Saturday, June 19, 2004
Sounding alarm on China
Baltimore Sun: In the past year, some large foreign investors were for the first time allowed to enter China's domestic stock market to buy shares of Chinese companies. This includes shares of part of Norinco, China North Industries Group - a transnational conglomerate founded by the People's Liberation Army, that retains strong military ties, that makes everything from baby shoes to missiles, and that has drawn U.S. sanctions for arming Iran.
Given the lack of disclosure in China, foreign investors and technology traders with Norinco and other Chinese companies cannot know if their resources will end up serving China's long-term, well-coordinated strategic plan to compete with American economic, military and political power. That potential danger is the basis for the very strong alarms sounded this week by the U.S-China Economic and Security Review Commission, a bipartisan congressional group monitoring U.S.-China relations.
In its wide-ranging annual report, the commission warns that rapidly increasing trade, investment and technology flows between the two nations are far too lopsided in China's favor - eroding U.S. economic strength, abetting China's military build-up and its development as a high-tech manufacturing platform, and potentially threatening U.S. security interests. Worse, the commission found that the U.S. government often is far too blind to these hazards in arguably its most important long-term relationship.
The report will be criticized by some for demonizing Beijing just as the West is penetrating Chinese markets and succeeding in dramatically drawing China into the community of nations. But in general, the case for "urgent attention and course corrections" to U.S. policies on China is well made.
The lengthy report paints a picture of China leveraging the short-term financial ambitions of diverse U.S. interests to capture money and technology vital to its highly focused, long-term goal of trumping the United States - and of the U.S. government at best adrift in monitoring and managing its side of this imbalanced and critically important relationship. It's a caution worth the highest attention.