I agree with Tom Barnett that economic cooperation with China (if they remain willing) is the best scenario for the future of the United States. He writes in his World Politics Review article “The New Rules: U.S. Needs Chinese Partner in Asia Century” (here):
If the next century is going to be a Pacific Century -- and there is ample evidence of this macro trend -- then America will have to be able to tap into Asia’s great savings pool to finance its long-term economic growth. That savings pool, decades in the making, has seen China cleverly insert itself at the top of an Asian assembly chain that achieved a massive transfer of wealth as part of an enduring trade surplus with America. That transaction, along with the undergirding collective security we provided Asia as external military Leviathan, constituted America’s greatest foreign policy success -- and foreign aid success -- ever, helping to lift hundreds of millions of impoverished Asians into the ranks of an emerging, and even ascendant, global middle class.
That Asia-centric global middle class binds America’s economic future to Asia’s economic present. Our business community understands this intrinsically; our political elite does not.
Jack Welch, former CEO of General Electric, is known for insisting that you can’t succeed as a business in the global economy unless you succeed in China. I would add that you cannot succeed in China unless you’re Chinese. That’s the reality of a rising world power intent on raising its own national corporate champions -- Deng Xiaoping echoing, and updating, Alexander Hamilton.
So how do you square that circle? You get yourself some Chinese partners, as General Motors recently did with Shanghai Automotive Industry Corporation to take on Volkswagen and Tata and Honda in global markets. General Electric is doing the same with China’s AVIC aviation corporation to take on Airbus and Boeing in global markets. And now just this week we receive word of DreamWorks Animation tying up with a Chinese media firm.
By partnering with Chinese firms, these companies are positioning themselves for success as globally integrated enterprises, former IBM CEO Sam Palmisano’s term for the next-generation successor to traditional multinational corporations that still cling to their home nations.
But when it comes to America’s own markets, although we are seeing a great uptick in Chinese foreign direct investment (FDI) into distressed U.S. companies, the baseline is still tiny relative to the money China is investing globally. On an annual basis, we still haven’t cracked the $10 billion mark in terms of Chinese FDI. In contrast, former U.S. Treasury Secretary Lawrence Summers, in concert with leading CEOs of U.S. companies, suggested that America needs something more on the order of $250 billion of Chinese FDI annually for several years to jumpstart our economy.
Sadly, in Oregon, our leadership does not recognize the importance of expanding Mandarin and study abroad in China programs as important components of not only learning to cooperate with the Chinese but in attracting Chinese investment to Oregon. We seem to have a governor clueless about the global economy and a legislature, as Steve Duin wrote “that can't work itself out of a plastic bag.” (here)