It's time for the West to restrict trade with China and sanction the Chinese Communist leadership

National People's Congress, 2013 (photo by Dong Fang via Wikimedia Commons)

On March 9, 2000, US President Bill Clinton gave a speech on US-China trade relations in which he advocated for the expansion of trade between the two countries and defended his administration's decision to push for China's entry into the World Trade Organization (WTO).

President Clinton's argument in favour of closer trade relations with the People's Republic of China (PRC) was based on two assumptions. First, that increased trade with China would benefit the US economically, and that if the US failed to promote trade, then other countries would benefit from the opportunities that the Chinese market offered. Second, that closer economic ties between the US and the PRC would allow Washington to "pull China in the right direction." 

"Last fall, as all of you know, the United States signed the agreement to bring China into the W.T.O. on terms that will open its market to American products and investments," Mr. Clinton said. "When China concludes similar agreements with other countries, it will join the W.T.O. But [f]or us to benefit from that, we must first grant it permanent normal trading status, the same arrangement we have given to other countries in the W.T.O. Before coming here today, I submitted legislation to Congress to do that, and I again publicly urge Congress to approve it as soon as possible.

"Again, I want to emphasize what has already been said. Congress will not be voting on whether China will join the W.T.O. Congress can only decide whether the United States will share in the economic benefits of China joining the W.T.O. A vote against P.N.T.R. will cost America jobs as our competitors in Europe, Asia and elsewhere capture Chinese markets that we otherwise would have served. Supporting China's entry into the W.T.O., however, is about more than our economic interests; it is clearly in our larger national interest ...

"Through all the changes in China and the changes in our perceptions of China, there has been one constant. We understand that America has a profound stake in what happens in China and how China relates to the rest of the world. That's why, for 30 years, every president, without regard to party, has worked for a China that contributes to the stability of Asia, that is open to the world, that upholds the rule of law at home and abroad ...

"Of course, the path that China takes to the future is a choice China will make. We cannot control that choice; we can only influence it. But we must recognize that we do have complete control over what we do. We can work to pull China in the right direction, or we can turn our backs and almost certainly push it in the wrong direction. The W.T.O. agreement will move China in the right direction. It will advance the goals America has worked for in China for the past three decades."

The ideas expressed by President Clinton were widely shared by an influential section of the political establishment and were circulated by the mainstream media. For instance, that year CNN wrote that "[o]fficials in Washington, as well as [Alan] Greenspan [Chair of the Federal Reserve from 1987 to 2006], hope to [sway] Congress to approve PNTR status, for China -- a move they say would promote economic development for both countries and encourage communist China to foster greater individual rights for its citizens."

Twenty years after the PRC entered the WTO and the US granted it permanent normal trading status, none of the predictions made by President Clinton and supported by the pro-China, pro-corporate, pro-appeasement lobby have come true.

The PRC has been pursuing state-led, neo-mercantilist unfair trade practices that have benefited China's manufacturing sector, while the United States has lost millions of manufacturing jobs.

In 2000, the US had a 83 billion dollar deficit in goods with China. By 2016, the deficit had skyrocketed to nearly 347 billion dollars.

In terms of democracy and human rights, the US has been unable to "pull China in the right direction." Quite the contrary. The PRC has experienced a deterioration of media freedom and civil liberties under the leadership of Xi Jinping. According to a 2019 Freedom House report:

"China’s authoritarian regime has become increasingly repressive in recent years. The ruling Chinese Communist Party (CCP) is tightening its control over the state bureaucracy, the media, online speech, religious groups, universities, businesses, and civil society associations, and it has undermined its own already modest rule-of-law reforms."

Beijing has also become increasingly aggressive on the international stage, using its new-found economic might to blackmail other countries. 

Recently the PRC cancelled a trade visit to Stockholm to retaliate against the Swedish PEN awarding the Tucholsky literary prize to Gui Minhai, a Chinese-born Swedish citizen who was kidnapped from his home in Pattaya, Thailand, and later resurfaced in Chinese detention. The Tucholsky prize is named after the German writer Kurt Tucholsky, who fled Nazi Germany for Sweden.

PRC ambassador to Sweden Gui Congyou told the newspaper Göteborgs-Posten that China would “restrict cultural exchanges and cooperation on the economy and trade” with Sweden.

The PRC still holds in detention Canadian citizens Michael Kovrig and Michael Spavor. In September, Chinese Communist authorities detained US citizens Alyssa Petersen and Jacob Harlan, respectively the director and the owner of an organization providing an English language programme. Prior to their detention the two had written on their 17-year-old Facebook page that "because of increasing political and economic problems between the U.S. and China" they were "no longer able to send teachers to China safely."

The Chinese Communist Party controls all aspects of the PRC state, including the legislative process and the judiciary. 

While the US has not been able to change Communist China, Communist China is gradually changing the US and the West by co-opting its business elites and by presenting itself as an alternative model to liberal democracy. For instance, former New York City mayor and current Democratic presidential candidate Michael Bloomberg has close ties to the PRC, and he has gone so far as to deny that Xi Jinping is a dictator. His news organization Bloomberg News has also been accused in the past of self-censoring in order not to upset the Communist leadership in Beijing.

Because the Chinese Communist government uses access to the Chinese market, subsidies and labour force to its own advantage, companies willing to do business with China often bow to Beijing's pressure. To name just a few examples, former Starbucks CEO Howard Schultz, who had also considered running for president, has close ties to Beijing. Companies like Apple and Microsoft have censored or altered content due to pressure from the Chinese Communist authorities. A number of Western companies have alleged business ties with Chinese companies that used forced labour in concentration camps in China's Xinjiang province. 

In December of last year the Associated Press tracked shipments from a factory where forced labour is deployed to Badger Sportswear, a supplier in Statesville, North Carolina. In May, The Wall Street Journal reported that Adidas AG, Hennes & Mauritz (H&M) AB, Kraft Heinz Co., Coca-Cola Co. and Gap Inc. “are among those at the end of the long, often opaque supply chains that travel through China’s northwest region of Xinjiang,” where residents are “routinely forced into training programs that feed workers to area factories." There have been a number of other cases involving exports of goods made by forced labourers to the West. 

In October, the US Customs and Border Patrol (CBP) issued a detention order against a Chinese apparel company suspected of making its products using forced labor in Xinjiang. The US Department of Commerce further imposed export restrictions on 28 Chinese entities, including regional government agencies, local police and security technology companies, on account of alleged involvement in human rights abuses in Xinjiang. 

In short, the prediction of free traders like Bill Clinton has proved to be a lie. It is a lie, and not just a mistake, because the free trade corporate establishment willingly ignored criticism and popular opposition. 

"[A]s global economic integration, led by multinational companies, gathers momentum, a popular backlash is building," wrote CNN during the 1999 Seattle protests against the WTO. "Protesters aren't against trade, but they want corporation-friendly rules to include social concerns--the environment, labor rights, Third World poverty. And they want it now. More than 775 nongovernment organizations have registered with the WTO, bringing some 2,100 observers. 'The WTO is an octopus with an arm into every little crevice of democracy,' says Lori Wallach, director of Public Citizen's Global Trade Watch lobby. 'It trumps domestic laws and international treaties and imposes one-size-fits-all rules.'"

But it was not just people in the streets who criticized trade deregulation. There is a body of literature from the 1990s that analysed the consequences of the US trade policies and correctly recognized their flaws. For instance, in 1996 Dale Belman and Thea Lee wrote: 

"The U.S. economy has become progressively more open to international trade during the last several decades, with successive rounds of tariff reductions through the General Agreement on Tariffs and Trade (GATT) and the implementation of various regional trade agreements (with Israel, Canada, and Mexico). Since 1973 average real wages in the United States have stagnated or fallen, and since 1980 the gap between the wages of college-educated and non- college-educated workers has widened dramatically. What, if any, connection is there between these two trends? ...

"As will be argued below, the research that supports the view that only technology is to blame is both conceptually and technically flawed. If anything, the preponderance of evidence indicates that increased trade has had a negative effect on wages in manufacturing and has accelerated the decline in employment in this sector. The consequent movement of jobs out of manufacturing and into lower- wage service sectors has also contributed to the declining average real wage in the U.S. economy as a whole.

"In 1960, merchandise exports and imports combined represented 6.7 percent of U.S. gross domestic product (GDP); by 1993, this trade share had more than doubled to 16.5 percent.1 Imports have grown far more dramatically than exports, particularly since the early 1980s. By 1993, the United States had a $132.5 billion merchandise trade deficit. The current account, which takes into account income from abroad and the trade surplus in services, registered a deficit of $103.9 billion in the same year. In contrast, in 1980 the United States had a merchandise trade deficit of only $25.5 billion and a $2.3 billion surplus on the current account" (Dale Belman and Thea M. Lee, International Trade and the Performance of U.S. Labor Markets, in U.S. Trade Policy and Global Growth: New Directions in the International Economy, ed. Robert A. Blecker, 1996, pp. 61-64). 

The doctrine of "free trade" has benefited a handful of corporations and of dictatorial elites. It is an incontrovertible fact - a fact which corporate elites and their funded media, institutions and think tanks will deny in order to keep the public in denial - that the middle class and the poor have not benefited from trade expansion, and that democracy has not been strengthened by it. 

It is important to understand the inextricable linkage between political and economic power. The trade policies of the past few decades have strengthened the CCP, the largest totalitarian state on earth, and have created an oligarchy in the West that puts its own particularistic interests above those of the majority of the population. 

The only way to solve the contradictions inherent to neoliberal trade and foreign policy is to regulate trade, make sure that trade policy is tied to fairness and reciprocity, human rights and labour rights. It is time for the United States, Canada, Australia, New Zealand and European countries to stand up to the CCP, to return to progressive economic policies, boost local manufacturing and labour protections, and by strengthening its middle class create a powerful democratic camp. Appeasement and free trade are the wrong answers to the challenge of authoritarianism and oligarchy. 

Only by imposing sanctions and trade restrictions will the West be able to rebuild its middle class, its democracy, and effectively oppose authoritarian neo-mercantilist regimes.