Pushing Away from Peace

An Awkward Embrace: The United States and China in the 21st Century
Dan Blumenthal and Phillip Swagel
AEI Press
November, 2012

As the friction between Beijing and Washington simmers, we assume that China bears the heaviest responsibility in the decline of the relationship. Dan Blumenthal and Phillip Swagel of the American Enterprise Institute aren’t buying the easy answer. Instead, they dive into what makes the Sino-American relationship works. What they find is unsettling: two giants locked in an embrace in which neither is comfortable, yet that neither can break.

For the authors, the economic ties hold the key to continued peace, or, by their decline, the cause of war. In an article in The National Interest, Blumenthal and Swagel note:

A dispute that upended this web of trade and financial ties would have serious negative consequences for both nations. For the United States, this would lead to higher prices for everything made in China—which at times feels like nearly everything—and steeper interest rates on debt for business and government. These negative impacts would be felt by every American. For China, the loss of the United States as a major export market would mean weaker growth and slower job creation, and thus undermine political and social stability. This instability is the ruling party’s nightmare and thus the source of leverage for the United States.

Ironically, we are urging China to take steps for its economy that will make it less dependent on foreign direct investment and exports. At the same time, we are finding more reasons, both commercial and economic, to shift the locus of our manufacturing away from China. Finally, with a few notable exceptions, we are making it clear to China that America’s assets are not for sale – at least not to them.

Without realizing it, then, we are weakening the regime of economic and commercial codependency that has been the primary guarantee of peace between the two nations. And we are doing so even as China faces domestic instability, reaches an apogee of military power and diplomatic influence, and is stoking nationalist belligerence.

Blumenthal and Swagel have crafted a poignant portrait of Sino-American interdependence. In the process, they remind us of the danger of proferring simplistic solutions to the challenges that plague this key relationship. The more Washington and Beijing let domestic politics guide international relations, the closer they bring conflict.

Also at Amazon.com.

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