At a recent lunch with the New Zealand ambassador to United States, Mike Moore, China was the focus of discussion. The ambassador, who oversaw the country's entrance into the World Trade Organization as its director general, claimed the experiment had been a success. China's accession had helped lift 500 million people (many of whom are Chinese) out of poverty, he argued.
I have some sympathy with this view; lifting so many people out of poverty is by no means an insignificant achievement. Nor do I wish to join the ranks of regular China bashers. I don't expect -- nor do I secretly hope -- that China's economy will implode anytime soon. Given how dependent global economic recovery is on China's continued growth, and how fragile the Eurozone looks right now, this is a very good thing.
I do, however, have two fundamental objections to the argument:
- Firstly, enforcing the norms of International trade is the primary objective of the WTO, and whatever successes it has brought, China has yet to embrace the spirit of its membership.
- Second, literally and metaphorically, there are currently no votes in China.
The political shift towards liberal domestic and international norms that many hoped for during the 1990s has yet to arrive. Entrepreneurs and the new economic elite have not risen up against the Communist Party and called for democratic reform. Quite the contrary, they collaborate effectively with the party-state, much as industrialists did with Fascist regimes in Europe in the first half of the 20th century. Planned and controlled political economies, not matter how distasteful some may find it, are often effective motors of economic development. Democracies, as recent set backs with retail reform in India testify, can be messy and problematic.
As a consequence of its growing economic strength, China is also able to disregard the norms of liberal internationalism. The government continues to aggressively pursue a neo-mercantilist economic agenda, systematically manipulating its currency -- assisting in the development of massive trade surpluses -- hindering foreign investment and market access, and buying strategic assets from natural resources to the government bonds of industrial nations.
Today, the capacity of the industrial world to secure its own economic futures is in question. Progressives, in the United States and Europe, have long argued that investment in science, technology and knowledge will allow us to develop the products and services of the future, and thus help guarantee economic prosperity. But if our major firms are blackmailed into giving away intellectual capital for access to the burgeoning Chinese market or the Chinese government remains unwilling to enforce intellectual property laws for the very software they themselves use, how effective can this strategy of economic renewal be in the medium term?
On either side of the Atlantic, the general public senses this, as ever-greater numbers loose faith in their own and their children's futures. The irony is that greater engagement with international partners has become more necessary at the very time people are turning their backs on globalization. President Obama recently asserted that the United States is now a pacific power, much to the displeasure of European leaders. What is really needed, however, is a transatlantic strategy for economic growth, one that includes a common constructive approach towards China, aimed at ensuring a level playing field for trade, market access and investments.
This is a project around which a new transatlantic progressive alliance should coalesce: a globalist, more interventionist, and less naive successor to the third way. If we are capable of rising to this challenge, we will revive our movement politically, strengthen our hand in international trade negotiations, and more importantly, provide a solid and sustainable foundation on which to rebuild our domestic economies.
Time will tell, but for progressives, there may yet be votes in China.