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Toasting Hu By: William R. Hawkins
FrontPageMagazine.com | Wednesday, May 03, 2006

In the days following Chinese President Hu Jintao’s visit to the White House, there was little news about the event. Except for the cries of a protester, and a ceremonial glitch or two, nothing seemed to have happened. But that was only from the American perspective. Beijing got want it wanted, which was a chance for Hu to gain equal, public status with President George W. Bush as the leader of a great power, without having to make concessions on any of the issues in contention between the two nations.

On economic issues, China did little more than restate past positions or promise future negotiations on issues. There was nothing in China’s plan to curb the rampant theft of intellectual property that has not been promised time and again over the last decade without effect. Indeed, one of the promises made at the Joint Commission on Commerce and Trade talks held before the summit demonstrated how blatant Chinese behavior has been. Beijing will now start to use legal software in its own government computers rather than pirated copies! Enforcement of this rule in the private sector is even more problematical. Also, the week before the summit China Central Bank stated that it was maintaining its undervalued currency regime, a “reform” policy confirmed by Hu in his post-summit statement on the White House lawn.

On April 14, Zhou Wenzhong, the Chinese ambassador to the United States, claimed that leading up to the summit, “Effective dialogues and coordination were conducted between China and the U.S. on international and regional issues including the nuclear issue of the Korean peninsula, the nuclear issue of Iran, the reconstruction of Iraq, and the United Nations affairs.” On each of these points of alleged coordination, Beijing has taken a position in opposition to the United States. On April 27, the day before Iran missed the UN deadline to stop enriching uranium, Foreign Ministry Spokesman Qin Gang said, “China hopes that parties concerned could all remain calm, exercise restrain and patience, display flexibility, and cease to adopt any move that would worsen the situation, so as to create favorable conditions to resume talks.” China will oppose any action against its Iranian ally, with whom it trades arms and technical assistance for oil. A militant Iran hostile to the United States serves Beijing strategy very well.


One thing Hu wanted, but did not get at the White House, was a formal state dinner. Though the Foreign Ministry continues to claim Hu’s visit was a “state visit” the White House terms it more modestly as a “working visit.” Hu only got a “working lunch” in the East Room April 20. The Chinese president did, however, get the equivalent of a state dinner that night at the luxurious Marriot Wardman Park hotel. The event was jointly hosted by what the Foreign Ministry called “12 friendly organizations” including The U.S.-China Business Council, the National Committee on U.S.-China Relations and the U.S. Chamber of Commerce, in association with the America-China Forum, the Asia Society, the Brookings Institution, the China General Chamber of Commerce – USA, the China Institute in America, the Center for Strategic and International Studies, the Committee of 100, the Council on Foreign Relations and the U.S.-China Policy Foundation  Some 900 people from the two countries attended.


The Chamber of Commerce has long supported Chinese diplomacy, and has even sponsored trips by Beijing’s ambassadors around the United States. The U.S.-China Business Council was, however, the most open about its role in hosting President Hu, even using favored terms of Chinese propaganda in its press release on the dinner. The USCBC used the term “win-win” in its assessment of economic relations, which has become a mainstay of Chinese texts. It reported that the “high turnout for the dinner demonstrates the strength of support for advancing U.S.-China relations through engagement.” The term “engagement” became popular in business and political circles during the Clinton administration, where it served as the code word for appeasement.


Hu Jintao is known to be a disciple of Marxist-Leninist doctrine. He has created a new Marxist Institute in the Chinese Academy of Sciences to indoctrinate new Communist cadres in the founding texts of the party’s ideology. Marxism may have lost ground as an economic system, but Leninism has remained the political orthodoxy in Beijing. The 2005 White Paper “Building a Political Democracy in China” defines its subject thus, “Democratic rule means that the CPC [Communist Party of China] sticks to the principle of ruling the country for the people and relying on the people in its rule, guarantees that the people are the masters of the state, upholds and improves the people's democratic dictatorship and the democratic centralism of the Party and the state.” This is the pure Leninist model of the party as the vanguard of the people.


This is not the case in a truly capitalist society like the United States. According to Lenin in The State and Revolution, “the most powerful, economically dominant class, which, through the medium of the state, becomes also the politically dominant class” is the capitalist class of big business and banking. Lenin agrees with Engels that the wealthy rule first by the "direct corruption of officials" (America); secondly, by means of an "alliance of the government and the Stock Exchange (France and America).” By meeting first with Bill Gates, who hosted a large business dinner in Seattle, before coming to Washington, Hu followed the pattern set by Premier Wen Jiabao during his visit in 2003. Wen went to the New York Stock Exchange, the American Bankers Association and the Chamber of Commerce before he went to the White House. Hu undoubtedly thinks by talking to corporate executives he is talking to the real rulers of America.


One of the more recently created groups hosting the dinner was the U.S.-China Policy Foundation (USCPF). According to its website, it “was founded to ensure the continued improvement of U.S.-China relations. Although other organizations in the United States strive to further the understanding of China, this is the first public educational organization devoted exclusively to the betterment of U.S.-China policy” by overcoming “misunderstandings and misperceptions.” On its board of directors is former ambassador and Clinton era assistant defense secretary Chas W. Freeman. He made the news back in 1995 when he was told by General Xiong Guangkai that China would nuke Los Angeles if the U.S. aided Taiwan against a Chinese invasion. Freeman met with Gen. Xiong again in 2004 on a USCPF junket to China, where the past threat of a nuclear attack was not considered a barrier to better relations.


Another director is James Sasser, a former Democratic Senator appointed as ambassador to Beijing by President Clinton. Sasser told Bloomberg news in 2003, “The Chinese really don't do any lobbying, The heavy lifting is done by the American business community.” Last August, according to the USCPF’s report on one of its forums, “Ambassador Sasser was quick to point out that it is important for the Chinese leaders to address political change at their own pace. It would be far too dangerous to the region if China were to experience a radical shift in political ideology.” Apparently, those corporations which have invested so much in Beijing’s “peaceful development” do not want the Communist Party’s dictatorship to be weakened. The turmoil of democratic reform could be bad for business and require the formation of new political partnerships.


Three U.S. Senators are listed as honorary USCPF advisors. Two are Democrats, Max Baucus and Diane Feinstein. Sen. Feinstein’s husband does a considerable amount of business in China. The third is a liberal Republican, Chuck Hagel who, like most Democrats, has been a critic of the Iraq War and a supporter of amnesty for illegal aliens. The pro-China lobby is a business-left coalition, with both executives and liberals embracing “peaceful development” with the same vain hope with which they once embraced detente and convergence during the Cold War. Fortunately, no Soviet official or fellow traveler thought to call the USSR a big emerging market or a Wall Street rush to Moscow might have kept the Cold War going much longer.


All this unseemly corporate kowtowing to Beijing may not pay off. Consider the testimony before the U.S.-China Economic and Security. Review Commission on April 4 by Usha C. V. Haley, Director of the Global Business Center at the University of New Haven. According to her calculations, profits in China from all sources totaled only $8.2 billion for American firms in 2004. This was not much more than was made in Australia ($7.1 billion) and far less than the $14.3 billion earned in Mexico. Three auto companies and two fast food chains earned a third of the profits made in China. And while Beijing has no particular state interest in fast food, it has targeted the auto industry as a priority for Chinese dominance. When Beijing made a similar move in telecommunications, using subsidized firms and cut-throat pricing, American profits collapsed in that sector.

In her book The Chinese Tao of Business, Haley notes “Chinese philosophy urges nurturing something or someone that serves a purpose; but once they serve that purpose, it advocates ruthlessly discarding or crushing the now useless tool or potentially dangerous individual.” The American business community in China may well meet this fate. If it does, those who crowded into the Marriot dining room may regret the bridges they burned with the American people when they decided to bet on China’s rise to greatness and put the security of the United States at risk.

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William Hawkins is a consultant on international economics and national security issues.

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