[Mb-civic] Assessing China's power - Joseph Nye - Boston Globe Op-Ed

[William Swiggard]

  Assessing China's power

By Joseph S. Nye Jr.  |  April 19, 2006  |  The Boston Globe

WHEN CHINA'S President Hu Jintao visits Washington this week, George W. 
Bush will confront one of the key challenges of his presidency -- how to 
respond to China's increasing economic and military power. Everyone 
agrees that the rise of China is one of the transformative changes of 
this century, but Washington is divided between ''panda huggers" who 
welcome it and ''China hawks" who express alarm.

Secretary of Defense Donald Rumsfeld, for example, complains that 
China's defense budget has increased by double digits since the 
mid-1990s, and will grow this year by 14.7 percent. Senators Charles 
Schumer, Lindsey Graham, and others believe that China's manipulation of 
the yuan is costing American jobs, and they threaten retaliation. 
Democracy and human rights advocates point to China's abysmal ratings in 
Freedom House's survey of the least free countries in the world.

A recent poll reports that one-third of Americans believe that China 
will ''soon dominate the world," while 54 percent see the emergence of 
China as a ''threat to world peace." Some commentators have argued that 
China will be as disruptive to the beginning of the 21st century as the 
Kaiser's Germany was to the 20th century.

But such views exaggerate China's power. Measured by official exchange 
rates, China is the fourth largest economy in the world and is growing 
at 9 percent annually, but its income per capita is only $1,700, or 
one-twenty-fifth that of the United States. China's research and 
development is only 10 percent of the American level.

If both the United States and China continue to grow at their current 
rates, it is possible that China's total economy could be larger than 
ours in 30 years, but American per capita income will remain four times 
greater. In addition, China's military power is far behind, and it lacks 
the soft power resources such as Hollywood and world-class universities 
that America enjoys. In contrast, the Kaiser's Germany had already 
passed Great Britain in industrial production by 1900, and launched a 
serious military challenge to Britain's naval supremacy.

The fact that China is a long way from overtaking the United States does 
not prevent a possible war over Taiwan, which China regards as a lost 
province. Weaker countries sometimes attack stronger countries -- 
witness Japan at Pearl Harbor. But such a conflict is not inevitable as 
long as Taiwan does not declare formal independence and China does not 
become impatient. With time and generational change, this might be one 
of the rare conflicts that becomes more tractable over time.

We faced these problems a decade ago when the Clinton administration 
formulated our strategy for East Asia. We knew that hawks who called for 
containment of China would not be able to rally other countries to that 
cause. We also knew that if we treated China as an enemy, we were 
ensuring future enmity. While we could not be sure how China would 
evolve, it made no sense to foreclose the prospect of a better future. 
Our response combined balance of power with liberal integration. We 
reinforced the US-Japan alliance so that China could not play a ''Japan 
card" against us, while inviting China to join the World Trade 
Organization. In a rare case of bipartisan comity, the Bush 
administration has continued that strategy.

China is now our third largest trade partner and second largest official 
creditor. Critics contend this trade with China has made us vulnerable. 
China could hurt us by dumping its holdings of dollars, but to do so 
would also damage its own economy. The yuan may be somewhat undervalued, 
but China accounts for only a third of the increase in America's trade 
deficit over the past five years, and a revaluation will not remove our 
deficit. As for jobs, even if America bars low-cost goods from China, we 
will import them from somewhere else. To solve our economic problems, we 
must get our own house in order by raising savings, cutting deficits, 
and improving our basic education.

China's internal evolution remains uncertain. It has lifted 400 million 
people out of poverty since 1990, but another 400 million live on less 
that $2 per day. It has enormous inequality, a migrant labor force of 
140 million, severe pollution, and rampant corruption. Political 
evolution has failed to match economic progress. While more Chinese are 
free today than ever before in Chinese history, China is far from free. 
Some 110 million Chinese use the Internet, but the government censors 
the Internet. The danger is that party leaders, trying to counter the 
erosion of communism, will use nationalism as their ideological glue, 
and this could lead to an unstable foreign policy.

Faced with such uncertainty, President Bush has offered China a 
strategic dialogue to encourage it to evolve as a ''responsible 
stakeholder." He can take a lead from Ronald Reagan, who used the phrase 
''trust but verify." For China, the right strategy is ''embrace, but hedge."

Joseph Nye, a Harvard University professor, was assistant secretary of 
defense for international security affairs in 1994 and 1995. He is 
author of ''The Power Game: A Washington Novel."

http://www.boston.com/news/globe/editorial_opinion/oped/articles/2006/04/19/assessing_chinas_power/
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