Straight talk for China's future leader
China's Vice President Xi Jinping speaks to leaders from the private and public sectors at a luncheon in Washington (Feb. 15, 2012) Credit: Getty Images
The visit of China's vice president and future leader, Xi Jinping, to the United States this week is a welcome chance for a frank talk about how China can change -- not just to improve its relationship with the United States, but to enhance its own standing in the world.
On trade, China's refusal to allow its currency to appreciate gives it an unfair advantage by making its goods too cheap and ours too expensive. That helps shift jobs from this country to China.
On foreign policy, China has supported Iran and vetoed a UN peace plan that would have laid out a path for Syria's dictator to step down. Closer to home, China would be well advised to tone down the rhetoric toward Taiwan, a dangerous flashpoint in the region, and to let the Tibetans determine the future of Tibet.
China's behavior on intellectual property is also a big problem. China demands transfers of U.S. know-how in exchange for letting American companies sell products in its territory. The sale of pirated American products is rampant in China. And China is the source of massive industrial espionage, often via the Internet.
Finally, China could stand to improve its human rights record by treating industrial workers and dissidents better.
The reality, of course, is that Xi and the rest of the Chinese leadership are unlikely to make any big changes as a result of U.S. carping. China has kept its currency cheap, for example, because it has a national goal of rapid economic development based on exports, a goal it is achieving with its current approach. The self-interest of China or its rulers, however misguided, accounts for many of China's frustrating policies.
We must also face the fact that while trade with China has taken a heavy toll on American workers in industrial areas, economists agree the gains -- cheaper goods and new jobs outside manufacturing -- outweigh the costs. And getting China to change its trade ways may not be a huge help. Much of what we import from China was already being made elsewhere. Indeed, wages in China already are rising, eroding its costs advantage to the point that U.S. manufacturing is showing signs of resurgence. While pressuring China is worthwhile, we can have a bigger economic impact by helping displaced workers adapt, improving our schools, reforming the world's costliest health care and, in the long run, saving more while spending less. That includes reining in federal deficits.
Meanwhile, the challenge for U.S. diplomats is to persuade China that change is very much in its own long-term interest. More balanced trade would give the Chinese a more stable economy and higher standard of living, just as a more cooperative Chinese foreign policy would win it friends everywhere, except perhaps among the world's despots.
Xi represents a new generation of Chinese leaders. If he brings a fresh perspective to the job, he'll see that the nation that would benefit most from such changes would be China.
