By Shen Dingli
The decision by the Obama administration to impose heavy import tariffs on Chinese tires revealed the contradiction in games among different nations amid globalization.
For a long time, people have been singing praises to globalization. Indeed, productivity factors flew among different countries in order to seek the best resource combination under globalization. The confrontation between capitalist and socialist camps after World War II, however, not only hindered large-scale worldwide economic cooperation, but also deepened the ideological confrontation between them, which was in the interest of none.
The post-Cold War era saw the surge of a new round of globalization. China, with the world's largest population, became a more and more attractive destination for foreign investment as it boasts a large and cheap labor force, which is its main advantage. In seeking higher profit, the surplus capital in developed countries were flowing to underdeveloped countries, such as China, forming an unprecedented transnational integration of capital and labor. In this regard, the economic globalization can undoubtedly play a positive role in mitigating traditional world political barriers, enhancing cooperation and improving international relations.
China is one beneficiary of the economic globalization process, during which more jobs are provided for its people and more fiscal taxes brought to its government in addition to social stability and national development, which have enhanced the governing Party's performance. For the developed countries such as the US, importing large quantities of cheap but good-quality Chinese products lowered the living cost of its people, especially those middle- and low-income groups. Furthermore, the US investors, who benefited from the Chinese market, become a positive driving force for stabilizing Sino-US economic and trade ties.
Although globalization seems irreversible, not every country can really benefit from it, and neither can every group in the beneficiary countries benefit. It is obvious that the large-scale economic development, since China adopted the policy of reform and opening-up, has imposed some serious threat to its domestic environmental and ecological protection. The degree of environmental destruction in the past three decades has surpassed the total damage in the past few hundred years. China's over-emphasis on improving the investment environment and negligence in the matter of requiring investors to be heedful of environmental protection should be blamed for the destruction. The responsibility is to be assumed by the manufacturing country the investors are stationed in and directly harm the local people's environment and health. The outcome is beyond the objectives of our reform and opening-up policy and engaging in international cooperation. In the early stage of reform and opening-up, China could not impose its own high environmental standards on producers as Western countries did, because the country not only had to compete with developed countries in prices for the same kind of products, but also had to compete with other underdeveloped countries in labor cost in the age of globalization.
Indeed, the large amount of Chinese products in the US supermarkets increased the purchasing power of American medium- and low-income groups and improved their living quality. But in this case, both China and the US could not get a complete win-win result. While enjoying cheap products, the US must bear the cost of relative recession of the same-type products. The benefit brought by improving the purchasing power means nothing to the jobless because it is employment - rather than commodity prices - that is the key source of living security for the ordinary US people.
There are many complicated conflicts in the Sino-US economic linkage, which is traditionally seen as a binder of bilateral ties. While a lot of people benefit from Sino-US economic and trade cooperation, some suffered. Even if there was no sluggishness in import demand in the US caused by the financial crisis, China's ever-increasing export to the US could mean less quotas left for other developing countries, which in turn makes it hard for the latter to agree that China's development will bring them more opportunities.
Within the complicated context of Sino-US relationship, instead of accusing each other and arbitrarily imposing trade sanction and counter measures, the two parties should try to see each other's viewpoint and maintain bilateral relations in the spirit of criticism and self-criticism. With the launch of Sino-US Strategic and Economic Dialog, the two countries are trying to respect and take care of their respective core national interest, including each other's domestic employment rate. Therefore, when the US government decided to levy heavy tariff on tire imports from China for raising its own employment rate in tire industry, it should actively take Chinese tire workers' job opportunities into consideration. As Chinese manufacturers continually expand tire export to the US, they also should consider the relevant economic and political impact to ease the anxiety of their American peers.
As long as China and the US have consideration for each other, their disputes on trade and in other fields will not escalate but can be successfully dissolved. As the biggest economy in the world, the US undertakes more responsibility and competence to assist developing countries. The nature and reality of China's socialism necessitate the pursuit of happiness for people in the world. The two parties should put more emphasis on cooperation and mutual benefit and recognize the principle of settling their disputes through dialog and cooperation.
The author is a professor and director of the Center for American Studies at Fudan University.
(China Daily September 15, 2009)
