America and China: A Free-Market Manifesto

America and China: A Free-Market Manifesto
By Erika Johnsen
9/8/2011

What I’m about to admit may sound bizarre, but I have to get this off my chest: Joe Biden published a discerning op-ed in The New York Times yesterday, and I am in almost complete agreement with him.

From the very core of my being, I fundamentally reject the notion that prosperity is only for some and not for all. The sort of pessimistic, Malthusian, limited thinking that some must be kept down so that others may be buoyed up is just plain wrong. When it comes to eliminating poverty and degradation, welfare and charity accomplish very little in the long term. If national governments could simply get out of their own people’s way, the fully unleashed power of free markets could nurture the sort of systemic prosperity that is the truest, simplest, most penetrating way to improve the living standards and freedom of people across the globe.

As China stands today, their rise would be a very negative thing indeed. Socialism and communism murder and make slaves of people – inarguable historical examples abound. Their rise would not necessarily be our demise, because as we have seen, jacked-up communist bubbles eventually pop, the only question being how much misery and death will occur in the process. But, if China keeps moving toward the economic liberalization they have slowly been implementing, political liberalization must inevitably follow.

So, even though the Veep immeasurably embarrassed us during his diplomatic trip to China (in not "second-guessing" their one-child policy), I think he came away with the right general idea.

Then, as now, there were concerns about what a growing China meant to America and the world. Some here and in the region see China’s growth as a threat, entertaining visions of a cold-war-style rivalry or great-power confrontation. Some Chinese worry that our aim in the Asia-Pacific is to contain China’s rise.

I reject these views. We are clear-eyed about concerns like China’s growing military abilities and intentions; that is why we are engaging with the Chinese military to understand and shape their thinking.

China’s current communist regime is something that we should work to contain, their military buildup is a concern, and the government’s constant antagonizing of U.S. interests is more than annoying. But China cannot grow its economy without loosening the communist deathgrip it has over its citizens, and that is something we can encourage.

But, I remain convinced that a successful China can make our country more prosperous, not less.

As trade and investment bind us together, we have a stake in each other’s success. On issues from global security to global economic growth, we share common challenges and responsibilities — and we have incentives to work together. …

We often focus on Chinese exports to America, but last year American companies exported more than $100 billion worth of goods and services to China, supporting hundreds of thousands of jobs here. In fact, our exports to China have been growing much faster than our exports to the rest of the world. …

Even as the United States and China cooperate, we also compete. I strongly believe that the United States can and will flourish from this competition.

Economic competition is a force for good. When two parties make their own decisions, trust in the rule of law, and engage in free exchange, both parties are better off. It really is that simple.

First, we need to keep China’s rising economic power in perspective. According to the International Monetary Fund, America’s gross domestic product, almost $15 trillion, is still more than twice as large as China’s; our per-capita G.D.P., above $47,000, is 11 times China’s.

Even with their billion people, China’s GDP is laughable compared to ours. If they want to compete, and they do, they are going to have to alter their methodologies.

We owe our strength to our political and economic system and to the way we educate our children — not merely to accept established orthodoxy but to challenge and improve it. We not only tolerate but celebrate free expression and vigorous debate. The rule of law protects private property, lends predictability to investments, and ensures accountability for poor and wealthy alike. …

America’s strengths are, for now, China’s weaknesses. In China, I argued that for it to make the transition to an innovation economy, it will have to open its system, not least to human rights. Fundamental rights are universal, and China’s people aspire to them. Liberty unlocks a people’s full potential, while its absence breeds unrest. Open and free societies are best at promoting long-term growth, stability, prosperity and innovation.

Bingo, Biden! Today in China, millions of people live in poverty and oppression; forced abortions, sterilizations, sex trafficking, and rape occur on the regular; “unsanctioned” religions that divert loyalty from the state are persecuted; endemic corruption eats away at wealth and social stability; citizens cannot access Facebook or Twitter, and are nefariously thrown in jail or worse for espousing Thomas Jefferson-esque ideas. For China to continue to advance, come hell or high water, it will eventually be forced to transition away from these evils. And everybody will be better off.