PrintJune 6, 2009
China since Tienanmen
On June 4, 1989, the Red Chinese Army surrounded and stormed the pro-democracy demonstrators in Tiananmen Square, killing thousands, and thereby ending China's brief experiment in free speech. Reporter Claudia Rosett was in the square that fateful day, and in a Wall Street Journal piece shares what she saw at Tiananmen. Over the ensuing two decades the relationship between the United States and China grew more intimate than most likely could then be imagined. Britannia may have once ruled the waves, but today a bridge of cargo container ships across the Pacific binds China and America into what historian Niall Ferguson has termed "Chimerica."
The question occurs, however, as to how many in today's China see America as a beacon of hope for the oppressed as it once was for Natan Sharansky, a true human rights activist and former Soviet Gulag resident. Mr. Sharansky found the strength to continue defying his Communist oppressors in the actions and policies of President Reagan, whom he met in 1986 after his release into West Berlin in exchange for two Soviet spies. Over the past twenty years has any American President offered any such succor to the prisoners of Chinese Communism? Or have we only strengthened the Communist oppressors and their grip on the People's Republic? Has our enthusiasm for trade and commerce anesthetized American exceptionalism? Eased the discomfort of contemplating the less comely features of Chinese politics and militarism?
Please understand that China's economic "miracle" is not solely the result of Chinese industriousness -- the efficient laboring of tens of millions of devout workers. There is little doubt that Chinese are intelligent, highly competent and not infrequently lead in pushing back the frontiers of science. However, without the very gracious contribution of, primarily, American capital and technology, as well as the American consumers' love of debt-financed purchases, well, the whole thing may have turned out somewhat less miraculous.
In fact, for about the first twenty-five years of China's industrialization, foreign entities were permitted to own no more than 49% of any venture, joint or otherwise. In 2006, an American company, Cargill, was finally permitted to own 100% of one of its operations in China. Additionally, Chinese partners demanded -- and American companies fell all over themselves acquiescing to such demands -- transfer of all the technology associated with whatever particular product or enterprise was the subject of negotiations.
Sometimes just the sale of a product in China required the transfer of all the specifications and technology associated with whatever was being pitched. This was the case when General Electric wanted to sell some $900 million of steam turbine generators for Chinese power plants. GE willingly turned over all the technology to the Chinese while relying on the rather lame excuse that it wasn't the "most advanced" technology in their commercial arsenal. Such was the standard practice and, more often than not, a requirement for doing business in China. General Motors and Boeing also succumbed to the "gimme" demands of their Chinese industrial partners.
And whatever technology we've been unwilling to donate to China's surge forward and upward, they will buy. Or, if necessary, steal. Commercial or military, it matters not. The saga of China's illicit acquisition and disbursement of American nuclear weapons, satellite and missile technology during the Clinton administration is nicely chronicled in the 1999 Cox Report from the Chairman of the "Select Committee on U.S. National Security and Military/Commercial Concerns with the People's Republic of China." The report unabashedly states that the Chinese are the biggest proliferators of weapons and weapons technology, including nuclear, to the world's nuclear club wannabes and other assorted malcontents. Don't believe it? Well, one example is the atomic bomb blueprints recovered from Libya when Kaddafi abandoned his nuke program after we disposed of that other former nuke-seeker, Saddam Hussein. Kaddafi panicked and said, in effect, "Please, take this stuff. Take it all and let me be." Interestingly enough, the prints were in Chinese. Not sure how much use they could have been to the Colonel as there can't be too many Mandarin savvy nuclear weapons scientist in Libya. You wouldn't think. The State Department asserts that Libya probably got the warhead plans from A.Q. Khan, Pakistan's nuclear progenitor. But if he was original author of the plans, I don't think the blueprints would have been in Chinese. Urdu, maybe.
But fret not, when George W. Bush was elected President -- narrowly, whether or not you think legitimately -- the Chinese did not find themselves stymied in their never ending quest for every bit commercial, military or dual-use technology that they could find a way to get their hands on. One of the few persons to have consistently and diligently chronicled Chinese espionage activities during the Bush II administration is Bill Gertz of the Washington Times. His weekly "Inside the Ring" column is quite literally a must-read for understanding the perverse relationship that exists between the Pentagon and the Chinese Communist military. What has resulted is a one-way information flow whereby the Chinese gladly accept whatever we give them while they offer little in return.
The buddy-buddy process does get interrupted at times when the Chinese decide they want to express their displeasure with us for something we've said or done. This includes refusing permission for the U.S. Navy to fly a repairable reconnaissance aircraft from the Hainan Island field where it had made an emergency landing after colliding with a Chinese fighter over international waters. We were forced to disassemble the plane for transport back to the factory by a Russian An-124 cargo aircraft. The total price for all this, including reassembly, came in at over $10 million. More recently they've had fun harassing and risking collision with an unarmed U.S. Navy surveillance ship in the South China Sea.
So far, at least, the Chinese haven't sunk any U.S. vessels. But there have been a number of serious confrontations in the area since 1970. One was a 1988 floating shooting match at the Johnson Reef in the Spratly Islands where the Chinese and Vietnamese navies clashed. Net result was that China sank several vessels and killed over 70 Vietnamese sailors.
Since the 1999 release of the Cox Report, Chinese nuclear scientists have been barred from our weapons labs for what would seem glaringly obvious reasons. However, President Obama has announced that the practice of letting the Chinese look over our nuclear shoulder will be resumed. This and other steps are being taken in the name of "nonproliferation" though we know the Chinese are the worst of proliferators. This seems not only ludicrously stupid but also totally unproductive since our nuclear scientists are not given secure access to their laboratories. So, we can't blame all the technology-gifting on commercial enterprises. However, you'd think the government would be a little less willing to compromise our secrets since they're not even making any money on these deals, right? But then, as was the case with Clinton, campaign contri . . . perhaps it's better to let that rest.
If you'd like more detail on the variety of national security and trade shenanigans, deceptions and plain-vanilla agreement violations that the Chinese engage in, look no further than the USCC reports to Congress. That is, the U.S. - China Security Review Commission report that has been published annually since 2002. The most recent information available on the subject may be found in hearings held by the USCC on March 24th of this year concerning the subject of "China's Industrial Policy and Its Impact on U.S. Companies, Workers and the American Economy."
If we were only buying athletic shoes, poison pet food, pharmaceuticals and such from the Chinese, it might not be so bad. After all, only 95 Americans died 2008 from those Chinese-manufactured heparin injections. Don't know where the dog and cat count stands. In response to all of which the Chinese tell us it's our problem and not theirs. But then we have to go and buy electronic chips from the Chinese that end up in our military aircraft and learn that they are intentionally defective. Sabotaged, if you will. The chips work okay until signaled and then performance degrades; just when you need them most -- in the heat of battle. Why are we buying military hardware and components from China?
No sense getting too deep into the financial issues. After all, there are still lots of people totally convinced that trade deficits have few if any economic or financial consequences. Free trade is fair trade, right? And so, everyone keeps hollering about the dangers of protectionism. However, Mr. Buffet takes exception to the notion of no-consequence gargantuan trade deficits. And, given his track record, it would seem that there is a good deal of substance to support his analysis. The Sage of Omaha's plan includes a scheme for balancing America's foreign trade without tariffs, that is, a non-protectionist approach. Guess the U.S. owing the rest of the planet $7,000,000,000,000 plus or minus a few hundred-billion matters after all.
If reading this hasn't upset you, please, please spend a few hours reading at least some of the Cox and USCC reports, if nothing else. When it comes to our relationship with China, the only action I seem able to muster is shaking my head. Shaking it in wonderment as to why for the past thirty years our business leaders and politicians, Republican and Democrat alike, as well as the American consumer, have been eagerly paying the Chinese (as well as the Saudis) to take the country off our hands. We didn't do that with the Soviets. Why the Chinese?
I think you know the answer. Lenin did. I bet Sharansky does. And so do the spirits of those freedom-loving Chinese who, twenty years ago, were barbarically condemned to haunt Tiananmen. Hopefully not forever.
