February 20th, 2010

Making sense of Sino-US relationship

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US strategy towards China has been particularly confusing to many people. It is strange that the two major economic power of the world today would taunt each another in so many different issues. This UK Guardian article nicely summarized the situation.

This dysfunctional, agitating approach to Sino-US negotiations and communications only continues to erode the relationship between the two countries, which has already been weakened recently as a result of US comments over internet censorship and the sale of arms to Taiwan. This should not become the normal way for the two nations to engage, particularly when it comes to bilateral issues.

One obvious difference between US and China is the ‘Culture Differences’. ‘Culture differences’ is often used to explain the disagreement but seldom really understood. The background and construct of the political system between the two country couldn’t be greater, that leads to misunderstanding and mistrust.

Let me give two examples:

(1) On Google stop censorship in China,

Google has publicly stated that they do not condone China hacking of their system and therefore stop censorship in China.

China Government: US government is behind this.
US Government: Huh?

Most of us outside China probably have the same reaction as US Government but most of us inside China is consistent with China thinking.

It certainly does not help with Hillary Clinton’s speech which only adds to the speculation.

The reason for Chinese logic is because such things don’t happen normally unless the government is behind it, as some major events are in China, like the arrest of the richest Chinese man or foreigners businessman.

It is unimaginable that a company has integrity and social responsibility like Google risking their bottomline to make a point. For that matter, most US companies don’t behave like Google either.

To the extend, there are speculation that Baidu been hacked is part of the coordinated plan of US government. No kidding, I am serious!

(2) On Hillary Clinton speech,

Clinton focus on on Internet freedom. China respond by slamming the speech, not surprisingly.

US Government: Internet Freedom is good for everyone and makes it easier for US businesses to operate in China.
China Government: I am also a victim of hacking and you are ‘Information Imperialism’.

This one is a little harder to decipher so I have to give a little more context.

In general, American are generous and altruistic people, who cares about the freedom, democracy for everyone in the world. That’s the social values, despite the dog-eat-dog capitalist economic views.

Chinese couldn’t be more opposite than American. Economic-wise, despite the move to market liberalization in the last 20 years, there is a deep rooted communism, that resent that some people are more rich. Socially-wise, Chinese are more “to each its own” due to the historical background of China.

The difference are clearly illustrated by American and Chinese approach towards Africa. One focus on social problems, like democracy, human-rights, provety etc, while the other is all about business even with dictators.

Btw, I am talking about the people when I say American and Chinese, not the government. Both US and China governments adopted the same Realist foreign policy.

But in US, the government may for political reason take an altruistic moral high-ground posturing, in order to appease the American electorates and possibly political financiers. This explains the first part of Clinton’s speech. Sometimes the posturing may lead to further action like Obama meeting with Dalai Lama.

Incidentally, this is also why it makes US government looks hypocrite as well as confusing; US have one time or another, for national interest sakes, support regime that does not follow some of the principles (e.g. human rights) that US government public condemn on other country like China.

Of course, China do not understand the domestic political implication of US statements and had taken it totally at face value. China politics are different; It is a myth that the China government don’t care about the Chinese people opinions but they certainly do not react to vested interests the same way as US government do. They do not talk, they just do, in big way to make a statement (in this case “Yes, we are serious about corruptions!”)

China also believes there is a “cyberwar” on-going with the rest of the world. It has to build up its offense as well as defense, as she believes US is also doing. (No one knows for certain since such spook information is not publicly available).

Thus, China response that she is also a victim of hacking implies that US is been hypocrite as usual; US is also hacking us, so what’s your problem? Crying foul because you lost out to the race? I am (not) sorry I got caught.

The second response, the exact words from the China is “China’s real stake in the ‘free flow of information’ is evident in its refusal to be victimized by information imperialism“. This got most of the non-Chinese shaking their heads in amazement at how China twist the situation around; Afterall, everyone knows US has a free press and China don’t.

Americans believe strongly in the First Amendment and thus do not tolerate any intervention from the US government with its media. If you are (almost) liberal, you can tune in to CNN and if you are conservative you have Fox. There are hundreds of other channel of all political spectrum if you are neither.

But that’s not how China see the situation. US has a free press but all of them are singing the pro-American tunes and heavily bias against China. It does not matter if it is CNN or Fox, they are the “same” towards China. (Actually, that’s how non-American’s view US media in general - there are little differences between Fox and CNN as both are pro-US as evidence by the news reporting on the “War on Terror” over the last few years.)

Secondly, China may be growing stronger economically but they admit they are are very far behind the “soft influence” the US has over the world. The media all over the world is heavily influenced by US (Hollywood) culture and not CCTV. For every Jackie Chan, there is 100 more Tom Cruise.

View from that perspective, the “Information Imperialism” comment make a weird logical sense; that it is the vested interest of the US government to further exerts its soft influence to China as well as the world, so goes the thinking in Beijing.

There are far too much misunderstandings between the two countries. With the rise of China to be the 2nd economic power, it is important for both China and US to understand and cooperate with each another. Unfortunately, it does not look like anytime soon.

—- Amendment 1 —

I am sorry I gave the impression that both side need to keep their mouth shut. That was not my intend. I meant to explain the differences how China and US view the same issues.

China is concern over social stability over anything. She remembers how US have assisted KMT during the civil war and also the Tibetan movement. This is why they are very concern over Taiwan and Tibet especially when US is involved.

I am sure US have very smart people working and advising them on China. They correctly calculated that China would makes a lot of noise over Dalai Lama but would not have any serious repercussion so long nothing sustainable come out of the meeting that can change the situation with Tibet.

With China’s US$70b annual military spending, US$6b one-time arm sale to Taiwan is not going to change the balance of power in the region. So I am sure they also calculated the repercussion of the arm sale to Taiwan wouldn’t be too bad; esp considering that China is not going to buy US arm in any massive scale anyway.

The problem is US see these issues in isolated silos and make calculation based on case by case basis. But China see the climate issues, the re-evaluation of yuan, the Internet freedom, the arm sale, the dalai lama, etc etc as a single foreign engagement issues.

Are you a friend or foe? If you are a friend, we can quibble over the details, but at the end of the day, we are still friend. But increasingly, US is not giving that impression at all.

On the other hand, China is very suspicious of US. US have far better understanding of the China system than the other way round. The lack of understanding of how US government vs American’s vested interest vs Americans, means China leaderships often come to a wrong conclusion on the motives of US.

The Copenhagen Summit is a great example: China think US is trying to cap the growth of China using climate as an excuse, while US is trying to fulfill campaign promise. The fact it may contain China growth comes as a secondary benefit, maybe.

China also have smart people working for them who understand how US politic works, but China political masters cannot grasp the behavior of US politicians due to the differences in political background. The way you get to the top in China is vastly different from US.

I sense it will take at least one generation of China leadership to truly understand US. And I sense this US administration is making all the right decision and compromise on issues but miss the big picture of Sino-US engagement.

Therefore, I can think both side will get increasingly hardline towards each another, and I don’t think it will get better anytime soon.

—- Amendment 2 —

I am really concerned how Obama’s administration approach towards China. If the silo approach is to proceed further, I can imaging China will stonewall and not cooperate with US in major international issues. Then US hardliner will have an excuse to push their agenda to “contain China”, forcing the administration to be even confrontational on China. This will lead to a downward spiral.

There is no doubt US and China is going to be the two largest economy in the world. Last thing we want to see is an “Economy Cold War” between the two.

Americans would likely to thinks that the ball is in China court to avoid that. Re-evaluate your RMB, close the trade deficits, get your people to spend more, come to the table on climate issues and do more in the middle east.

Chinese would think why should they cease ground before we start? Beside, you are the one who is provoking and making demands on us.

Green gas control is going to hurt China growth, not to mention the critical national energy interest (China is 100% self-sufficient on coal). At this moment, China growth is very fragile; If GDP growth slow down to 6% or less, China is going run into social unrest. The China leadership is aware of the problem and is preparing for that but it is going to take time.

Re-valuation of RMB is something China would do at its own pace at its own time. More importantly, while many American thinks that the root of China-US deficits lies in RMB valuation, but it is much more complex. During the Bush administration, the RMB-USD was adjusted 20% to US favor but trade deficits continues increases.

Getting Chinese people to spend more is like trying to get American to give up your guns. It is very common to see people saving up, and buying a car or house, and pay 100% in cash. Chinese are bought up with a extremely strong mentality to save and avoid debt like a plague. In fact, I won’t buy a car unless I have the twice the cash in the bank. But China is trying; portion of the US$700b stimulus package goes into matching consumer spending in tier-2/3 cities.

So how do we get China to the table?

I believe the best way is … cox. Some warm smiles, a big hug, and sweets words would go a long way. Silly but Chinese always has a soft spot for people who brush their ego and make them feel good.

But alas, it would be political suicide for Obama to “bow down” to Chinese.

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