The quest to demonize China
- By Dan Steinbock
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E-mail chinausfocus.com, August 20, 2013
Getting steel-tough against China
“Death by China” calls China the biggest threat to global peace since Nazi Germany, urging U.S. business executives “to be like Nucor,” America’s largest steel producer.
Navarro’s anti-China books gave rise to his documentary, “Death by China” (2012). But who funded the documentary? And why?
Before the great recession, Nucor made fortunes. In 1995-2005, its stock price rose from $15 to $20. Thereafter, it almost tripled to $75 in mid-2008, followed by a plunge to less than $34 in February 2009. That year Nucor suffered a loss of $293 million. It was then that its executive chairman Dan DiMicco and Navarro began to co-write op-eds blaming U.S. trade deficits on China’s currency manipulation (Wall Street Journal); decrying China’s “weapon of mass production” (San Francisco Chronicle); and urging Washington to “get tough” with China (Barron’s). DiMicco gave testimony on Chinese currency policy in the Congress. Navarro penned his Death by China.
When Navarro began to develop his documentary, he again turned to Nucor, but wanted the $1 million deal done through Utility Consumers’ Action Network (UCAN), a San Diego non-profit, led by his friend Michael Shames. So UCAN deposited Nucor’s checks to Navarro’s production company. In February 2012, UCAN, Navarro’s production company, Navarro and his wife were subpoenaed to testify before a federal grand jury, which wanted to see all financial records and contractual agreements. The legal mess of the UCAN debacle continues even today.
The combination of industry protectionism and corporate lobbying is a déjà vu of the 1980s, the rise of Japan, and the competitiveness debates. That’s perhaps also why China bashers are in a hurry. With Japan, friction eclipsed as the Japanese moved from exports to investment in America. Today, Chinese capital is going global, though from a very low point (in 2012 China invested $6.5 billion in the U.S., barely 1.5% of that by UK in 2011).
Chinese investment in the U.S. means new capital and jobs, which, in turn, has the potential to defuse much of the current bilateral tension. And that is precisely what China demonizers dislike.
From trade hawks and hard-liners to battle plans
In the U.S., the interest groups that promote greater nationalism in economic relations comprise corporate giants that are not well-prepared for global competition; small and medium-sized manufacturers that cannot cope with competitive imports; and organized labor that has shrunk dramatically. These groups are supported by trade hawks, neoconservatives and their intellectual counterparts, as well as democracy, human rights and religious activists. They also hope to shape the future course of Asia Pacific.
Since 2011, President Obama has advocated U.S. rebalancing in Asia seeking to move 60 percent of U.S. naval fleet to the Asia-Pacific by 2020. In the last elections, neoconservatives persuaded Romney to recommend increasing the number of warships far more than the Navy itself asked for. At the time, Romney’s economic adviser was R. Glenn Hubbard, President Bush’s leading economic adviser and Navarro’s co-author in a 2010 book, which blamed America’s economic ruin on the Obama White House. The rearmament would have cost an astounding $2.1 trillion over the next decade, but it would have supported the neoconservatives’ AirSea Battle Plan to militarize containment in the South China Seas – a doctrine that General James Cartwright, a former vice chair of the Joint Chiefs has criticized for “demonizing China.”
In U.S. history, difficult times have translated to periods of xenophobia, isolationism and protectionism, from the anti-Chinese legislation in the late 19th and early 20th centuries, to the anti-Japanese sentiments in the late 1980s. Demonizing China today is not as virulent as Henry Ford’s International Jew in the 1920s, but it, too, is based on shrewd manipulation of economic data, exploitation of political sentiments, social stereotypes and psychological bias.
Criticism is based on facts, but demonizing also suggests evil culpability. Historically, it has been typical to demonize the enemy in the run-up to war. And yet, only one of ten Americans sees China as an “enemy.” In June, Gallup discovered that more than half of Americans perceive China as friendly, though not an ally. In turn, one of four Americans views China as unfriendly. Accordingly, the strategic goal of China’s demonization is, first, to convert those who already hold negative views on China into a harder line and, over time, to increase negativity among those who see China as potentially friendly.
America’s lingering jobless recovery has hardened views on economic and trade policies. That’s what the messengers of demonization are exploiting, in the quest to mainstream anti-China bias in America.
Dr Dan Steinbock is the research director of international business at the India, China and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China).
This article was first published at Chinausfocus.com To read the original version, please visit http://www.chinausfocus.com/finance-economy/the-quest-to-demonize-china/
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