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"Canada can, within a positive friendly atmosphere, ask the Chinese government to resolve the Tibetan situation."

The reality of the 'China Fantasy'

June 18, 2010

Foreign Policy Blog
Posted By Will Inboden
June 16, 2010

Is the "China Fantasy" starting to get deflated
by reality? Three years ago, Jim Mann's
provocative book of that title identified the
"China Fantasy: Why Capitalism Will Not Bring
Democracy to China" as the dogmatic belief of
many Western political and commercial elites that
China's economic liberalization and growth would
lead inevitably to democracy at home and
responsible conduct abroad. The operative word
was "inevitably" -- the assumption being that
China's remarkable economic success would
automatically produce a middle class that
demanded greater political rights, and that
China's growing integration with the global
economy would produce benign and responsible
international behavior. Based on this assumption,
the corollary policy prescription for the West
was to pursue a policy of engagement and encouragement towards China's rise.

This paradigm seems to be shifting. I recently
participated in a conference in Europe on China,
attended by a cross-section of policy, academic,
and commercial leaders from Europe, the United
States, and China, and came away struck by
palpable attitude changes in at least three
dimensions. Taken together, these are signposts
that the previous conventional wisdom on China is coming under question:

* European attitudes. Many of the Europeans
present voiced a pronounced skepticism towards
China, both for the Chinese Communist Party's
ongoing refusal to liberalize the political
system as well as for what they perceive as
China's irresponsible international posture.
Various reasons were suggested for this change in
European attitudes from even two years ago, but
the most salient one seems to be European ire
over China's obstreperous conduct at last year's
Copenhagen climate change conference. If Europe
has a litmus test for international good
citizenship, it is climate change. But China's
behavior on that front seems to be prompting
increased European frustration with China on
other issues as well, including human rights,
Iran's nuclear program, and China's military build-up.

* Business attitudes. American and European
business leaders with extensive China experience
also expressed significant disillusionment. As
one noted, whereas 5 or 10 years ago the business
community was virtually unanimous in its
enthusiasm for the China market and in support of
closer political ties between China and the West,
now the consensus is fractured. Causes for this
disenchantment include widespread corruption,
intellectual property rights violations, the
protectionism of the new "indigenous innovation"
policy, and the general restraints on private
sector flourishing imposed by China's state
capitalism model.  To be sure, many multinational
companies remain profitably invested in what is
still the world's largest emerging market, and
many more are eager to get in. But Google's
recent exit from China may not be the only one,
and some multinationals looking at China are
weighing a new set of cost-benefit analyses.
* Chinese attitudes. If assessments in the West
are changing, so are elite Chinese attitudes.
Most of the Chinese participants were from
universities or think-tanks (i.e. not People's
Liberation Army hard-liners), but even they
displayed a nationalistic confidence and rather
defiant posture towards the West, especially the
United States. At its most benign, this is an
understandable attitude of a proud rising power.
But in too many ways it is not benign, especially
considering that the Chinese participants took
worrisome stances on issues such as human rights,
Taiwan, Tibet, mercantilist nationalism, Iran's
nuclear program, shielding North Korea, and
especially the security "threat" purportedly posed by the United States.

The erosion of the "China fantasy" does not mark
from a precise date, but a watershed moment
ironically may have been the 2008 Beijing
Olympics. Anticipated as China's grand arrival on
the global stage, the Olympics were by many
measures a major success -- and not just for
people named "Michael Phelps." Yet surrounding
the Olympics were constant reminders of Beijing's
authoritarianism, whether the petulant rhetorical
attacks on Tibet supporters, the draconian
efforts at pollution reduction, the omnipresent
surveillance, and the tight control on any voices
of dissent. Put it this way -- as obnoxious are
those %&*!@ vuvuzelas at the World Cup, they are
also the sound of a free society.  You can bet
they would have been banned in Beijing.

The end of the "China fantasy" does not
necessarily prescribe a wholesale shift in the
free world's posture towards China -- just a more
realistic one. For the United States, this has several policy implications:

* Remember that "engagement" doesn't just apply
to the government to government relationship with
Beijing, but also to the people of China. A
forward-looking China policy must include
increased support for the seeds of civil society
in China -- especially young entrepreneurs,
religious leaders, human rights activists,
students and scholars. Much more than the CCP,
they are the best hope for the future of China.
* Keep cultivating our alliance partners in Asia,
and also build ties with emerging powers. Nations
as diverse as Australia, Japan, Vietnam,
Indonesia, South Korea, Singapore, and India have
two things in common: they are wary of China's
aspirations to regional hegemony, and they desire
closer ties with the United States.
* Strengthen our defense capabilities to deter
China's emergence as a viable peer competitor.
The problem with China's military build-up is not
just that it is non-transparent, but that much of
it seems designed specifically to counter
American force projection and capabilities. For
the United States, this means everything from
improved cyber-security, command and control
system protection, and anti-ship missile defense
to, yes, a sufficient F-22 force to preserve air superiority.
* Get our debt under control. Not that the United
States needs yet another reason to tackle its
mind-blowing $13 trillion debt, but the fact that
China owns close to $1 trillion of it is a
further concern. The debate will continue over
whether this debt financing imbalance actually
leaves China or the United States more vulnerable
in the aggregate (see this Dan Drezner article
for a thoughtful analysis), but at a minimum it
is a strategic constraint on the United States.

None of this precludes continued bilateral
cooperation with China on important issues, or
continued support for sound investment in such a
vast market. The "China fantasy" was based more
on hope than experience, but the benefit of
recent experiences with state capitalism is the
chance to replace hope with prudence.
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