Note: One of us (Michael) just returned from China, his third trip in six months; the purpose of this trip was to launch his latest book, China 2020 - How Western Business Can - and Should - Influence Social and Political Change in the Coming Decade (Cornell University Press 2009). Our latest blog focuses on the political and business climate he found during his recent visits.
The sentiment here isn't being driven by the fact that his book launch at a Beijing bookstore was shut down by the police two days before anniversary of the Tiananmen Square massacre. Michael's personal brush with Chinese censorship is extremely minor compared with the fate suffered every day by Chinese citizens like jailed democracy activist Liu Xiaobo, or rights lawyer Gao Zhisheng, who was disbarred and has been missing since February 4 when he was taken away by the state police. Michael was considerably more fortunate; on the morning of June 4 -- the 20th anniversary of the Tiananmen massacre -- he was able to launch his book at an event cosponsored by Western business groups.
110 people, a large audience for this kind of forum, showed up at the book launch, and a frank discussion ensued on the themes of China 2020, i.e. the degree to which capitalism and Western business were contributing -- or not -- to the development of freedom and human rights in China. In the public discussion, as well as in private discussions with both Chinese and Western business people, Michael reached the sobering realization that it may perhaps be too late to expect Western business to have the hoped-for positive impact in China.
What was striking about these conversations in recent months was the air of complete resignation and capitulation about how Westerners can do business in China. In the words of one American corporate lawyer, "The foreign business community has gone completely native." The clash of civilizations between the free market and authoritarian China is turning out to be a rout -- and the free market isn't winning. As has been true throughout the centuries, Westerners seeking to change China are once again banging their heads against the Great Wall. Any change will be on China's terms, and in no way is it going to benefit the companies doing the compromising. A good example is Google, which bent over backwards to please the Chinese government; despite all its accommodations, it remains a minor player in the Chinese Internet search market.
As Google, Cisco, and Yahoo! learned when they were asked to comply with China's Internet censorship policy, and as Dell, Hewlett-Packard and Apple are about to discover as they review the party-state's demand to install censorship software on all computers sold in China, even high-tech companies offering sophisticated products need to be filtered through the screen of the party-state before they can be sold into the Chinese market. The sad truth is that quality and efficiency are not the surest means to prosper in the "new" China; rather, it's the "old" Communist-era formula of good personal relations with the party-state. As argued in China 2020, this excessive reliance on personalized relations instead of the rule of law is creating long-term instability for business property rights in China. But in interview after interview, Western and Chinese business executives said they had no other choice if they wanted to continue doing business in China. In fact, in almost a decade since China entered the WTO not one Western company has exercised its WTO legal rights to challenge any level of Chinese government. Unless this pattern changes and changes fast, Western nations are going to wake up soon and find they're sharing world power with a mostly poor, economically stagnant and increasingly hostile China that still fancies itself a world superpower.
Because the Western business community is so cowed by the party-state, positive change will require a nuanced foreign policy from Western governments. Thus far, however, the Obama Administration's approach to relations with China mirrors that of the Bush Administration, and offers little hope of questioning the dominance of the party-state on any front. When Secretary of State Hillary Clinton visited China earlier this year, she shockingly announced that human rights were no longer on the table between the U.S. and China because of the ascendancy of economic issues. Treasury Secretary Timothy Geithner, the other half of the Obama Administration's China team, came to Beijing on June 1 of this year, discussed long-term trends in the U.S. bond market, and skulked out of town just before the Tiananmen anniversary lest he find himself in the embarrassing situation of having to offer an opinion about the event. To her credit, Secretary Clinton did put out a press release calling for a full accounting of the events in Tiananmen Square; in an indication of Chinese disdain for the message, it was immediately and unceremoniously rebuffed by a lower-level Chinese official.
What will be the place of democracy and human rights when Secretaries Clinton and Geithner meet with high-ranking Chinese officials at the Strategic and Economic Dialogue scheduled in Washington this July? What will President Obama, who spoke so eloquently about democracy and human rights in Cairo, say on these subjects when he makes his first visit to China at a still to be determined date? We don't know those answers yet, but given what we've seen to date, we're worried.
What's clear is that we need a reset of the fundamental premises underlying our current relationship with China. The point is not that we should go back to an era of China-bashing and negativity -- economic engagement is still a good idea, and it has in fact led to many dramatically positive economic and social changes in China. However, the idea that the best way to interact with China in the 21st Century is to be an unquestioning "friend," and the belief that economic engagement will automatically lead to progress on democracy and human rights, are simply not valid. Nor is it true that China is holding all the cards because they buy our treasury securities. The economic relationship between the two countries is much more complex, with both sides highly mutually dependent. U.S. negotiators play right into China's hands by feebly assuming that we are dealing with "the China that can say no." In fact, because of China's dependence on trade with the U.S., both sides have great economic leverage.
The weak-kneed and vague "friends without benefits" policy has been promoted by a narrow band of short-sighted business interest groups and their enablers, like Kissinger Associates, who are worried about losing out on an illusory China gold rush. It should be obvious by now that simply adopting the Bush Administration's China policy without scrutiny isn't working any better for the Obama Administration than it did for its predecessor; the latest casualty was American climate change envoy Todd Stern, who came back empty-handed from a much-ballyhooed negotiation in Beijing. China has also been less helpful than we'd hoped in dealing with the Korean peninsula.
If America is to positively advance our long-term relationship with China, the Obama Administration needs to take back our China policy from the special interests. In the same way that President Obama courageously spoke about the concerns of the West with the Muslim world, this administration will need to find a voice to speak constructively with China on a broad range of issues -- from WTO compliance and intellectual property to Internet freedom, product safety, and labor rights. The point is not to make China into an enemy, but rather to be more thoughtful about how we can develop a realistic and sustainable friendship based on shared interests rather than blind and unquestioning acceptance.
When President Bill Clinton traveled to China in 1998, he gave a forceful speech at Beijing University (Beida) quoting Benjamin Franklin in a call for improvements in human rights conditions: "Our critics are our friends, for they show us our faults." It was a powerful moment, and was televised throughout China. We wonder whether President Obama, in his first trip to China, will rise to the occasion the way he did in Cairo, or whether the current administration policy on China will continue to drift in dangerous complacency. In preparation for his Cairo speech, it was evident that President Obama listened to all sides of the debate, and the result was a thoughtful speech that spoke eloquently about mutual respect and cultural autonomy but also about human rights and democracy. We hope that when he travels to China, President Obama gives equal respect to all points of view and is able to speak as eloquently about democracy and human rights in a nation where they very much hang in the balance.