Larry Catá Backer's comments on current issues in transnational law and policy. These essays focus on the constitution of regulatory communities (political, economic, and religious) as they manage their constituencies and the conflicts between them. The context is globalization. This is an academic field-free zone: expect to travel "without documents" through the sometimes strongly guarded boundaries of international relations, constitutional, international, comparative, and corporate law.
Thursday, June 06, 2019
CPE Working Group on Empire: Part 2--A Critical Reading of China's State Council [国务院] White Paper "China's Position on the China-US Economic and Trade Consultations" [关于中美经贸磋商的中方立场]
This post is the second of a four (4) part series in which the CPE WGE examines the question of paths to empire performed through the choices being made by the U.S. and Chinese leadership cores [领导核心] within the theater of the U.S.-China bilateral trade negations. To that end it critically examines China's State Council [国务院] White Paper, entitled China's Position on the China-US Economic and Trade Consultations; <关于中美经贸磋商的中方立场>; 原中国语言版本.The White Paper was distributed by the State Council Information Office on Sunday 2 June.
For this Part 2, The CPE Working Group on Empire take a broader view. While Part 1 focused on the meaning embedded in the text itself on a paragraph by paragraph basis, Part 2 draws broader insights that suggest the contours and trajectories of China's geo-political strategies in general, and their application to its management of the relationship with the United States more specifically. In the process it suggests the dangers of the current hyper focus on the bilateral trade negotiations that tend to obscure the much greater objectives at stake.
A Critical Reading of China's State Council [国务院] White Paper "China's Position on the China-US Economic and Trade Consultations" [关于中美经贸磋商的中方立场]
CPE Working Group on Empire
The Preface to the White Paper sets out the three main premises of the
argument the three remaining sections of the Paper then develop. Most of these
premises have been already articulated in a series of editorials and
commentaries the People’s Daily and the official news agency Xinhua published
in late May and early June. The White Paper may be read as placing the final
seal on the trade friction with the US, and as setting public controversy
aside. At least for now. And at least from the side of the People’s Republic of
China. The trade negotiation may or may not fail. To the broader goals of the
Belt and Road Initiative, their failure might be more beneficial than their
success. At least, this seems to be an implication of the White Paper.
The premises of the White Paper are however worthy of consideration:
(a) the bilateral relation between the PRC and the US is for the most
part based on trade.
Trade is further qualified, in the rest of the White Paper, as free
trade. The conception of free trade heralded by the White Paper is furthermore
coherent with the ideas of certain early modern thinkers who inspired
neoclassical economic theory.
A relationship where commerce is “the propeller and the ballast” may
include components other than trade, insofar as these componets serve the
broader goal of trade. The argument that trade liberalization would induce a
change in values is well-known. Exactly as other arguments postulating that X
would provoke a change in values, this argument might perhaps have been more
useful to legitimize the changing orientations in the domestic policy towards
China. But, practice has proved how this argument is correct. A change in
values has indeed occurred. China has entered a New Era in the path of Reform
and Opening Up to the Outside World. And the New Era requires new values.
In looking at existing bilateral treaties, one finds out how the place
of honor is occupied by trade, and by investment. Trade therefore becomes the
weapon of choice – from both sides – to compensate perceived imbalances in the
ideal equilibrium of the relationship between great powers.
(b) such a relation – one where trade is “the ballast and the
propeller”, involves not only the interests of Chinese and American people, but
also the prosperity and the stability of “the rest”.
Here the White Paper provides a definition of the interest of the
Chinese people, and presumably also the interest of the people of the United
States. The interest of the Chinese people involves trade. But so does the
interest of the people of the United States. As far as territories other than
the United States and China are concerned, interest is not mentioned. For the
European Union, Africa, Latin America and South East Asia, what might be
important is not the interest of their people, but prosperity and stability. At
least, so does the White Paper seem to imply.
(c) the bilateral relation between the PRC and the US should be read
through the lens of the Belt and Road Initiative
The trade relation between the United States and the People’s Republic
of China is described (or perhaps defined) as “a mutually beneficial and
From the perspective of the White Paper, taking a correct stance on the
US-China relations means seeing this relation as part of the Belt and Road
Initiative. Little matters how the United States has not adhered to the BIR.
The BIR is characterized by inclusiveness (among others). And a grand vision
has sufficient space to accommodate also those who have not embraced the Belt
and Road Initiative. Not as antagonists, but as equals of the People’s Republic
For the White Paper, the only correct global economic order is the
economic order provided by the Belt and Road Initiative.
In Chinese official documents, criticism by
name is hard to find. And when it is found, such criticism carries a specific
meaning. This was one of the rules followed by the older generation of Western
academics. Whether this rule still applies today, and in all circumstances, it
remains to be seen.
Just as there cannot be two suns in the sky…
China’s claim for equality with the United States has been made starting from a position of economic,
technological, and military strength. Facts are never sufficient to make a
credible claim, unless they are supported by a philosophy. China’s claim that
the country is now an equal to the United States rests upon an indigenous
understanding of laissez-faire philosophies, conveyed through the
linguistic codes of the One Belt One Road, and Xi Jinping’s ideology on
Socialism with Chinese Characteristics in the New Era.
No one would disagree that rationality is good and worthwhile.
According to the White Paper, in the matrimony between the US and China, China
is the only party who is behaving rationally, and coherent withlaissez-faire economic philosophies.
But the claim to equality is not only based on rationality. The White
Paper has no doubt portrayed China as the sole legitimate interpreter of laissez-faire economic philosophies.
And it has done so by speaking the language of the Belt and Road (and of
other mechanisms of a transnational governance that is becoming increasingly
centred on China). The United States has been rhetorically encircled on the
terrain of its very own values – free markets. Rhetoric doesn’t need sound
arguments, but the power of persuasion. Persuasion cannot occur in the absence
of a common worldview.
One would expect this worldview to go beyond notions of rationality,
and thelaissez-faire economic
philosophies informed by these notions. One would expect the White Paper to
invoke facts as part of the worldview the US and China should agree too.
Instead, historical records are invoked. Practice – understood as hard facts –
has proved how China has achieved a position of economic, technological and
military strength in an exceptionally short time-span. So it would be only
logical if practice provided the deeper roots of the argument. After allthe engine of China’s economic development
was started when it became clearhow
practice was the sole criterion of truth. That realization came when China had
already disentangled its economy from the Soviet Union. A separation of the
economy of China from the economy of the Soviet Union made China solely
responsible for its own economic development and the well-being of the Chinese
people. The “regional” division of labor that existed within the Communist
Bloc, where national interests were essentially subordinated to the needs of
the Soviet economy, came to an end. China became self-reliant.
Instead, the White Paper invoked history. Historical records confirm
China’s achievements in science and technology. China was the first country to
invent the compass, and to discover gunpowder. Practice, alternatively understood as
facts, has been a powerful motive in inducing the majority of countries in the
world to adhere to the Belt and Road Initiative. In the context of the White
Paper, history may play a different role.
It is not our intention to perform historically accurate comparisons.
But, a key text historians may be useful, 30 years from now, to place the White
Paper in a broader historical perspective is The Differences Between Comrade Togliatti and Us.
Comrade Togliatti does not stand for any person in particular. Palmiro Togliatti held a firm belief that
different paths towards the ultimate goal of social and human evolution were
possible. Togliatti was a Communist, and so he believed that the end of history
was the final abolition of the State, and the creation of a Communist society.
Togliatti, however, also believed that each distinct country could and should
forge its own path towards the final abolition of the State and the realization
of a Communist society. Therefore, to Togliatti different interpretations of
Marxist-Leninist ideology were possible and legitimate.
If this observation is true for Marxism-Leninism, as practice has amply
proved, then it is also true for what has been portrayed as the seeming
opposite of Marxism-Leninism – the evolving body of laissez-faire
In The Differences Between Comrade Togliatti and UsChina offered its own interpretation of Marxism-Leninism.
That interpretation was not compatible with the orthodoxy created by the Soviet
Union. Both the Soviet Union and China, however, shared the same worldview. And
the existence of this common interest allowed the two countries to communicate.
Much later, in early June 2019, the White Paper presents an alternative interpretation
of laissez-faire philosophies. One different from how markets and
regulation are understood in the United States and elsewhere. In interpreting laissez-faire
philosophies according to historical and national circumstances, one needs not
be faithful to academic interpretations of Adam Smith. Or even to engage in a
deep reading of the Wealth of Nations, or to have a philosophically
correct understanding of Adam Smith. This is not how ideologies become popular
and usable. Today as in the 1960s, the key question is whether laissez-faire
philosophies admit of different interpretations by different global powers.
The Differences Between Comrade Togliatti and Us provided an opportunity, for the PRC, to make a claim for equality with
the Soviet Union. With the White Paper, the PRC is claiming equality
with the United States.
The Sino-Soviet split involved a reorientation of the industrial and
supply chains that made the countries of the Warsaw Pact mutually dependent. In
retrospect, that reorientation may have contributed to the dusk of the older
global equilibrium, marking the beginning of a new phase of globalization. Closer
in time to us, the decision to decouple the economy of the United Kingdom from
the economy of the European continent has seen MNCs stockpiling consumer goods in the hope to
avoid future tariffs.
In the meantime, we are witnessing how tariffs are becoming delinked
from modern economic theories of trade, to take on functions beyond the raising
of revenues and the protection of domestic industries.
Here comes the question of whom the White Paper speaks to. The White Paper speaks to the domestic elites of the PRC. Its opening
sections present the main themes that have already appeared in a series of
commentaries published by the People’s Daily, in Chinese.
The White Paper speaks to the United States of America, and it does so
as the construction of the Belt and Road Initiative quietly goes on, admist the usual criticism seeing ‘failures’, ‘resistance’, ‘lack of
blueprints’, and ‘inconsistencies’ throughout Eurasia, Africa, and Latin
America. But, after all, a duty of the press in liberal democratic countries is
to provide a critical view of reality. And that duty remains extremely
important, even in the face of the occasional inaccurate reporting. Errare
Does the White Paper speak to the European Union, to Latin America, to
South-East Asia, and to Africa? The overwhelming
majority of partners in the Belt and Road Initiatives are located in these
continents or areas. Yet, “China and the US are both key links in global
industrial and supply chains”.Any
interpretation that understood the claim that production chains run from China
to the United States as advocating for a bipolar equilibrium would perhaps not
be correct. The White Paper speaks not just to the United States, but to each
one of the more than 150 countries adhering to the Belt and Road Initiative,
and to all those who are willing to listen. But, it does so indirectly, because
the issue at stake is not the relation between China and its one of its
partners along the economic corridors of the emerging order of global trade.
The issue at stake is the reciprocal role of the United States and the People’s
Republic of China.
The final section of the White Paper portrays the remaining countries
of the world as watching – as being spectators in the trade war. Rather than as
participants in the construction of a new global economic order; as countries
that have been indirectly harmed by the reciprocal imposition of tariffs, or
even as potential arbiters in the friction between China and the US.
Having set the rhetorical terrain and developed its argument, the White
Paper can conclude thatonly one
correct choice exist to ease the friction between China and the United States.
The United States (the one that has been portrayed as the irrational,
aggressive and eventually hegemonic side of the China-US partnership) could
cooperate with China in a spirit of win-win,tolerate the emerging normative and power structure of the Belt and Road
Initiative, if not deciding to join it. The White Paper presents the Belt and
Road Initiative as the only viable path to globalization – at least for the
moment, and provided that the separation of China’s economy from the economy of
the US does not produce an entirely different and unforeseeable equilibrium.