Time To Get Tough With China

On this side of the Pacific, the problems with our economic relationship with China are manifest. We have a precedent-smashing level of debt, the Chinese own a good piece of this country, jobs are fleeing west for east, and their economy is booming while ours continues close to freefall. More, as our admittedly throttled-down consumptive frenzy continues, cheap Chinese goods (sometimes literally dangerous or poisonous or both, i.e. drywall, dog food and toys) encourage us to keep on buying things we don't need with money we don't have, thereby forestalling saving and thrusting us ever deeper into debt.

We hear much about the Chinese economic miracle, but there is an entire clutch of political and economic snakes on the other side of the Pacific, and they are just waiting to bite China in the industrial underbelly. First among these is the plight of nearly one billion rural workers who have been pushed from their homes with little or no remuneration and are fleeing to the cities hoping for jobs that are becoming increasingly difficult to find.

Second is the rape of the environment. Readers may see references to this here and there, but to the American eye, much of China is very nearly equal to the post-apocalyptic vision in Mel Gibson's 1980 film Mad Max, a desiccated wasteland with poisonous air and water and barely a living thing at large.

Third is the problem of repression. Using Big Brother spying devices they buy from us, the Chinese government monitors their population to a degree that would make George Orwell's entire casket spin. Media is controlled, and without the free flow of information whistleblowers are absent and corruption know few bounds. Worse, young, smart urban entrepreneurs don't care, because they've made the proverbial deal with the devil in order to get rich easily and quickly.

The Chinese were once a stunningly innovative people famous the world over for inventions like gunpowder, umbrellas, the rudder, the fishing reel, hermetically sealed research labs, a mathematical place for zero, decimal fractions, chess, brandy, watertight ship compartments and countless others. Now, devoid of their own brands, they are economic pirates obsessed with foreign export and trade. Despite recent improvements in this area, Chinese industry still specializes in the theft of the intellectual property of Western artists and thinkers and reproduce it freely, cheaply, and without paying royalties.

China is in the grip of the same consumptive fever that has held this country since WWII, when corporate captains flush from war dollars needed to convince us all that the American Dream had less to do with religious and political freedom than with the right to have a new car every three years and ever larger houses to fill by trading time for money, freedom for thrall to corporate masters. We are learning, belatedly, that this is not the model for happiness. The Chinese will eventually learn the same thing, but in the meantime we need to even things out if we are to get along. There is no such thing as a level playing field when our trading partners play undervalue their currency and act with political and moral abandon, while all the while we exercise a social conscience and pay for the programs such a conscience requires.

Chinese people see our standard of living and are willing to work for less to get what we have. Long term this process can't continue, because cheap manufacturing requires simple living. When the Chinese are unwilling to live simply anymore, when they covet what they can't afford, they'll demand more pay. More, as industrial automation (robots, assembly lines) increases, their workers will become just as expendable as ours became years ago, and a crisis will develop. To survive long term, their economy must evolve into a mature, regulated, capitalist model. Ironically, by supporting their machine now, we're not only digging ourselves a deeper hole, while supporting government corruption, repression, and a low level of domestic innovation.

The Chinese construe current protectionist acts (price control of tires, steel etc.) as unfair dictation of prices and policies. I submit we need to do more, not less, including property rights enforcement and culpability laws (who do we sue when our Chinese-made drywall rots and our pets die.) We would certainly gain leverage to enforce such protections if we got our own house in tighter order, yet most pundits seem to suggest we should become more competitive by dropping our standards of decency and compassion, and reforming our labor, social and even criminal laws. I don't believe that's the right course for us, and as a huge fan China's history, culture, and people I don't believe it's right for China either.

It seems politically correct to talk up the complexities of international trade these days, and present a blurry picture of a complex world in which principles are best left at the door. The consequences of limiting China trade are by no means trivial, but the Chinese and we are in the boat together. Perhaps we should worry less about the short-term costs and practical challenges of trade policy changes and more about doing the right thing for the long-haul benefit of both countries.

We might start with examining frankly and with an eye to improving things from the bottom up and the inside out all those way sin which our own values have fallen off the mark as our lives have become more self-centered and material. Why not work smarter, save more, consume less, and exhort our leaders to ethical behavior? Leading by example, we might have better success enforcing rules and sanctions that protect our own industry while encouraging China to grow in the direction of freedom and responsibility.