April 24, 2022

By Bob Davis, a reporter who covered U.S.-China economic relations for decades for the Wall Street Journal.

Looking to win congressional approval to bring China into the World Trade Organization (WTO), then-U.S. President Bill Clinton rhapsodized how closer economic ties would mean greater freedom for Chinese citizens.

“The more China liberalizes its economy, the more fully it will liberate the potential of its people,” the president argued in a speech given in March 2000. “And when individuals have the power not just to dream but to realize their dreams, they will demand a greater say.”

The growth of the internet would help assure that hopeful outcome. “Now there’s no question China has been trying to crack down on the internet. Good luck!” Clinton said to gales of laughter. “That’s sort of like trying to nail Jell-O to the wall.”

Reading Clinton’s comments now seems not just naive but cringeworthy. China, it turns out, perfected Jell-O nailing and destroyed its own nascent online civil society. China has become more repressive, less open to Western ideas, and far more hostile to Washington’s global leadership, as Beijing’s recent “no limits” embrace of Moscow shows.

But does disappointment with the turn in U.S.-China relations mean the strategy of engagement—wrapping China more closely to the United States in a web of economic and political ties—is fundamentally flawed? Is any engagement strategy doomed to fail because Beijing acts in bad faith, or could it work in the future? Two new books explore engagement’s record—with an eye toward influencing the United States’ China policy.

In Getting China Wrong, Princeton University political scientist Aaron Friedberg calls engagement a gamble that didn’t pay off; the challenge now is how to reduce ties to a Leninist regime. In The United States vs. China: The Quest for Global Economic Leadership, economist C. Fred Bergsten not only argues engagement was a success but proposes that China and the United States act as co-CEOs of the global economy.

Both authors have long experience with China policy—at least as made in Washington. Friedberg has warned for years of China’s rising challenge and advocates what he calls partial disengagement. Bergsten, the founding director of the Peterson Institute for International Economics, a leading center for free trade economics, argued for a U.S.-China free trade agreement in 2014. (He is silent on that proposal in this book, perhaps out of a sense of its political implausibility.)

Both label China a “revisionist” power but use the term very differently. For Friedberg, Beijing is revisionist in the sense that it’s not the “responsible stakeholder” the United States has long hoped it would be—in other words, it is a threat. For Bergsten, Beijing is revisionist rather than “revolutionary” as it was under former leader Mao Zedong—in other words, it is more moderate and a potential partner.

In a compact, well-argued critique of U.S. policy, Friedberg traces how Democratic and Republican administrations came to embrace engagement for ideological as well as commercial reasons. By 1989, liberal democracy was on the march. The Soviet Union was collapsing, and Taiwan and South Korea were shucking off dictatorships—as was much of Latin America. Students in China were protesting for democracy in Tiananmen Square by parading with a replica of the Statue of Liberty. The attraction of U.S. ideals and prosperity seemed irresistible.

Of course, China’s leadership opened fire on the Tiananmen protesters and violently squelched the democracy movement there. But that setback seemed temporary. “The forces of democracy,” are so powerful, then-U.S. President George H.W. Bush said at the time, it would be impossible “to put the genie back in the bottle.” Within months, Bush patched up relations with China.

The United States’ largest companies, chasing the old dream of a billion customers, also competed to win friends in Beijing by lobbying for tighter U.S.-China relations. Boeing, in particular, was in the thick of the fight, organizing its many subcontractors to lobby Washington. Chinese officials rewarded its friends with orders worth billions of dollars.

Corporate lobbying frustrated Clinton early in his presidency when he sought to pressure China on human rights. But after he dropped that campaign and sought to engage with China, the same lobbyists came to his aid. Myron Brilliant, longtime executive vice president of the U.S. Chamber of Commerce, has estimated that business groups spent more than $100 million lobbying Congress for Clinton’s WTO deal—more than all the money they spent on trade lobbying since then.

Business officials and their allies in government were almost Marxist in their belief that economic materialism would lead to political change. Helping China get richer would increase the size of the Chinese middle class. That middle class would then demand political change. Not coincidentally, a lot of U.S. businesses would get richer too—both by adding customers in China and by slashing their manufacturing labor costs. The process had worked in South Korea and Eastern Europe. Why wouldn’t it work in China too?

Friedberg describes the reasoning this way: “By encouraging the growth of a middle class, the spread of liberal ideas, and strengthening the rule of law and the institutions of civil society, engagement would lead eventually to liberalizing political reforms.”

Except it didn’t. Engagement also didn’t produce the enormous boom in U.S. exports that business officials promised, along with the millions of U.S. jobs that a boom might produce. Instead, foreign investment in China soared, as did imports from Chinese factories often working for U.S. bosses. Factory towns in the American Midwest and Southeast couldn’t keep up.

American elites didn’t recognize China for what it was: a Leninist state looking to expand its power, as Friedberg argues in the more polemical sections of his book. He portrays Chinese leadership as a group of men who uniformly saw engagement as a threat to their power for exactly the same reasons that Americans embraced it.

“The purpose of reforming the system of Party and state leadership is precisely to maintain and further strengthen Party leadership and discipline, and not to weaken or relax them,” he quotes former Chinese leader Deng Xiaoping as saying. Chinese officials who followed Deng took that maxim as their marching orders, Friedberg writes.

Although it is certainly true that no Chinese leader sought to undermine the party, that doesn’t mean that some weren’t willing to take big risks on economic reform, even if that weakened state control. Until recent years, for instance, the state was generally encouraging the private sector to grow, even though that diminished the party’s ability to direct the economy.

It’s telling that former Chinese Premier Zhu Rongji, who took enormous risks for reform, rates just three pages in Friedberg’s book. Zhu shuttered thousands of state-owned companies, put millions of people out of work, and agreed to changes that opened China to foreign competition as part of the WTO deal—all changes that could reduce state power. Zhu prevailed over former Chinese Premier Li Peng, who feared the changes would give a boost to Western liberalism.

https://foreignpolicy.com/2022/04/24/china-review-engagement-economy/