Two Great Dangers to U.S. – China Relations: Cyber-spying and Unresolved Economic Issues
Kenneth N. Davis, Jr June 19, 2013
Suddenly the news is dominated by disclosure by Edward Snowden that the U.S. National Security Agency (“NSA”) has extensive records of all phone calls by most U.S citizens. At first he was widely praised for informing the public of this intrusion on our personal freedom. But now he’s in Hong Kong and has disclosed that NSA conducts cyber-spying on China, at least on universities and technology centers there. Many are now saying that he’s being traitorous – China is known to spy on us and must be seen as a threat. So, should we act as if we’re at war with China, or should we talk openly to resolve our differences?
Let’s not forget that for many years we’ve also had problems with China on trade and investment policies. Instead of having open two-way dealings with the U.S., China has adopted practices that increase jobs, production and investment in China while decreasing them here. As a result, we’ve lost several million jobs and trillions of dollars in trade deficits. To gain business, many of our companies have had to transfer production and give technology rights to China. In total, we have very weak, one-sided economic relations with China where we’re losing badly.
So, will these two important and very different policy issues lead to even more conflict between the world’s two greatest powers or can they serve as the basis for resolving differences? Can the urgency of resolving a cyber-spying problem be used to bring needed attention to the ongoing trade and investment inequities?
We often talk about political “grand bargains” here in the U.S. The results haven’t been great so far, but it seems right that there are times when competing parties will negotiate seriously when there’s more at stake. It would seem that both the U.S. and China have much to gain by resolving what has become almost a silent war between the two countries. Certainly stopping an escalation of cyber-spying is something both countries should want. And that may be enough to get serious attention on our current unbalanced trade and investment status. The U.S. should insist that both issues be “on the table” while we have their attention.
In closing, I’ll add that I think Mr. Snowden can still do much good for both the U.S. and China if he’s not forced to side with either country. He may be the Whistleblower that both countries have needed to stop the escalation toward disastrous open conflict between the two powers.
Mr. Davis is a former U.S. Assistant Secretary of Commerce, and also a former IBM Corp. VP and Chief Financial Officer.