today also applies to 1949 and 1979. In those two years, changes in Chinese internal affairs led to big changes in Sino-US relations. Changes in US internal affairs have always had relatively little impact on Sino-US relations despite the many different presidents since then and many different political currents swept the US during those decades. The financial crisis broke out in 2008. That was major event for the United States. Did it cause a major change in Sino-US relations? Not at all.
I very much agree with my colleague Professor Tao Wenzhao that for over 200 years, the United States has never changed its strategic goals for its relationship with China:
- Free flow of goods and capital, and
- Free free flow of information and values.
Chinese have always had reservations or imposed boycotts to oppose two goals. We should criticize and have reason to criticize the United States but we should realize that China’s own actions have changed Sino-US relations and US perceptions of China.
Zhao Lingmin: Since the outbreak of the trade war, we have always insisted that we do not want to fight but are not afraid to fight. We accuse the United States of ruining our bilateral relations. We believe that we have institutional advantages that makes us less vulnerable to the fallout of a trade conflict than is the United States.
Wang Jisi: The trade war is an omen and a manifestation of the deterioration of Sino-US relations. It is not the cause. The Trump administration’s trade war is a tactic for mobilizing public support along a desire to make certain demands to further US interests. However continuing with the trade war serves the interests of neither country. It will solve nothing. As to which country could hold out better during a trade war, that is a strategic game between the two governments and an economic calculation of corporate interests. In the end, the government must calculate the gains and losses of their various interests and then rationally reach some compromises in order to stabilize the relationship. We need to cut our losses and to prevent trade wars or local disagreements from expanding into other areas that might lead to an overall direct confrontation between China and the United States.
Once emotions have won out over reason, there is the danger of a direct confrontation. That is something we need to be psychologically prepared for.
(I only represent the author’s point of view, editor: Yan Man.email@example.com)