Socialist Worker

China’s complex problem for George Bush

Issue No. 2094

The Chinese crackdown in Tibet has raised the pitch of criticism of China’s government in the US. Calls for a boycott of the Olympics, originally in protest at China’s support for the Sudanese regime, are gaining strength.

Last week Nancy Pelosi, the Democratic speaker of the US House of Representatives, added to the pressure on George Bush by visiting the Dalai Lama, Tibet’s exiled leader, in northern India.

But while the White House has condemned the repression in Tibet, Bush himself has remained silent, apart from acknowledging that the US and China have “a complex relationship”.

The US is the most important single market for cheap manufactured goods pouring out of Chinese factories. Thanks to these exports China has accumulated foreign reserves worth $1.5 trillion in December last year. China’s rulers lend many of these dollars back to the US, which in turn allows the US to carry on importing Chinese goods.

This circuit between the US and China has kept the world economy growing in the past few years. But the other side of this apparently benign relationship is that China’s headlong economic expansion is giving it the resources to become a regional power, and in the longer run, a world power.

That is why the US perceives China as a threat. The Pentagon’s last four-year review, published in 2006, stated, “Of the major and emerging powers, China has the greatest potential to compete militarily with the US and field disruptive military technologies that could over time offset traditional US military advantages.”

The US Department of Defence is now required by law to submit an annual report to Congress on the “Military Power of the People’s Republic of China”. The latest complains about China modernising its nuclear missile capabilities and testing an anti-satellite weapon in January last year.

These developments worry the US because they threaten its global military supremacy. The Pentagon recently shot down one of its own damaged satellites to reaffirm its objective of dominating space as well as the earth – and to send a signal to the government of China.

This not just a “complex” relationship, but a highly contradictory one. China is workshop and banker to the US, but also the biggest single challenge to its global dominance. And the situation is not static. Various events threaten destabilise it – not least the global financial crisis.


There has been a lot of chatter among economic commentators about “decoupling”. The idea is that even if the US is in recession, the world economy can continue to grow thanks to the dynamism of Brazil, Russia, India, and China, the key “emerging market” economies.

This shows the danger of believing your own propaganda. The US still accounts for a fifth of the world economy. Precisely because of the economic interdependence of the two countries, China is especially vulnerable to a US slowdown.

Moreover, the Chinese economy itself is showing distinct signs of overheating. Inflation has been rising fast, dragged up by the vigour of the boom. Some think China is heading to an economic bust like that at the end of the 1980s, which helped to trigger the Tiananmen Square protests.

The Tibetan crisis is another destabilising event. It looks as if China’s government has been relatively successful in playing the nationalist card – partly by highlighting attacks on ethnic Chinese in Tibet during the recent uprising – to isolate the protests and keep popular opinion on its side.

The growing US campaign for an Olympic boycott is just what Bush doesn’t need. He has promised Hu Jintao, China’s president, that he will attend the Olympics.

“This is China’s coming out party,” an Asia expert told the New York Times. “If he were to cancel, it would be such a loss of face for China that it would make working with them on issues from North Korea to human rights much more difficult.”

So Bush is caught in a vice between the need to keep the relationship with China stable and the growing domestic anti-China lobby. These contradictions can only grow in the future. And they will also confront Bush’s successor.

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Alex Callinicos
Tue 25 Mar 2008, 18:57 GMT
Issue No. 2094
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