Get Your Own House In Order

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To say that relations between China and the USA have soured of late is putting it mildly. There are many differences, arguments and difficulties ranging from the Copenhagen aftermath to currency issues to Iranian sanctions to IPR violations to cyber attacks to trade protectionism and so on.

But now, it seems, just to help things along the Obama administration has decided to throw some petrol on the flames.

Specifically:

  • The proposed arms sales to Taiwan valued at 6.4 billion USD
  • The proposed meeting between President Obama and the Dalai Lama

If it was of vital importance that these things had to be done it would be understandable — but it’s not. In which case are they not an indication of an administration that has simply lost its way?

What is the political justification of meeting with the Dalai Lama? Just what is it going to achieve except to sour relations even further? As for the arms sale to Taiwan, China has threatened to hit back with sanctions on American suppliers if it goes ahead. Imagine the effect on a company like Boeing? 6.4 billion USD in arms sales sounds like a lot but compared to the total value of trade between China and the USA it’s nothing.

So what’s going on?

That the meeting with the Dalai Lama will cause trouble is certain just as it did when President George W Bush met him in October 2007 and French President Nicholas Sarkozy in December 2008. After the latter there were widespread demonstrations in China. I actually saw one firsthand outside a French-owned superstore, Carrefour, in Wuhan. I was struck by the strength of feeling against such "meddling" in Chinese affairs. Indeed, I don’t think foreigners have any understanding of just how much resentment and anger this kind of intervention causes.

Down the line, nothing positive will come out of this meeting.

The same can be said for the arms sales to Taiwan.

Here’s some background — usually referred to as the three communiqus.

The first in February 1972:

"The United States formally acknowledged the desire of all Chinese for a unified and undivided China."

The second in January 1979:

" … [T]he United States recognized that the government of the People’s Republic of China was the sole legal government of China. In addition, the United States government declared that it would end formal political relations with the people of Taiwan while preserving economic and cultural ties."

The third in August 1982:

"Both sides … reaffirmed the statements made about the Taiwan issue in the previous communiqué. Although no definitive conclusions were reached on the issue of arms sale to Taiwan, the United States did declare its intent to gradually decrease its sale of arms to Taiwan."

Putting them together they say two main things. First, an acknowledgement that China is a sovereign state and that Taiwan is a province of this state and second, a statement of intent to reduce arms sales to Taiwan.

Twenty eight years later neither is being honoured. How can the USA justify this?

"The United States … is mandated under the 1979 Taiwan Relations Act to aid Taiwan’s self-defense. The law was enacted when Washington switched diplomatic recognition to Beijing from Taipei." Reuters

This is known variously as "covering your back," "giving with one hand and taking with the other," or, better still, "having your cake and eating it!" It provides us with a glimpse into the workings of the mind of that entity known as the "career politician."

What a miserable business politics really is!

But anyway.

When Bush met the Dalai Lama and then initiated the current arms sales the following year there were vociferous protests from China but nothing of great substance. However, as the financial crisis has unfolded it is clear that things have changed dramatically — that the G7 world no longer exists — neither, in reality, does the G20 — what we now inhabit the world of G2. And they better learn to get along with each other for all our sakes. Unfortunately, the present situation is beginning to resemble some kind of strange staring contest. Who’s going to blink first?

China has made the strongest diplomatic representations it can but, so far, to little effect. I don’t believe that sanctions are an idle threat. For China the stakes are high. The meeting with the Dalai Lama will have serious de-stabilizing effects in Tibet down the road and the arms sale will wreck all the bridge-building work which has gone on between Taiwan and the mainland over the last two years.

If the USA goes ahead and China retaliates, both sides lose. It’s a negative sum game.

Maybe, just maybe, someone in the Obama administration will take stock of what is going on at home — of the ongoing economic chaos and social unrest — of the growing secessionist sentiment which was dismissed at first but now seems to be gathering pace. Maybe, just maybe, someone will stop and take a good long hard look at just what is happening in their own back yard instead of meddling, for no good reason or effect, in the internal affairs of other countries.

On current trends it’s the USA which is in the greater danger of falling apart — not China.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

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