Wednesday, May 18, 2016

Let China Pay

The United States is militarily and financially overextended.  For decades, U.S. taxpayers have financed a security umbrella over Europe paying 75% or more of NATO’s costs and supplying most of the military personnel.  European members are not paying their fair share.  Instead, they have spent their taxpayers’ money on expanded social programs.  Enjoying U.S. protection, they even have the gall to criticize the U.S. for its harsh market economy, in which individuals lack taxpayer-provided health insurance, free university education, long maternity/paternity leave, long vacations, and so forth.

If Europe does not want to pay for its defense, so be it.  Continued U.S. military protection for Europe only encourages European politicians to disregard their own defense requirements.

Now to China.

U.S. foreign policy should encourage China to overextend itself.  Here are some concrete proposals.

The U.S. does not import much, if any, oil from the Middle East.  China, along with Japan, Korea, and other Asian countries, depends heavily on Gulf oil.  Let China patrol the Gulf, the Indian Ocean, the Straits of Malacca, the East China Sea, and other waters to secure safe passage of oil tankers to Asia.

Let China bear the cost of security for Afghanistan, the Caucasus, and elsewhere in the Western Middle East.  China is concerned about radical Islam infecting its Western provinces.

Each year Chinese military power strengthens.  Each year U.S. military power weakens.  The U.S. can no longer afford to provide a “Pax Americana” over North, East and Southeast Asia.  As it is, the bulk of Asian trade is with China, which will continue to increase.  China will increasingly dominate Asia commercially, socially, and politically.

Let China bear the cost of loans and infrastructure projects in Africa.  They will not recover or earn a return on their investments.  Their loans will not be repaid.  They will be targeted as villains in national elections, blamed for racism, unemployment, and social ills.  They will become the “ugly Chinese” who exploit Africans.

Ditto for Latin America.  Think $50 billion in lost loans to Venezuela, and incomplete infrastructure projects in Brazil and other Latin American countries that will not be completed for years and years.  Let China get blamed by Latin American politicians for their mismanaged economies..

Anywhere a hurricane, health, earthquake or other catastrophe occurs, let China pay half of all rescue and rebuilding costs.

How should the U.S. structure its relations with China?  So long as China adheres to GATT, WTO, and other trade agreements, the U.S. should allow trade to flow freely as it will.  But the U.S. should impose dollar-for-dollar costs on state-owned and/or private Chinese firms when China violates the letter and spirit of these agreements.

If China uses regulations to favor Chinese firms over American firms, (e.g., labeling, quotas, limits on foreign ownership, banning U.S. media, etc.), the U.S. should respond in kind.  For example, the U.S. could limit Chinese ownership to 49% of a U.S. firm, ban CCTV, restrict Chinese newspapers and magazines, close Confucius Institutes in American universities, and so on.  You cheat, you pay.

One way to accomplish this change in strategy is to build facilities in Beijing and Shanghai in which the United Nations, the World Bank, the International Monetary Fund, and other global organizations spend half the year meeting and conducting their business in China.  And let China pay for it.

China will learn, as has Britain, France, and the United States, that money does not buy love and goodwill in Africa, Latin America, and other poor countries around the globe.  In fact, it generally produces the opposite effect.

1 comment :

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