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Crossing paths: US' past, China's future

By Patrick Mendis (China Daily)
Updated: 2009-09-03 17:09

Shakespeare says in The Tempest: "What's past is prologue". US history seems to source its national and global unity in commercial and trade relations, and China may be following suit. So, will China's "peaceful rise" in the global community be an adaptation of the American model?

Though the US is by definition a union of states, leaders have long disagreed on many issues (the worst resulted in the Civil War during the presidency of Abraham Lincoln). Yet today, the notion of war between states seems absurd at best. How did the US' founding fathers manage to foster lasting unity among the 13 original states that extended to 50?

Under George Washington, the first American administration constituted a team of rivals. Thomas Jefferson, a freedom-loving idealist who inspired people around the world, was Washington's first secretary of state. Realist Alexander Hamilton planned America's future as a mighty commercial, industrial and military power as the first secretary of the treasury.

Both men adapted their intellectual persuasions to give rise eventually to the US' two major political parties - the Democratic and Republican - and twin foreign policy traditions: liberalism and realism.

These intellectual foundations can be linked to two tomes written by Adam Smith, the father of modern economics. The first, relatively unknown work is Theory of Moral Sentiments (1759), in which Smith champions "enlightened self-interest" that includes the interests of the greater community, as well as sympathy for others. This sense of justice and moral reasoning are a necessary condition for social harmony and stability.

The second, well known to Chinese, is the bestselling Wealth of Nations (1776). Smith provides the foundation for capitalism and explains that individuals acting in their self-interests unintentionally generate social benefits through "invisible" market forces that promote market equilibrium and community happiness.

The creative tension that existed between Jefferson and Hamilton, who sided with each of Smith's visions, could have easily disintegrated into violent factionalism were it not for the stabilizing hand of the first US president Washington.

To counter the potential for disunity, Washington often asked the two men to collaborate on projects like drafting the US constitution, which stands as a model of political compromise and cooperation through commercial activity.

In doing so, these founding fathers established a blueprint for the American mission to promote international trade in order to peacefully integrate the global community, just as it did for the 13 original colonies.

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While pushing for China's entry into the World Trade Organization (WTO) in 2000, Bill Clinton, then US president, urged American lawmakers to "support the agreement we negotiated to bring China into the WTO (Because) it will plainly advance the cause of peace in Asia".

Consciously or unconsciously, China seems to have absorbed this lesson. A reported 11 percent of China's $586 billion stimulus package was earmarked for rural economic stability related investment. This amount was later increased to curb unemployment and social unrest, with the promise of more funds if needed for domestic stability and peace.

Internationally, as the free-market promoting Washington Consensus stumbled under the George W. Bush administration, China steadily accumulated "economic capital" through the countervailing Beijing Consensus. Engaging countries with opposing views and conflicts through trade, China has established Sino-centric relationships with key countries like Japan, India, Russia, and those in Africa.

The term "Chipan" can be used to describe reliable commercial amity between two traditional enemies. For most of last year, Sino-Japanese trade increased by double-digit figures to reach more than $266.4 billion for a record 10th straight year, according to Japan's External Trade Organization report, issued in February 2009.

Despite nearly half a century of Sino-Indian acrimony, China and India, or "Chindia", have forged substantial trade relations and begun exploiting their comparative advantages in manufacturing and service sectors. They have forged bilateral investment and trade relations, too, and established commercial links with Iran, Venezuela and Sudan.

Sino-Russian trade relations have developed gradually over the past two decades. China and Russia, or "Chirussia", signed the Good-neighborly Cooperation Treaty in 1996, and their trade volume is expected to have crossed $50 billion last year and to reach $60-$80 billion by 2010.

As the US focused on wars in Afghanistan and Iraq, China peacefully expanded its presence in Africa. All but four of the 53 African heads of state attended the historic Sino-African Cooperation meeting in Beijing in 2006, when China-Africa trade reportedly reached $55.5 billion. On the other hand, the US Department of Defense failed to consult with its African friends to choose a location for its African Command that now operates from Germany.

But the most important trading relationship for China is with America, which has given rise to term "Chimerica". Coined by Niall Ferguson, professor of Harvard University, to describe the relationship between the big saver-creditor-producer (China) and the big spender-debtor-consumer (the US), Chimerica has become the primary driver of the global economy along with other major trading powers.

The US' inspiring history of forging unity from diversity remains the future for the world. Only time will tell if the commercial link joining the consensus in Beijing and Washington is strong enough to overcome differences and promote lasting world peace through international trade - a common human denominator for all nations despite their religion, ethnicity and political persuasions.

The author is the vice-president of Osgood Center for International Studies in Washington and has penned Trade and Peace. This article is drawn from his book with the help of Leah Green, visiting professor at the Graduate University of Chinese Agriculture and Sciences in Beijing.