China’s WTO admission presents perilous opportunities

Centuries after the most colossal foreign-policy blunder in history – then-dominant China’s 15th century decision to abandon global exploration and isolate itself from the rest of the world – China has taken an historic step toward complete integration into the global economy with its successful World Trade Organization membership petition.

But as with most historic changes, China’s transition from grudgingly accepting foreign trade as a necessary evil to actively opening its market in an effort to pull the nation out of the doldrums of stalled modernization and agrarian poverty will require time and sacrifice. China will go through the upheavals that tore at Europe, the United States and, later, Russia and that continue to shake the foundations of Third World societies. In time, this process will turn China into a dynamic player on the world stage, but the path to that future is perilous and will require the utmost resourcefulness from Chinese entrepreneurs and appropriately restrained leadership from its government and the United States.

China will begin its WTO tenure by eliminating trade protections. This will be particularly disastrous for the nation’s large agricultural regions, which lack the machines and scientific advances to produce food as efficiently as their Western counterparts. Yet this same openness is necessary to produce a business culture in which the prerequisite for success is enterprising resourcefulness, not one’s ability to use guanxi – “connections” – to secure government favor. Fairness and openness, neutral rules and transparent processes, deserve an opportunity to work – just as the Chinese people deserve to participate in that opportunity – after decades of a top-heavy, state-run economy’s failure to transform China’s potential into economic parity with the rest of the world.

At the same time, the tightrope of American East Asian security policy will become even narrower, and the temptation for Washington to step too quickly will grow. An economically developing China is a dependent China, and its greatest dependence still relies on its trade relationship with the United States. Despite protests to the contrary, China has backed down at every point in recent memory when the United States has credibly threatened to curtail the flow of dollars to Beijing.

The opportunity to exploit China’s coming economic vulnerability will not escape American policy-makers, for whom finding Asian homes for American corporations and the U.S. military have been elusive twin goals. The diplomats and strategists should remember, however, that heavy-handed opportunism risks turning Japan, South Korea and the Southeast Asian coalition – to say nothing of an eventually mighty China – against U.S. interests in a region already bracing for conflict.

Through China’s WTO admission, the United States and the People’s Republic have become wary traveling companions on a difficult journey toward either prosperous cooperation or entrenched animosity between two great civilizations.