Foreign Policy Magazine has a good article title on Calling China's Bluff. The tone of the article isn't quite as strong as the editors would have you believe from the title, but it essentially boils down to an analysis of how the U.S. and China are locked into a global financial version of Mutually Assured Destruction. China is America's biggest creditor, hence the jitters on the Street over Geithner's yuan comments during his confirmation hearing. At the same time, China will be hurt badly if there is a major devaluation in the dollar, the most likely cause of which are the actions of China. The article also references CCP banker Gao Xiqing's comments in the Atlantic. Gao makes many pragmatic recommendations for the U.S. economy that shouldn't seem so profound to our own people. For example, save more money.
The democratic world's problem has never been the growth of China - the Rise of the Rest is emphatically good - the problem is the growth of an undemocratic China for whom our distraction in the Middle East couldn't come at a better time (does anyone remember our plane being forced down on Hainan Island summer 2001? Anybody?) In The Return of History and the End of Dreams Robert Kagan answers Francis Fukuyama's overoptimistic The End of History, and points out that we are in a weaker position ideologically than at the end of the Cold War. That is to say, in 1991, there seemed to be only one direction for history to go - toward liberal democracy, and away from socialism. Now, we have Russia assasinating its human rights lawyers and journalists, and we have China pouring cash into African resource enterprises and even encouraging its people to emigrate there to run them, without regard for the heinousness of the thugocracies running those countries. The world's thugs are wondering why they should listen to the West's talk of liberal reforms and allowing elections and freedom of religion, when their pockets are full of Chinese cash. The ideological choice, for them, seems to be between politically and financially troubled democracies like the U.S., and cash-rich havens of growth like China, that have no silly obsessions about freedom of speech. In those terms it seems like a no-brainer.
The good news about this version of M.A.D. is that yuan and renminbi and dollars don't kill people. The twenty-first century can be a gigantic win-win for China, the U.S., and every other human being on this planet if a more democratic China is in the offing. The problem is not that it's China with a footprint in the world's developing markets; if it was Japan doing the same thing, there wouldn't be a cause for concern. The problem is that it's an undemocratic power's footprint distorting the currents of geopolitics. As we already know democracy in China has not automatically followed from an increase in wealth in coastal cities - ask the people in Tibet and Xinjiang. Almost alone among Republicans, John McCain is not shy about pointing out the need for this improvement in China's government, which is why it was such a damn shame that he accepted that VP candidate. This is why I fervently hope that self-described conservatives will wake up and help steer a possibly over-idealistic Obama administration toward encouraging the growth of liberty in China. The longer we wait to take a firm but constructive approach with China, the harder it will become.