More than trade at stake in US-China rift

More than trade at stake in US-China rift

A worker cycles past containers outside a logistics center near Tianjin Port, in northern China. (Reuters)

The US and China have been engaged in a trade dispute and intermittent negotiations since early 2018. According to the media, the main issues of disagreement and discussion are tariffs imposed by each country, the US allegation that China engages in currency manipulation and the general trade imbalance that heavily favors China. However, there are other, extremely serious societal issues that are also critical to the rift between these two powerful countries.
The trade dispute is shaking economies around the world. Stock exchanges are on edge, with share values falling or rising based on US President Donald Trump’s most recent updates on the dispute. The price of oil is particularly susceptible to fluctuations in response to the state of US-China relations. Even central banks are making decisions based on their forecast of the negotiations. There is an overall fear that a continued impasse and an all-out trade war could lead to a global recession. Thus, the headlines go to the economic impact of the on-again, off-again negotiations and the regular retaliations.
However, for the US there is much at stake beyond the health of today’s economy. Through this trade dispute and in these negotiations, the US has the opportunity to push China on three other important issues: The smuggling of the opioid fentanyl from China into the US, corporate espionage and the theft of US intellectual property by China, and Beijing’s violation of human rights. We know that White House negotiators are working on the first two issues, and it is possible that the third is also a consideration in the greater negotiations.

The only country powerful enough to oppose China is the US. As the trade dispute and negotiations continue, we will see if the US government has the fortitude to stand strong against Beijing.

Ellen R. Wald

Fentanyl is an extremely potent synthetic opioid. The US Drug Enforcement Administration (DEA) says that it is between 80 and 100 times more powerful that morphine. About 20,000 Americans die from fentanyl overdoses each year. In 2016, six out of every 100,000 Americans died from fentanyl abuse. Last September, a DEA administrator told Congress about the nexus between China and the illicit fentanyl trade, saying that the “vast majority” of fentanyl in the US originates in China or includes chemical components from China before final production in Mexico or other countries. Drug abuse is destroying hundreds of thousands of American families each year, and fentanyl from China is a big part of that.
China is also notorious for stealing intellectual property (IP) and other corporate secrets. According to CNBC, one in five major American companies surveyed said that China had stolen IP from them in the past year. Nearly one-third of the companies said China stole from them in the past decade. Both Chinese companies and the Beijing government are suspected of such nefarious behavior, but it matters little who does it. In China, the government can control anything. If a Chinese company steals a US company’s secrets, it can be assumed that the Chinese government consents, even if it is not actually complicit. Beijing did publish a document in December outlining punishment for corporate IP thieves, but there are doubts about enforcement. China cannot be a decent partner in any endeavor if it continues to steal America’s hard-earned innovations.
Human rights in China have been repeatedly violated by the government elite since the communist revolution in the late 1940s. The succession of five-year plans and the Great Leap Forward led to the severe oppression of millions of Chinese on economic grounds and based on socialist ideology. Ethnic and religious minorities have been persecuted, including the Uighur Muslims in Xinjiang who are horribly mistreated today. Protests have been viciously suppressed, notably the Tiananmen Square demonstrations 30 years ago and now the Hong Kong protests. Trump has not publicly confirmed whether human rights is a subject of negotiations with China, but many in the US believe it should be. At the least, the US trade delegation should push for the safety of people in Xinjiang and Hong Kong, even if political reforms are unrealistic items of negotiation.
China is a powerful country with the world’s largest military and second-largest economy. It is the biggest market, thanks to its population of almost 1.5 billion people. Few companies or countries will stand up to it. Just this weekend, the Italian label Versace and the US label Coach both apologized to China for producing T-shirts that identified disputed territories as separate from China. Unlike other authoritarian regimes, China is so powerful that it can convince companies and entire countries to comply. While activists regularly convince Western firms and governments to distance themselves from less powerful human rights violators, it seems few are willing to stay away from the power and opportunity of China.
Perhaps the only country powerful enough to oppose China is the US. As the trade dispute and negotiations continue, we will see if the US government has the fortitude to stand strong against Beijing. There is much more at stake than trade alone.

  • Ellen R. Wald, Ph.D. is a historian and author of “Saudi, Inc.” She is the president of Transversal Consulting and also teaches Middle East history and policy at Jacksonville University. Twitter: @EnergzdEconomy
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