In the wake of the shutdown of the federal government last month, Chinese President and Communist Party General Secretary Xi Jinping took the opportunity to remind the world of the failings of the American political system. Year after year, as China's foreign exchange reserves have piled up, the leaders of the regime have gone to great pains to critique America for its profligacy and political instability, among myriad other failings. China's much heralded rise, and its ambitions to supplant American leadership, reflect not just its growing economic and military power, but the values of frugality, stability and conservatism Chinese leaders eagerly contrast with the chaos and moral decay of the west.
Little is ever said amidst these frequent rebukes of the role that America has played in enabling the resuscitation of the Chinese people, to say nothing of the Chinese Communist Party itself, from the depths of economic calcification reached in the 1970s. Much is made of the success of the market reforms instituted under the leadership of Deng Xiaoping beginning in 1978, and indeed the growth trajectory of China's GDP has been extraordinary. But the success of China's economic transformation could not have happened absent the free trade policies of the United States, and to a lesser extent western Europe, that enabled that growth.
Under American global leadership since the end of World War II, international trade policies have uplifted the Asian continent out of severe poverty. Japan led the way, in the wake of the devastation of WWII, building a manufacturing juggernaut enabled by American business insight and market access. The Japanese model of export driven economic growth and development then became the model for the Asian tiger nations of Singapore, Taiwan, Hong Kong and South Korea, which like Japan have risen from abject poverty a half-century ago to among the highest levels of per capita income in the world.
That was the American half-century. As we opened our markets, our share of global GDP steadily declined. Our trade policies actively supported the rise of Asia out of poverty and the globalization of our leading corporations. That real middle class incomes stagnated at home should have come as no surprise. It was simple economics.
But the Asian Tigers, and even Japan, were relatively small countries, who as trading partners were able to build their domestic economies around export trade with America without destroying the host upon which they fed. Through that economic period, there were unintended consequences that exacerbated the challenges we now face. The combined reinvestment of Asian nation trade surpluses in US dollars--and the similar practice embraced by OPEC nations selling us oil--led to relative stability in the US dollar and enabled steady increases in US borrowing without the increases in US interest rates or declines the value of dollar assets that would otherwise have undermined Asian growth.
But it was trade in goods and services with China and India, respectively, that ultimately showed the limit of the export driven model, as the damage to the US economy and middle class has now become too extreme to ignore. The challenges we now face--underinvestment in infrastructure, chronic deficit spending, and socially debilitating inequality--have conspired to contribute to the fraught domestic politics that President Xi now trumpets as the rationale for the world to turn to China for future leadership. China's gleaming new cityscapes--and the Chinese dream of Xi's rhetoric--are being built not upon the ingenuity of the Chinese system, but instead upon the hollowing out of the American economy.
The policy changes Xi and his colleagues announced this week only draw attention to the depravity that remains central to the Chinese system. Even as there is a rising wealthy population within the Chinese elite and urban cores, economic growth within China remains dependent upon the Foxconn-style factory model that is one step short of a slave economy. The Communist Party social and economic policies continue to drive Chinese peasants from their land while securing billions of dollars in stolen wealth for Party members. Dissent and banned religious practice remains punishable by prison and the Orwellian "re-education" that is to be moderated, but not eliminated, under recently announced Party reforms.
The Party plans to modify the decades old one-child policy is perhaps the most shocking reminder of the starkly immoral nature of Communist Party control over the most intimate aspects of Chinese personal life. Unauthorized pregnancies continue to be aborted by force up until birth, and children found to have been born in violation of the law remain at risk of being "confiscated" by police. The proposed may relax the rules surrounding who is to be allowed more than one child, but does nothing to curtail this most fundamental power of State control over the population.
This week, the US aircraft carrier George Washington arrived in the Philippines from Hawaii. The stories were so familiar from other disasters in recent years. The helicopters arriving over the horizon, coming to the aid of the population devastated by Typhoon Haiyan needing not just food and water, but the most basic help from building and securing aid distribution capacity, to recovering, identifying and burying the dead. The carrier and accompanying ships brought aid, logistics and people trained and capable of responding to the need on the ground.
Nine years ago, in the days following the 2004 tsunami, it was the US carrier Abraham Lincoln and the Navy hospital ship Mercy that steamed from the Persian Gulf to Banda Aceh, that city on the northern tip of Sumatra that had born the brunt of the tsunami and seen tens of thousands of its residents die. Like Banda Aceh, the Philippines are located close to the Chinese mainland--just 700 miles from Hong Kong--yet once again it was an American flotilla that steamed over 5,000 miles to bring critical aid, while the Chinese sat on their hands.
Last month, President Xi trumpeted China's rising essential role in the region at the Asia-Pacific meetings that President Obama chose not to attend due to turmoil in Washington. Yet just a few weeks later, he was nowhere to be seen as the people of the Philippines faced their crisis. The Chinese government committed just $100,000 to the Philippines relief effort after the typhoon struck.
President Xi has a long way to go to build the credibility of China as a modern state to be looked to by the world for leadership. Just the name of its recent meeting, the Third Plenum of the 18th Central Committee of the Communist Party, is a reminder that while much in the world has changed over the past quarter century--from the fall of the Berlin wall to the Arab spring--China remains a throwback the Cold War era. As much as Xi would like to show the world the face of a man whose time in Iowa left him an admirer of American freedoms, the pronouncements from his first plenum are a stark reminder of the deep corruption and cruelty that lie at the heart of the Chinese system, and of the ghosts of Tiananmen that still haunt the Chinese leadership.
But it is the response to Typhoon Haiyan that has demonstrated how far China has to go before it will be embraced as a global leader. Leadership is not just about words at meetings of world leaders, or reserves held bank vaults, but about conduct in the world. It is not about what you do to build up your own country, but what you do to uplift others. President Xi and his colleagues disappeared this week when their neighbors across the water were crying in pain, and their inaction spoke volumes. Because, at the end of the day, leadership is not about ideology or rhetoric, it is about showing up.