Return to Opinions

My Opinion of the Moment

China, Hong Kong, Britain, trade, and the blind pursuit of profits.

Maybe July just isn't Britain's month. July 4th marked the day some North American colonies declared their independence with words that are one of history's most eloquent and radical assertions of liberty. This past July 1 marked the handover of Hong Kong to a brutal dictatorship. All right, these events are far apart in more than centuries, but their dates are still close together and the events couldn't contrast much more. One set of colonies wrenched itself out of tyranny into freedom, and another colony got tossed into a hole. Couldn't there have been some attempt to give Hong Kong its independence?

Not everyone in Hong Kong is unhappy, and maybe I've overblown the whole thing, but that seems hard to do when six million people just got handed over to the same government, even the same individuals, who pulled off the massacre at Tiananmen Square. This is the same government that has been attempting to destroy Tibetan culture under an occupation that's now about 40 years old. The accusations of slave labor in prisons remain, and there are still news reports of dissidents being arrested, imprisoned, and mistreated. China is a regular recipient of letters written at the behest of Amnesty International. Granted, Britain was no charmer during its colonial administration. Chinese were definitively second class, and right to the end their interests seemed of no interest in London. Still, who wouldn't rather be under Tony Blair, or even John Major, instead of Li Peng?

Why so little protest in Hong Kong? Well, besides the understandable fear of being noticed by a regime such as just took over, the lack of experience with democracy, and the likely preference of many in Hong Kong to be part of China, there are a few families in Hong Kong who control most of the wealth, and they expect to make out just fine under Chinese rule. I guess if you're rich and powerful you have little need for democracy. Don't believe Hong Kong is a plutocracy? Then explain how a "special administrative region" with a per capita income higher than Britain's can be getting by on cheap labor. I've heard (and maybe somebody can point me to a source I can link to) that just 10 families have half the wealth. This is certainly the vaunted "Asian Way", as Lee Kuan Yew of Singapore put it, capitalism without democracy. Maybe China can indeed have one country/two systems, with both systems being oppressive for the people stuck under them.

Lesson Number One: Capitalism does not necessarily bring democracy. That statement doesn't fit American laissez-faire free market ideology, but events in Asia show it to be so.

China is a huge country, and as a consequence is denied the pariah status it deserves. Instead it receives "constructive engagement", which is an excuse to do business with beastly regimes. Enough Americans saw this "constructive engagement" doctrine for what it is during the apartheid regime in South Africa that sanctions were imposed and maintained, and now South Africa has a democratic government which says the sanctions helped bring down the old regime. No such intestinal fortitude is being shown towards China. It gets MFN (Most Favored Nation status) which means the same conditions for trade as countries that don't endanger their neighbors. So what if MFN is renamed something like "normal trade status"? If it was a smaller country it would be recognized for the outlaw regime it is. China gets MFN but Cuba is boycotted? Explain that without being a throwback to Realpolitik.

The truth is American business thinks somehow it will make a pile of money in China, so big deal if we improve the technology of an expansionist dictatorship and provide the funds for their economic growth. We import many times more from China than we export, and almost all American companies' goods sold in China are made there. Of course, today's transnational corporations don't care where they're profits come from or where they go---borders are just cute little lines on maps.

Lesson Number 2: Forget this economic growth stuff. Dealing with a regime like this is benefiting only that regime and a few big corporate stockholders. We're feeding plutocrats on both sides of the Pacific.

Does being big mean sanctions against China can't work? Certainly it would be the biggest country we've ever imposed sanctions against, and no country ever caved in pleading that sanctions be lifted, but there is also no doubt that we've restricted trade with nations we've found threatening or despicable, like South Africa, the Soviet Union, Cuba, Iran, etc., and the sanctions have had effects. The target country held out but didn't prosper, and was limited in its ability to cause trouble for us or their neighbors. No cogent argument can be made that the Soviet Union and South Africa didn't fall in part from bad economies, which sanctions exacerbated.

Lesson Number 3: Curtailing trade with China won't make it democratic, but it will sure slow down their economic and technological growth and restrict China's ability to threaten its neighbors.

The other argument against sanctions when American business stands to make a buck is other countries will use the opportunities we give up. Maybe. Don't people doing something they shouldn't always say someone else would do it anyway? Are they excused? Hey, is America supposed to be some great power, a leader of the free world? Such leadership needs to be exercised. If our leaders won't show such leadership (trade über alles!) then we have to. It's not always possible to avoid Chinese made goods anymore, and it will be harder now that they have Hong Kong, but avoid them we should. Consumers can make their own MFN by what they choose to buy. I don't advocate "Buy American", which is a bad policy for a country that exports as much as we do, but we sure need to have a care about just which countries our products are made in.

Lesson Number 4: Don't buy Chinese made goods.

UPDATE: It's been a few years since I wrote that but none of the oppression has changed. Just to show that, here's a current report on China's still horrid working conditions, and how American companies benefit, from the National Labor Committee. China now has full WTO membership, which means no more annual review of its trade status with the U.S. It looks like the global corporate oligarchy will get its chance to prove it's right.

Return to Opinions

Return to Home