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Shambaugh, David
Current History; Sep 2010; 109, 728; ProQuest Political Science
pg. 219
CURRENT HISTORY
September 201 0
"The worst thing Washington could do is to operate on autopilot, to assume that past strategies and
policies (which have generally served the United States well) are ipso facto indefinitely useful."
219
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THE SCORECARD
In retrospect, these four pillars have anchored
American strategy toward China since the late
1970s. One could also add, as a kind of fifth
pillar, the American version of the "one China
policy" concerning Taiwan, though it is more a
policy than a strategy. It has served well to maintain the peace across the Taiwan Strait for four
decades. But now that the cross-strait dynamic has
changed, so too must some elements of US policy
toward Taiwan.
The relevant questions concerning the four
pillars now are the extent to which they have
been successful in achieving their intended aims;
whether they need to be maintained, revised,
or abandoned; whether they are appropriate to
a changed China and changed regional circumstances; and whether a new set of strategies is
called for. On balance, the four strategies have
to be considered substantially successful, but not
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Some short-term economic concerns lingerwhile diversifying into India, Vietnam, Indonesia,
an urban residential property bubble, creeping
Mexico, and elsewhere in Latin America.
inflation, and still excessive personal savingsbut the economy on balance remains robust. The
THE PARTY ISN'T OVER
National Bureau of Statistics predicts 9.1 percent
The second reality of today's China that
growth for 2010, largely as a result of a surge in
America must take into account has to do with
secondary industries (mining, manufacturing,
the country's political system: It will evolve, but
and power). The government has also taken
slowly and in its own fashion, staunchly resistant
measures to cool off the red-hot property market
to outside pressure.
Chinese politics, to be sure, is incrementally
and has tightened monetary lending nationwide.
becoming more plural and liberal. Many domesThese short-term measures are likely to lead to
continued strong growth over the medium and
tic political reforms (including inside the CCP
longer terms.
itselD are difficult to see from outside China, but
However, the real story of the Chinese econthe political system is getting more transparent,
omy-and a serious concern to the outside
accountable, meritocratic, participatory, efficient,
world-is the state's heavy "invisible" hand.
and responsive. Yet, despite (or perhaps owing
State plans, state agencies, state investment,
to) these improvements, the CCP remains firmly
state banks, state trade protectionism, and state
in control, and it also enjoys widespread popular
cadres still guide the national economy. China's
legitimacy.
discriminatory "indigenous innovation" policies,
The third reality is that the People's Liberation
aimed at building "national champion" firms and
Army (PLA) is becoming a force to be reckoned
allocating government procurement contracts to
with. Although the PLA remains a very long
select national companies, are a particular conway from being able to project power globcern today. And China
ally (except with ballistic
has not complied with
missiles and cyber capaits WTO accession combilities,
which it already
The real long-run competition with China
possesses), it is rapidly
mitments in the areas
is already taking place in the secondary
of domestic distribuemerging as a significant
school classroom, and China is winning.
tion, financial services,
regional military power
technology
transfer,
in the western Pacific,
and intellectual propNortheast and Southeast
erty rights protection-all areas in which foreign
Asia, increasingly the Indian Ocean, and space.
firms suffer greatly.
The fourth reality is that China has become
Yet foreign corporations cannot ignore China's
truly a global actor-but is only a partial global
growing domestic economy; indeed, all major
power. Diplomatically and commercially, China is
multinationals need to consider making China
now present and active everywhere on the globe.
a "second home" in their global operations.
As such, it is increasingly bumping up against the
Penetrating the China market, however, is now
interests and equities of the only other truly global
harder than ever. Recent surveys by the US and
actor-the United States-as well as regional
European Chambers of Commerce in Beijing all
powers. Militarily, however, China's hard power
point to declining business confidence and subis not being felt outside of Asia. And Beijing's
stantial concerns over a bevy of barriers to investsoft power remains very soft, though the state is
ment and trade. While Google has had its highly
pumping huge resources into trying to improve
publicized frustrations, recently General Electric's
China's global image. Outside of Africa, China's
CEO Jeff Immelt accused China of being increasinternational image remains mixed at best and
very negative in some regions (such as Europe).
ingly hostile to foreign multinationals: "I really
worry about China," he said on July 1 in Rome. "I
China's global strategy is heavily influenced by
am not sure that in the end they want any of us to
its domestic development needs. Hence its preocwin, or any of us to be successful."
cupation with acquiring steady and secure supplies of energy and raw materials. The result is a
While foreign businesses cannot afford to pull
out of China, some are beginning to do their own
largely resource- and commercially-driven foreign
"rebalancing"-lowering their relative investment
policy. Beijing generally seeks to avoid foreign
entanglements, while assertively protecting its four
exposure and production dependency on China
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schoolers have four hours of homework per evening and face a never-ending battery of examinations. The real long-run competition with China
is already taking place in the secondary school
classroom, and China is winning.
Third, the US government needs to work out effective strategies and tactics to deal with China's stateled development juggernaut. This is best done in
tandem with other nations and within international
institutions, since most of the problems affecting us
business affect all foreign companies and governments. Bargaining power is enhanced collectively,
and China should be held to the established rules
of the international system. Tough problems sometimes require tough responses, and the United States
should not shy away from mixing economic sticks
with carrots to achieve greater openness and competitiveness in the Chinese economy.
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