Congress and the Obama administration should push for an expansion of U.S. business opportunities in China.
CHINESE President Xi Jinping’s visit this week to Seattle follows a tradition begun in 1979 by Deng Xiaoping; since then, Washington state’s relationship with China has developed beyond recognition.
We’re home to some of the world’s leading companies — such as Boeing, Microsoft, Starbucks and Amazon — and as a major agricultural producer, China has become our largest export customer. Our burgeoning clean-technology industry has much to offer China in addressing its severe environmental challenges. Washington’s companies and institutions and China are partnering in producing breakthroughs in affordable medicines and vaccines. We enjoy extensive sister-city and sister-port relations, and thousands of Chinese students flock to our college campuses. These exchanges create opportunities for partnerships in aerospace, information technology, life sciences and other fields.
Indeed, the world is a far different place today than 1979. Then, China was an impoverished, isolated country aligning strategically with the United States against the Soviet Union and emerging from the nightmare of its Cultural Revolution. From the U.S. perspective, geopolitical issues were paramount. U.S. businesses, on the other hand, imagined a future with a billion new potential consumers. We gave China special status, and trade and other relations grew exponentially. We backed expanded trade and China’s accession to the World Trade Organization despite occasional disputes. Because of that special status, we complained but took little action to counter China’s unfair industrial policies and espionage. Under Xi’s leadership, economic and strategic concerns have increased.
Today, China’s economy is roughly comparable in size to that of the United States and its military power is rapidly growing. Our two countries no longer face a significant common enemy. We have an enormously complex economic relationship with many mutual benefits, but the dollar value of Chinese exports to the United States is four times that of U.S. exports to China. And Washington state’s extraordinary trade with China does not reflect the national bilateral picture. This critical relationship requires a clear understanding on both sides of shared and conflicting interests, and requires from the United States a far more sober diplomacy that protects our interests based on a new strategic framework.
That framework should be one of normal country-to-country relations. Congress and the Obama administration should push for an expansion of U.S. business opportunities in China, in part through the bilateral investment treaty (BIT) now being negotiated.
The U.S. government should strive to better protect U.S. businesses from Chinese attacks on their intellectual property (IP). The U.S. government should contest requirements to share IP in exchange for access to the China market and other policies that give unfair advantages to Chinese businesses and block opportunities for American companies.
Our countries have strikingly different views on the nature and purpose of the Internet and how it should be controlled — or left free. As the Commission on the Theft of American Intellectual Property found two years ago, the great majority of IP theft emanates from China. The commission estimates that Americans and their companies lose more than $300 billion a year to international IP theft, comparable to the current annual level of all U.S. exports to Asia. The cumulative effect is the loss of more than 2 million American jobs.
When our business leaders meet with President Xi, they face agonizing choices. Eager to gain access to opportunities, do they give ground on censorship, privacy and security issues? To what extent do they share technology, expand investment and outsource manufacturing as a quid pro quo for access to this giant economy? There is no easy answer for businesses, which operate successfully by making great products that make money. They can’t be expected to craft foreign policy and will look to the other Washington to make the tough calls, whether taking punitive actions to address trade secret theft or promoting trade through the BIT.
Of course, business interests are not the only ones on the minds of leaders in Washington, D.C. China’s destructive, threatening cyberattacks and aggressive moves in the South China Sea, including land reclamation for building new military bases, must be addressed. We have real differences with China’s government over the importance of basic freedoms and the rule of law — interests shared with the Chinese people.
We are pleased that President Xi continues the tradition of Chinese leaders stopping here. The timing coincides with the need for a new framework for U.S. policy that addresses these challenges effectively and expands cooperation where we can and should.