6-23-05,9:09am

The “China threat” theory which ceased to beat the drum for a while following the breakout of the war in Iraq shows a trend of making its way back in America recently. Among those who preach the “China threat” theory, some have little knowledge of China’s contemporary development and policies, hence many misunderstandings. However, there are also some people, from the US conservative think tanks, to the CIA and the Pentagon, who, confined by the Cold War mindset, deliberately look for new potential enemies. Therefore, with ulterior motives, they describe China’s modernization as a threat to America. It is the latter that make use of the ignorance of the former and try to misguide the government and the public opinion.

But more and more Americans are no longer willing to be biased or follow blindly after they realized that they have been deceived and misled by the CIA, Pentagon and the public opinion on the question of the Iraq war. They become more dispassionate and more reasonable. The so-called “China threat” theory made up by the cold-war experts and the Hawks met with cold shoulder and denouncement both in America and abroad once it came out. Many experts and scholars conversant with China issues recently joined each other in refuting the “China threat” theory with reason and evidence in their articles. Among them a rather potent one was published on the website of the RAND Corporation. The article “China and Globalization,” is authored by William H. Overholt, who is in charge of the Asia/Pacific policy center of the corporation. After an objective comment on the chaos and weakness of the old China, the article points out that it was because of the weak China, which was incapable of deterring and repelling Japanese invasion, that incurred the US and the world a “horrible price.” For this reason, the world needs a healthy China, the article says. The article continues by highly appraising China’s globalization development in various fields. After citing rafts of figures and facts, the article says “although late, China has much more enthusiasm in joining the global system than Japan”: not only in terms of attracting foreign direct investment (FDI) and free trade but also in terms of education and cultural exchange; not only in terms of seeking foreign technologies and management but also in terms of “adopting the rule of law and advocating competition” etc. Its conclusion is that China has come to believe in globalization more than most third-world countries and many first-world countries.

The article points out that China’s globalization has, directly or indirectly, had a strong impact on other countries.” On the one hand, China’s success encourages other countries to emulate and helps remove the xenophobic mentality in many countries. On the other hand, in face of the bubble burst in technological stock markets and slowing global economic growth, countries like the Republic of Korea and the Philippines found themselves saved from recession by Chinese demand. More importantly, China’s demand provides the stimulus that lifted Japan out of recession.” “It is quite possible that China’s globalization saved us”, it is conducive to helping the global economy stepping out of depression. The author illustrates with many examples how Australia benefited from export to China. Many poor countries also benefited from China’s import growth just when they needed it most.

The benefits to America brought about by China’s development are even more obvious. China becomes America’s vast market. The sales of Coca Cola have created a miracle of exceeding one billion tins; General Motors sold large numbers of Buick in China and reaped considerable profits; Profits of joint ventures and wholly-owned businesses remitted huge amounts of dollars back to America. Lower-price Chinese goods all the more raised American living standards by 5 to 10 percent, and helped reduced America’s inflation rate. At the same time, they averted the risk of rapid rate increase. China’s purchase of US treasury bonds has helped to finance US budget deficit.

Then, has China’s development robbed American workers’ jobs? The author gives a fair judgment: “China gets blamed for much that it does not cause.” “Virtually all job losses have been caused by productivity improvements.” “We don’t know how many jobs have been saved by partial moves to China decreasing the costs of endangered companies.” Haier is now investing in America to manufacture refrigerators. When Lenovo bought IBM’s personal computer business, “it saved jobs in a moribund division.”

In contrast to some fabricated claims of the “China threat” theory, the author’s conclusions are all supported by facts and figures. For example, he wrote that Chinese workers in state-owned enterprises have declined from 110 million at the end of 1995 to 66 million in March 2005. Those who think there has been a simple transfer of US manufacturing jobs to China will be surprised to know that manufacturing jobs in China decreased from over 54 million in 1994 to under 30 million today.

At the end of the article the author writes, in a rather objective way, about the problems and challenges China faces in adjustments and the impact they may have on the world. Referring to China’s national defense modernization, the author believes China has no intension of making a show of its strength. “Theories that China is going to take over the world suffer from flaws.” “We (Americans) do not face a challenge to our way of life.” The author’s conclusion is that in many areas “China is our only effective partner.” “When we have a prosperous economic partner (China) that is success for us, not failure.” “If we welcome China’s prosperity, we maximize the chances of an auspicious outcome.”

After reading the article it is impossible not to be surprised at the author’s profound understanding and incisive analysis of China’s economic globalization process, and not to admire the author’s global strategic insight. What is more commendable is that the author can transcend ideological bias and look at China’s development, changes and their impact with a rational mind and objective attitude. It is fair to say that the article is awakening and disabusing for those who do not quite understand China and those who blindly believed the “China threat” theory in the past.