Opinion

Time on China's side in US ties

By Colin Speakman (China Daily)
Updated: 2010-11-24 07:56

If we move to an area where products are usually too bulky to be imported and need local support networks - automobiles being a good example - China cannot be accused of causing the decline of the US car industry. We know that is the result of a combination of lack of investment in innovation, poor management and unsustainable credit policies to finance demand. Instead, the rise of China's automobile industry - now the largest in the world - has saved the bacon of several US firms operating in China.

Indeed, the decisions of US companies to outsource jobs and diversify investment from mature Western markets to developing economies has a direct bearing on the decline in employment in the US even though it has helped improve the profitability of those companies. China's rise has provided the opportunity but it takes Western decision-makers to see it through, including the domestic employment-related impact.

Beijing faces economic pressures like Washington. It could say that the Western economic ills have created major problems for employment in its export industries. But instead of looking for scapegoats, Chinese authorities have knuckled down to create robust economic growth which leaders of international organizations have praised and credited with helping the world avoid a worse recession.

China has had a great opportunity in the Year of the Tiger to take forward good international relations in many other areas. The government is fostering strong relations with various countries in Latin America (a region where the US has some detractors), and is taking a lead in economic relations with African nations where Chinese investment and buying power is valued. The China-ASEAN Free Trade Area (CAFTA) launched this year boasts a population of nearly 2 billion - putting the North American Free Trade Agreement (NAFTA) and the European Union in the shade. China will prosper in trade and CAFTA will be become a springboard for "regional globalization" and the eventual launch of the yuan as a cross-border reserve currency.

None can deny that China, because of the Shanghai Cooperation Organization, is now more adept at fostering good relations with Russia, as well as Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan than the US is, and the appointment of China-savvy Kevin Rudd as Australia's foreign minister shows that Canberra values good ties with Beijing. European nations have a diversified approach to China, but the current "permanent" EU president who may help European nations speak with one voice is widely seen as pro-China and keen to develop a positive dialogue.

Beijing can readily devote more attention to the rest of the world while Washington wrestles with its position on China and risks becoming increasingly isolated in its continuing scapegoat approach. Ultimately, more cooperative relations will have to resurface and President Obama surely realizes that.

The author is an economist and director of China Programs at the American Institute for Foreign Study, a US-based organization that cooperates with Nanjing University and Beijing Language and Culture University.

(China Daily 11/24/2010 page9)