Books bashing Beijing lose the plot

You can't solve America's problems by exaggerating China's.
Constance Kong | Aug 28 2012 | comment  



 

There is a strong argument for change in China, with its human rights abuses, political oppression, mercantilist trade policies, and self-serving foreign policy and military buildup. Unfortunately that argument is not made in two recent American books: Death by China: Confronting the Dragon – A Global Call to Action, by Peter Navarro and Greg Autry, and Bowing to Beijing: How Barack Obama is Hastening America’s Decline and Ushering a Century of Chinese Domination, by Brett M. Decker and William C. Triplett II.

While both list China’s crimes against its own people and the rest of the world, they are not likely to convince anyone with an IQ above room temperature that China is in the same league as rogue states like North Korea or Iran.

Because of their hyperbolic language and conspiratorial tone these books fail as serious political analysis. Both seem written for rednecks looking for reasons to blame China for America’s problems. Even Republican presidential candidate Mitt Romney, who has vowed to label China a currency manipulator on his first day in office, is unlikely to take these works seriously. America’s leaders have enough sense to continue its engagement with China. Thank God!

Even though Death by China was written by two professors of business at University of California Irvine, it lacks analytical rigour. It is hardly an advertisement to recruit America’s best and brightest to that campus. They fail to adequately analyse China’s economic policies and base many of their assertions on hearsay and half-truths rather than hard economic and policy data. Navarro and Autry’s invective against American companies moving operations to China (“corporate turncoats”) is hardly the style of highbrow academia.

Navarro and Autry also use outdated information. At one point they discuss restrictive trade policies requiring foreign companies to enter joint ventures with maximum shareholdings of 49 percent. Apart from some very sensitive sectors of the Chinese economy, that is no longer required across the board. Many foreign companies, American included, have established Wholly Owned Foreign Enterprises (WOFEs). This means they have 100 per cent ownership and control. This oversight is a symptomatic of the professors’ shoddy scholarship.

While Death by China makes a valid point about China “pressuring” Western companies to establish research and development centres in China, Navarro and Autry overlook the fact that an increasing number of foreign companies place R&D centres there because it brings them closer to a large and dynamic market. Indeed, favourable rents, tax incentives, and highly qualified scientists and engineers at competitive rates hardly qualify as “pressure”. A final academic failing of the book is that there are too many quotes used without references. This makes it difficult to cross-check sources.

Bowing to Beijing makes no claim to academic sophistication. It is just shoddy work. It quotes too many unnamed sources and it refers to highly placed political or military officials who “should have known better”.

Both books fail to understand the complexity of the problems facing America. They blame political weakness since the end of the Reagan era for the exodus of American business to China, failing to appreciate the economics behind the rise of the BRIC economies.

That’s right, it’s not just China; it’s Brazil and Russia and India and China. Indeed, rising costs in China are now causing foreign companies to adopt a strategy of “China plus one”. They invest in China to be close to the world’s most dynamic market but also in another market to ensure they stay competitive.

Both books look nostalgically back to Ronald Reagan and compare China of 2012 with the Soviet Union of 1984. The epilogue to Death by China by Congressman Dana Rohrabacher, a one-time Reagan speechwriter, assures us that: “if Ronald Reagan were president today, he would stand up to the totalitarians in Beijing as he once did to the Soviets.”

I doubt it. Ronald Reagan would understand the difference between Soviet totalitarianism and Beijing’s “socialism with Chinese characteristics”. Living in China as I have for the past 12 years, I can confidently say that China is authoritarian and sometimes brutal, but it is not totalitarian. China is a work in progress. It has buried the ideological hatchet and is groping its way towards a market economy and some form of democracy.

There are failings and shortcomings aplenty. But the Chinese know that they need to change. Premier Wen Jiabao, no less, recently warned that his country must restructure its economic and political system to allow broader participation -- or risk implosion. If the West wants China to stay on course to becoming a positive influence in world economics and international relations, it needs to continue its engagement with the world’s most populous nation. We should ignore scaremongering China-bashers. Don’t be sucked in by the sensationalist titles of these two books or their polemical rhetoric.

Constance Kong is a Shanghai based business consultant.



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