By John R. Bolton | Wall Street Journal Asia
Google’s threat to withdraw from China has attracted considerable attention in business circles and the critical but arcane world of cyber warfare. But the unfolding story also has far broader implications for how U.S. businesses approach the Chinese market and for the U.S. government, which has often failed to vigorously assert U.S. political and economic interests. Far from being a retreat, Google’s move may represent an aggressive corporate step forward in insisting on reciprocal fair dealing.
Although there have been prior examples of corporations leaving China, Google’s is the most noteworthy potential precedent because of its global prominence. China’s apparent hacking into Google’s email system also raises broader questions about the country’s inadequate protection of intellectual property and what place the rule of law actually has among Chinese policy-making priorities, political as well as economic. Human rights, freedom of religion and ethnic discontent all cloud China’s reputation as a “responsible stakeholder” in world affairs.
Nonetheless, the lure of China’s market has quieted many complaints by foreign businesses loathe to provoke Beijing or cede such a potentially huge market to competitors, either domestic or foreign. Inevitably, the refrain is that “China will soon be the world’s largest economy,” and firms are simply expected to bite their tongues and plow ahead.
For years, U.S. administrations of both parties have held much the same view. Analysts and “experts” repeatedly advise not to “press too hard” on China on (a) currency manipulation; (b) North Korea’s nuclear-weapons program and proliferation generally; (c) domestic human-rights policy; (d) Tibet; or (e) [fill in the blank] because “China will not be pleased.” Of course, this is a prescription for doing nothing to change undesirable Chinese policies, and indeed implicitly encourages Beijing to continue them.
These widespread strategies of appeasement simply give China what it wants for free. Bringing China appropriately to diplomatic battle on any given issue can hardly be worse than surrendering without a fight, which has occurred all too often in recent years. If fear of retaliation over the immediate issue in dispute—or in a perhaps completely unrelated area—inhibits the U.S. from objecting to unsatisfactory Chinese policies, China will simply proceed to have its way. This analysis is not a criticism of China, which forthrightly does what it can get away with, but of limp-wristed American policy.
Take, for example, China’s massive store of U.S. government debt, the current all-purpose reason not to rouse the slumbering Chinese dragon. China’s holdings should not inhibit Washington from strongly asserting U.S. views, whether on North Korea, human rights or trade. If Beijing actually acts in a way that exacerbates the looming debt problem, it would only be making concrete what we already know, and should already be resolving on our own—which is that our growing public debt is unwise and unsustainable. China already runs its own considerable economic risks as a U.S. creditor. It may be China that is the paper tiger—but how will we know, if we never test it? (Ironically, the U.S. should be delighted that China worries about exploding U.S. government budget deficits and the risks of massive inflation. Too bad the Obama administration doesn’t have Beijing’s acuity, but perhaps China will save us from our own misdirection.)
China’s advocates make a critical mistake trying to justify the country’s aberrant commercial behavior. Businessman Tang Jun, for example, recently questioned Microsoft’s position against piracy of its intellectual property by telling the Washington Post that “in a lot of other countries that can work. But China is a very unique country.” Unique in saying that stealing intellectual property is the norm in China and must be accepted? Hardly an “open for business” sign or the reputation that any country, no matter how large its market, should want.
Supineness only convinces Beijing that a “take it or leave it” approach will work in more and more circumstances. Here, Google’s conduct in the immediate future is critical: If Google can negotiate satisfactory protections for its operations in China and decides to remain, then its hard line will have proven successful. But if Google cannot get essentially what it wants, and nonetheless remains in China, that will be the worst signal of all. Google must remember never to make threats unless the company is fully prepared to carry them out.
The U.S. government and American businesses should do what they naturally do elsewhere: defend their own interests vigorously. Make deals in or with China when they meet the tests of satisfying those interests, not out of generalized fear of retaliation or lack of cooperation from Beijing down the road. In reality, Beijing is more likely to respect a determined interlocutor, business or government, than a weak-willed one. It is incomprehensible that Americans have not appreciated and acted upon this lesson in recent years. Perhaps Google is about to educate us.