PETRAS ESSAYS IN ENGLISH

May 2001

U.S. China conflict

James Petras

The resolution of the conflict between China and the U.S. is over much more than the U.S. airpeople and airplane in Chinese possession and the question of a U.S. apology. What is at stake is sovereignty versus hegemony, ideology versus trade, and the old Cold War versus the new Cold War. In the United States, elites are in conflict on how to relate to China; the same is true in China with relation to its policies to the U.S.

The first and foremost issue is the question of sovereignty. China claims 200 nautical miles off its coast as off-limits to spy planes, a practice the U.S. upholds with regard to its coastline. Washington however, claims China has only a 12-mile claim. The U.S. thus admits its spy plane was flying within Chinese claimed airspace—within its 200 mile limits and doing so on a routine basis. It is, of course, unimaginable for the U.S. to tolerate Chinese spy planes 13 miles off the New York, Los Angeles, or Washington coastline. Why does Washington intrude in China's 200-mile limits? It is not for technical reasons—the electronic equipment used for espionage functions equally well from 13 as well as 200 miles. There are two reasons. One is to test China's military readiness, its air force capability, and its level of organization to intercept a potential air attack. The second is to challenge China's hegemony in the South China Sea. Washington's world hegemony is unwilling to recognize China's claims of regional hegemony. Throughout the world, particularly in Europe and Latin America, the U.S. has "colonized" air space, military bases, and naval ports. For example, U.S. airplanes routinely intrude in airspace throughout Latin America via military installations established in those countries. The U.S. spy planes are probing the degree to which it can "colonize" Chinese airspace. The Chinese government and especially its people are not willing to submit to U.S. hegemonic pretension: they do not consider themselves as docile clients.

China's demand for a formal apology thus has a deeper meaning. It signifies that the U.S. treat China as an equal, in the concrete sense that, like the U.S., its 200 mile airspace is inviolate and that China can exercise influence in its proximate region (the South China Sea). Washington's refusal to apologize was a tacit rejection of China's claims, and a reaffirmation of its hegemonic position in the China Sea. Like the "accidental" bombing of the Chinese Embassy, the U.S. was sending a signal to China that U.S. hegemony everywhere is not negotiable.

Within the Bush administration there is a conflict between the ideologues and the traders. The ideologues (led by Cheney and Rumsfeld), backed by the military industrial complex, want a new Cold War. They seek to confront China militarily and ignite a profitable arms race. The traders (led by Colin Powell) are basically those economic elites who have invested over $100 billion and who are involved in the $120 billion trade with China. They believe that the U.S. can "conquer" China via the market and diplomacy over a period of time. The conflict between these two sectors of the Bush administration explains the policy of "threats" and "negotiations." The big problem is that the traders are not willing to accept China's definition of its sovereignty. Instead they offer symbolic/diplomatic concessions, expressing "regret" over the incident, without resolving or even recognizing the underlying substantive claims of Chinese sovereignty over its airspace.

In China, the conflict is between liberals versus nationalist. The liberals (led by the president and foreign minister) have been willing to sacrifice issues of sovereignty in order to deepen the privatization of the Chinese economy, secure foreign investments, and increase trade. The nationalists (mainly the Armed Forces and a minority in the regime) defend sovereignty over liberalization. After the bombing of the Embassy, the liberals were forced to postpone World Trade Organization negotiations; the nationalists are a powerful pressure, pushing for the unification of Taiwan, and they are questioning the further liberalization of the economy in light of growing foreign control.

The spy plane's violation of Chinese air space aided the nationalists as it highlighted the growing encroachment and blatant violations of Chinese sovereignty. In this conflict, the nationalists have the overwhelming support of the Chinese people. Nevertheless, it is likely that the liberals accepted a "symbolic" solution, which ignores the underlying problem of Chinese sovereignty. In these circumstances, the Chinese elite tied to U.S. multi-nationals, cannot openly embrace the Bush solution, without exposing themselves to the wrath of the pro-nationalist majority. The agreement between the U.S. "traders" and the Chinese "liberals" was reached secretly and the full details are still unknown.

A major problem in the secret negotiations now is that the ideologues in the U.S. are still operating with the old Cold War mentality: they act as if China is still a communist country instead of a foreign investors' paradise. They operate with a military confrontational definition of reality, at a time when the U.S.'s imperial allies in Europe and Asia have a market definition of reality, based on conquest via trade and investment. The ideologues operate with a 1950s image of the world in which Washington could unilaterally impose its policies. The influence of the ideologues is evident in the unilateral rejection of the Kyoto Agreement with Europe on the control of green house gases, the Anti-Missile Defense Agreement with Russia, the peace negotiations with North Korea, and now the Chinese claim of influence in the South China Sea. The only problem with the ideologues' return to the past is that the world has changed dramatically in the past half-century.

Europe is no longer beholden to U.S. foreign aid—they are economic competitors with strong social movements, such as the Greens and trade unions, which support Kyoto. Industrial groups in Europe want to deepen their economic ties with China, Korea, and Cuba. Political elites and peace groups reject U.S. missile escalation. Even more significantly, the biggest U.S. multi-nationals increasingly depend on profits from overseas investments. Fifty years ago, less than 10 percent of their profits and sales came from outside the U.S. Today, for the biggest firms, from 25 percent to 50 percent of their earnings come from overseas investment and trade. The ideo- logues attempt to build "fortress America" via unilateral military and economic policy, have isolated the U.S. internationally and divided it internally.

Moreover, with the decline of the stock markets, the economy in recession, unemployment and job insecurity rising and the trade deficit growing, the U.S. public is more concerned with domestic economic policies not overseas military adventures. While the ideologues were trying to whip up chauvinist fervor over the issues of the "captive" spy plane airpeople, the response thus far has been muted.

The ascendancy of the ideo- logues' worldview in the Bush regime would lead to a dangerous situation world-wide. Trade and investment patterns would be disrupted. An arms race would be ignited and resources would be reallocated toward military spending. The Europeans would be forced to take sides, to choose between trade or a costly new Cold War with no commensurate benefits. There would be some positive side effects; war spending and economic recession might re-ignite political and social opposition in the U.S. and Europe. The free market ideology would crumble before the new statism driven by military imperatives.

The ideologues' new Cold War, however, is not sustainable: it would deepen the recession in the U.S. by cutting off vital overseas markets and trade and heighten internal political and social conflicts. As Clausewitz once said, it is impossible to wage war on two fronts and win.

In the end, the "traders" in the Bush administration won out against the ideologues and reached an agreement with the Chinese liberals. The billion dollar economic interests of the U.S. multi- nationals were far more important than the arguments of the ideologues. Likewise in China, the liberals, decided that foreign investment and entrance into the World Trade Organization was more important than sovereignty over airspace. Nevertheless, the underlying issues and adversaries remain and new conflicts will likely re-emerge.