Nick Smith, January 11, 2004

I write this column from Beijing, China, where I am a member of a congressional delegation participating in an interparliamentary exchange. Where China goes over the next couple decades will have a huge influence on U.S. and world security.

China’s average economic growth for the last 20 years has been close to 9%, the fastest in the world. Some people doubt such rapid growth can be sustained. But the changes and improvements since my first visit in 1982 are astonishing. China has moved from bicycles to automobiles. A richer, more technologically adept China has the resources to build up its military, threaten its neighbors in the region, and project power around the world. On the other hand, maintaining growth will require the government to relinquish some of the controls it has on society, and could eventually begin to loosen the grip of the communist party of the levers of power.

China also has some problems that it must deal with. Despite the growth, China has actually lost a higher percentage of its manufacturing jobs than the U.S. over the last decade due to automation and the closing of state owned companies. The World Trade Organization (WTO), which China joined on December 11, 2001, commits it to significantly reductions in a wide variety of tariff and non-tariff barriers. The bottom line is that several of China’s heavily protected industries such as automobiles and certain agricultural sectors could be negatively affected. China’s labor-intensive industries, especially textiles and apparel, will likely benefit significantly.

Our congressional delegation talked to Chinese officials about the unacceptable balance of trade with the United States buying approximately $110 billion more a year in products than they buy from the U.S. We talked about government subsidies and manipulation of the Chinese currency that makes it easier for them to export products into our country and more expensive for China to buy our products. They expressed some willingness to make a larger effort to buy more U.S. goods in order to maintain our trading relationship. They will have to follow through.

As China’s leaders seem to have lost faith in Marxist ideology, they’ve laid increasing stress on nationalism to justify their authoritarian rule. Over the course of thousands of years of its history, China has generally been the dominant country of Asia. But since the first Opium War in 1840, China has suffered under the weight of stronger Western powers. Britain, France, the United States and other countries established trading colonies in China, made demands on Chinese emperors, and put down revolts against their influence. China’s leaders now promise a return to Chinese glory. For example, Chinese leaders insist on reunification with Taiwan. Obviously, aggressive Chinese moves against Taiwan or other nations in the region could bring us into conflict.

Chinese Premier Wen Jiabao told us that peace and security in the region is now as important to China as trade - a shift from what China said just a few years ago. We will continue to put pressure on China to help with security problems such as North Korea and the war on terrorism, but also our trade relations must be fair. China will look a lot different in the next 10 to 20 years. The question is whether they will move more toward capitalism, rule of law, and democracy; or authoritarianism and aggression. The U.S. and the whole world will be affected by the answer.

Congressman Nick Smith, a Republican, represents Michigan's 7th Congressional District in the U.S. House of Representatives.