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Domestic concerns, protectionism, global stakes bind the countries

WASHINGTON, DC - 05/17/06 - Relations with China are a top concern for the US and will be for the foreseeable future, according to Deputy Secretary of State Robert Zoellick.

"Aside from dealing with Islamic political radicalism and terrorism, how we deal with China's growing influence is one of the central questions of 21st Century US diplomacy," he recently told the House International Relations Committee.

According to Zoellick, who formerly served as US Trade Representative, US-China relations are operating on two levels: global and domestic.

As the world's major powers, China and the US both are affected by transnational threats such as disease, terrorism and environmental degradation, he said, while on the domestic level, there is "strong US concern" regarding China's performance on human rights, individual freedom and political reform. 

There are concerns on both sides, he said, regarding economics and trade and access to markets.

Zoellick said China is increasing its influence within the international system, and he acknowledged that "China's growing global footprint" is a cause for tensions.

That is offset, he said, by the fact that China's focus is now on pursuing its own economic, political and military strength vis-à-vis other states within the international system rather than promoting communist revolution and ideological struggle from outside it.

He added, however, that China's great economic strides are threatened by corruption that undermines the legitimacy of its leadership.

"Right now China's political legitimacy is not based on democracy, and it's not based on an ideology of communism. It's based on economic performance and nationalism and that has some fragility," Zoellick said, "since much of the population is still poor and millions more jobs are needed." 

According to Chinese government figures alone, "they've had 87,000 incidents of unrest last year, he said. "China's leadership recognizes that it will need to develop a social safety net to forestall unrest and this could have some important economic implications." 

If Beijing actually develops programs to provide for pensions and health care, there will be fewer reasons for people to save, he said, and possibly more reasons for greater consumption, which, in turn, could help with imbalances in trade.

Zoellick discussed the need for China to become a "responsible stakeholder," explaining that "a more influential China has greater capacity than most to help maintain the peaceful, prosperous, and open international system from which it has benefited."

He acknowledged that the word "stakeholder" has no easy translation into Chinese, and as a result, there has been great debate in China about the concept.

"There's not a part of the world market that China doesn't affect," said Zoellick.

Zoellick's statements underscored recent comments on US-China trade made by Secretary of Commerce Carlos Guittierez.

Speaking at a recent press conference at the Washington Foreign Press Center, the Commerce secretary raised the issue of protectionism and Beijing's role in defusing a growing sentiment in the US that China is continuing to restrict its markets to access by US-made goods and services.

This despite the most recent Department of Commerce (DOC) figures showing that last year's $41.8 billion in US goods and services exports to China represented a 157% increase compared with 2000's $16.3 billion.

Over past five years, the DOC said, exports to China grew more than five times as fast as exports to the rest of the world, making the country the US' fourth largest export market after Mexico, Canada, and Japan.

The Bush Administration, he said, "is determined to prevent protectionist sentiments from taking hold in its trade relationship with China."

But to keep US markets open to Chinese products, the US wants to see more progress from China on increasing market access, transparency and greater enforcement of intellectual property rights, Gutierrez said April 18 at a press conference at the Washington Foreign Press Center.

"We know that there's a considerable amount of piracy still in China - whether that be software, whether it be optical disks - and we want our intellectual property rights protected in China," he said. "Give us more access, protect our intellectual property and give us transparency and we will be able to compete fairly in Chinese markets."

Questions about trade and protectionism are coming directly from the American people, he said.

"The American public wants to understand why intellectual property rights are not protected in China; it is important to enable the American public to see progress," Gutierrez said.

As China's "most important customer," the US "hopes China would listen to US concerns," he said, adding, "[We] will continue in a state of engagement, discussion and candid debate."

But, Guittierez was quick to add, Beijing made "some progress" during recent annual trade talks by agreeing to reopen Chinese markets to US beef imports and agreeing to require personal computers sold in China to have preloaded software.

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