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]

(Pix © Larry Catá Backer 2019)

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.

Part 1 and the Introduction to this critical reading of the State Council White Paper may be accessed here.

Part 2 may be accessed HERE.
Part 3 may be accessed HERE.
Part 4 may be accessed HERE.
The State Council White Paper may be accessed HERE (English) (中文版).

(Pix © Larry Catá Backer 2019)

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]

Part 2

CPE Working Group on Empire

1

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 win-win relationship”.

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 of China.

For the White Paper, the only correct global economic order is the economic order provided by the Belt and Road Initiative.

2

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.

3

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 with  laissez-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 the  laissez-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 all  the engine of China’s economic development was started when it became clear  how 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.

4

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 philosophies.

In The Differences Between Comrade Togliatti and Us China 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.

5

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 humanum est...

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.

6

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 that   only 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.

-->