Clyde Prestowitz on The Voice of America (1/14/05) on China
Voice of America CY Copyright (c) 2005 Federal Information & News Dispatch, Inc.
INTRO: China can make everything from furniture to semi-conductors,
automobiles, advanced rockets and spacecraft. It now dominates East
Asian trade. It has overtaken the United Kingdom as the world's
fifth-largest trading power. It is the world's biggest consumer of
commodities and is the world's number two draw for private capital,
second only to the United States. VOA's Jela de Franceschi takes a
closer look at the global implications of the rise of Mandarin economic
TEXT: Chinese exports have burst onto world markets with surprising
speed and quantity. Even more remarkable is China's ambition to become
a key player in global trade.
China has a distinct policy of developing key pillar industries.
Recently, the Beijing firm Lenovo acquired IBM's personal computer
business. The $1.75 billion acquisition of an American computer
industry icon has turned China overnight into the world's third-largest
The deal is not the first of its kind, says David Lampton, the Director
of the China studies program at the John Hopkins University. The
Chinese are trying to build a brand name not only in computers, but are
buying auto companies abroad and investing in telecommunications
[LAMPTON ACT ONE]
This is a very broad ranging kind of economic expansion that the
Chinese have. On balance, it signals that China is not going to be
content just to make products that other world-renowned brand names put
their labels on. China is moving toward building its own brands and
controlling the production process and the marketing process globally.
Driven by its voracious thirst for resources, China's booming economy is impacting world energy and raw material markets.
In November Beijing signed a natural gas agreement with Teheran worth
$100 billion. What some call the deal of the century includes a large
Chinese investment in Iranian gas production. China has similar
arrangements with oil-producing Sudan and Venezuela.
In Latin America, China struck a $20 billion dollar long-term deal for
imports of mineral and agricultural commodities from several countries,
China is also the driving force behind a new trade agreement among the
10-member Association of Southeast Asian Nations, ASEAN. This could
give access to duty-free goods to half the world's population by the
end of the decade. Some analysts believe the new trade accord could
dwarf the bargaining might of the European Union and NAFTA, the North
America Free Trade Area.
Clyde Prestowitz is president of the Economic Strategy Institute in
Washington and a former U-S trade negotiator in the Reagan
administration. China is redefining the region, he says, through a
combination of economic dynamism and skillful diplomacy.
[ PRESTOWITZ ACT ONE]
China is concluding all kinds of big economic deals, cultural exchanges
with Australia, with countries around the Pacific Asia Basin and Latin
America. The Chinese are pursuing a very active diplomacy, which is
redefining the regional and global balance of power. China is becoming
a major player not only in the Pacific, but also in Latin America and
Africa. What is really interesting about it is that the Chinese are
doing it without flexing their muscles.
Still the rise of Mandarin soft power has raised geopolitical concerns.
China's search for resources has in some instances troubled the United
China's extensive energy arrangements with Iran and Sudan are viewed as
a key obstacle to Washington's calls for UN action against Iran's
nuclear proliferation and Sudan's human rights violations in Darfur.
But according to Mr. Prestowitz , China is a competitor, not a threat to the United States.
[ PRESTOWITZ ACT TWO]
Everybody knows China needs oil. Iran is one of the largest oil
producers and one of the countries that have the largest reserves of
oil in the world. Japan made a deal with Iran over American objections
about six months to a year ago, but nobody criticized Japan as somehow
trying to cook up a hostile strategy against the United States. It is
not a strategic conflict.
For now, China has a vested interest in global stability and a stake in
maintaining the existing world trade regime, acknowledges Mr. Lamport.
[LAMPTON ACT TWO]
China is dependent on a peaceful international system because an
increasing fraction of its resources has to come across open seas,
pipelines and everything else. For decades to come, China's military is
not going to be able to protect the vital resource lines to China.
Therefore, the only alternative China is going to find is developing a
more cooperative framework and hopefully good relations with the U-S.
The U-S and Chinese economies are increasingly interlocked, say
observers, and both risk paying a steep price should their relations
turn less than cooperative.