Congress will fail to block Clinton’s extension of China’s MFN status, but not before a lot of Republicans, unable to defeat the National Endowment for the Arts, have the alternative fun of seeming fierce about China. And not before organized labor and other protectionists mask their avarice as altruism in the service of universal rights. Defending MFN, large U.S. corporations will suggest that the anticipated returns on their investments in China are less important to them than the liberalizing effects their economic activity will have on China.
However, intelligence, sincerity and plausibility can be found on both sides of the MFN debate. Unfortunately, the side that may have the most admirable motives - the side favoring denial as a protest of human rights violations and other barbarities - does not have the most plausible arguments.
Opponents of MFN rightly and usefully insist that China’s behavior - political repression; sales of ballistic missiles, chemical weapons and technology useful for weapons of mass destruction; piracy of intellectual property; illiberal trade policies - is bad and not getting noticeably better as a result of ““engagement.’’ That is what the Clinton administration calls the monomania - expansion of American commerce - that is its foreign policy.
MFN opponents focusing on human rights violations have the rhetorical high ground on which most Americans enjoy standing. However, one should be skeptical of a foreign policy that makes one feel good. It would be cathartic to express contempt for China’s regime, but catharsis is not a national interest. Even if denial of MFN would, as advocates of denial say, ““isolate’’ China, it is unclear what good that would do, particularly for the Chinese masses and for foreign human rights advocates working in China who would be isolated there. Anyway, how exactly does a U.S. trade regulation ““isolate’’ 21 percent of the world’s population? Exports to the United States contribute only about 3 percent of China’s GDP, so there is more than a trace of hubris in the notion that China’s regime would be shaken by denial of normal access to the American market. (That is all that the misnamed ““most favored’’ status involves.)
Denial of MFN would alter the national origins of the capital and technology flowing into China and the national destinations of goods flowing from China. This clearly would cost America economically, and there is scant reason to believe it would improve China politically. On the other hand, there are reasons for believing that the prerequisites for sustained economic dynamism, including integration into the world trading system, can be conducive to a humane and pacific society. Those prerequisites include a society porous to ideas, urbanization driven by scientifically intensive agriculture, broad dispersal of decisionmaking and dissemination of information, the rule of law and the ethic of promise-keeping through contracts.
Now, in the grasping hands of the self-interested, including corporations clawing for contracts in China, the idea that economics will produce wholesome politics is presented as more than a mere probability. It is economic determinism - Marx in a J. Press suit, pressed into the service of the Fortune 500. An unenthralled Robert Kagan, writing in The New Republic, says, ““To translate this very popular argument back into the original Marx, the political superstructure of dictatorship in China will change when the economic base changes.’’ How comforting it is to banish contingency from history with a theory of benevolent inevitability. Kagan notes that in the 19th century there was similar faith in trade as a tranquilizer of the world of hitherto warring nations. That faith was a casualty of the guns of August 1914.
However, the fact that many people arguing for economic determinism are self-interested does not make them wrong. And Henry Rowen of the Hoover Institution at Stanford is neither economically interested nor naive. He was an architect of the Reagan administration strategy of economic pressure - falling oil prices, restrictions on access to credits and technology - that caused the Soviet system to crack. And he believes that China, unlike Russia, can best be reformed by progress rather than privation.
““When will China become a democracy?’’ Rowen asks. ““The answer is around the year 2015.’’ He argues that there is a high correlation between affluence and openness in societies. (Some exceptions, such as Saudi Arabia and Brunei, became affluent not through entrepreneurial ferment but through simple extraction of a natural bounty.) And he notes that Spain, Portugal, Chile, Argentina, Taiwan and South Korea made the transition to democracy when they had per capita income between $5,000 and $6,000. If China’s current trajectory continues, in 2015 its per capita income will be between $7,000 and $8,000 (in 1995 dollars). Rowen says, ““By the time that China has the world’s largest economy - toward the middle of the next century - it may well have been the world’s largest democracy for several decades.''
Unless China is by then a very rich, and therefore particularly dangerous, despotism. That could be the result if predictions of its inevitable democratization are self-defeating. Kagan notes that if U.S. policymakers in 1979 had presupposed the inevitable collapse of the Soviet Union by 1992, they would not have felt impelled to take the actions that brought about the collapse. Suppose attempts to reform China by enriching it relieve pressure on the regime to tolerate the above-mentioned prerequisites for an open society. Much depends on such suppositions.
