US & China, Crisis, Collaboration and Contention

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Washington.

And in Washington on Tuesday, President Obama met with Vice President Xi of China. Vice President Xi is expected to be the next leader of the Communist Party of China and leader/president of the government soon. And this is billed as sort of a beginning of a get-to-know-you meeting.

Well, now helping us deconstruct U.S.-China relations and what might be talked about in the future by these two gentlemen is Minqi Li. Min is a associate professor at the University of Utah specializing in political economy, world systems, and the Chinese economy. He was a political prisoner in China from 1990 to 1992. And he's the author of the book After Neoliberalism: Empire, Social Democracy, or Socialism? And he joins us from Salt Lake City. Thanks for joining us, Mi.

MINQI LI, ASSOCIATE PROF. ECONOMICS, UNIV. UTAH: Thank you.

JAY: So, Minqi, talk a little bit about this relationship. It's quite extraordinary, I think, even in terms of historical parallels. You've got China and the U.S. economy so integrated; on the other hand, such serious competition, and United States, you know, complaining about trade imbalances. On the other hand, the United States is so dependent on Chinese labor, and especially so dependent on China buying American Treasury bills and holding so much American debt. Yet the contention at the geopolitical level's getting more serious in Africa, and to some extent in Latin America, and certainly in the Middle East. So talk about this relationship from the Chinese point of view.

LI: Well, Xi Jinping's visit in the U.S. is certainly taking place at a critical moment of global development. So on the one hand, it is now widely recognized that the United States is in this slow declining process in terms of gradually losing its hegemonic power. On the other hand, while China is emerging as a new global power, it is not yet ready to assume global political or economic leadership. And over the past decade also we know that U.S. and China have developed into this kind of comanagement relationship of the global economy, with the U.S. leading the global economy by providing debt-financed consumption, while China would benefit from this U.S. consumption by pursuing export-led growth. But now this model is kind of falling apart as the U.S. suffers from the 2008 to 2009 financial crisis, now still struggling with income stagnation. The European crisis has deepened. And on the other hand, there are questions raised about whether the investment-led boom in China can be continued. So in the future, certainly we will face more economic uncertainty for the current global system.

JAY: Now, in terms of China's role in Africa, Latin America—most recently, China joined Russia vetoing the Syria resolution at the United Nations. We know there's a lot of contention in Pakistan vis-à-vis China, where Pakistan has increasingly—although it has historically, but increasingly closer, more friendly relations with China. There's a big Chinese-financed port in Pakistan. And Pakistan's getting more and more distanced and antagonistic with the United States. So you've got these kind of two parallels going. You have this economic interdependence. But at the sort of geostrategic level, things are actually kind of heating up, are they not?

LI: Well, you know, as Chinese economy grows rapidly, China's own energy and other natural resources are no longer sufficient to sustain China's growth. And as a result, China now needs to import more and the more oil, other forms of energy, as well as raw materials, from Latin America, the Middle East, from Africa. So in that regard, to a large extent China's current foreign policy is guided by economic interest. And China is primarily interested in geopolitical stability so that China could secure its own supply of energy and other resources. But beyond this economic interest, I have a feeling that it's not clear China has developed a coherent global geostrategic policy, and so that China's current policy in different parts of the world may respond to the development of current events and it may respond to the immediate interests, but it's by no means clear they form a coherent whole.

JAY: Well, what do you make of the veto on Syria? China's policy in the past seems to have been, if it isn't a very direct connection to immediate Chinese interest, they kind of stay away. And I think it was Deng Xiaoping's policy, but certainly been China's policy since—you know, don't get into any direct confrontations with the United States unless it's about your own national sovereignty. But the Syria vote seemed to change that.

LI: Well, in that case, of course, Russia is determined to veto it. So I guess China's calculation is that if China also vetoing that, on the one hand, it would show some solidarity with Russia, and on the other hand, it would not undermine its relationship with the West in material terms. And another not very noticed fact is that China has cut its import of oil from Iran by half, and so in that regard China's move is consistent with the Western interests.

JAY: And why is China cooperating in the sanctions with Iran?

LI: That, I think, partly reflects the fact that China has not yet determined, given the complex conditions in Middle East, what particular policy it wants to pursue. So, on the one hand, it does want to have political stability for Middle East, and that is very important for China's own energy supply. On the other hand, it does not really want to antagonize the United States or Europe.

JAY: Now, one of the things that supposedly is going to be talked about between President Obama and Vice President Xi in private is President Obama's supposedly going to raise some issues of human rights and that. And even when the U.S. does talk about human rights, it's about political activists. But as we know from recent coverage, including on The Real News, you know, perhaps the greatest violation of human rights is what's happening to Chinese workers in Chinese plants, working, to a large extent, for American companies. And we don't hear President Obama talking much about Apple or other such cases. But as was pointed out in an interview we did recently about this story, first and foremost one would think responsibility is of the Chinese government to enforce their own laws, which is what doesn't seem to be getting done here. What is happening in China about the issue of workers rights and health and safety and such?

LI: That's very true that Chinese workers' conditions arguably is the biggest human right issue within China. And China for years has depended on exportation of cheap labor as a key way to support China's economic growth. And, of course, indirectly the U.S. corporation have also benefited from that by taking advantage of this system of international division of labor based on China's cheap labor exportation. And then, however, over the past two or three years we start to see more and more workers protest, and the workers have become more encouraged to take collective actions to demand higher wage and better working conditions. And so there are more and more strike waves taking place in China now. So if that continue over the years, it may lead to a different balance of forces between the workers and the capitalists within China.

JAY: And certainly the American corporations, in spite of their kind of greenwashing of this, their interest obviously is to keep having a source of skilled, sophisticated labor and productivity with no rules, essentially, certainly no enforceable rules. Let's move on just to one other issue, the competition for resources between the West, and particularly United States and China, and treaty relationships. For example, I believe in Brazil, China has now taken over as Brazil's number-one trading partner ahead of the United States. And it's true for some other countries in Latin America. It's already true for various countries in Africa. Does this set the two countries on some kind of collision course?

LI: That probably will set the two countries on a course of collision in the long run, although in the short run, because—. By importing this energy and raw materials from the rest of the world, that will provide key supplies to China's manufacturing system, and then China could export manufactured goods to the U.S. market to lower the prices of U.S. consumer goods. So in that regard, in the short run you still have this consistency in the U.S. and the Chinese interest.

JAY: Except that a lot of these markets are also buying Chinese-made products. I mean, so is the United States, so I guess there's nothing unique about that. But are they at all pushing out American-made products? Or do they not so directly compete, because of the type of products they are?

LI: I guess the type of products produced by China and the U.S. are still very different. But in the long run, of course, because China now already accounts for 20 percent of world energy consumption and that share is still growing rapidly while the U.S. share is declining, you do have this question about how long it will take before the U.S. and China run into these conflicts over the resources, although in the last two or three years, because of this shale gas and oil boom within U.S., that might postpone this moment a little bit longer.

JAY: Thanks for joining us, Minqi.
LI: Thank you.

JAY: And thank you for joining us on The Real News Network.