Can America Quit China? A growing discussion.

• Author: Mastel, Greg

For at least twenty years, many have enthusiastically declared this century to be the Chinese century. In 2001 when China joined the World Trade Organization, many predicted that China would pass the United States to become the economic and political leader of the world--setting the example for others to follow. Of course, much of that rhetoric proved overblown. China will likely soon pass the United States to become the world's largest economy, its 1.4 billion population and even a reduced economic growth rate virtually guarantee that. From almost every other perspective, however, China is anything but a world leader.

Recent moves to crush democratic progress in Hong Kong and new details of Beijing's concentration camps for ethnic and religious minorities in Xinjiang only confirm that it remains a brutal authoritarian power. China's efforts to seize control of the South China Sea, recently renewed military threats toward Taiwan, and ongoing military build-up underline that it is a growing threat to its neighbors and the United States. The Chinese Communist Party's continued emphasis on protectionism and nationalistic industrial policy--as seen in "China 2025"--has proven that it wants to ensure that the fruits of that success are enjoyed to the greatest extent possible by China, not by western companies or its trading partners. China's shameful efforts in regard to the Covid-19 pandemic, including threatening supplies of medical equipment to the United States, have brought overdue focus on the risk of depending on Beijing for critical supplies.

In general, despite the grandiose statements, China's success has been good news for China and bad news for almost everyone else. The long list of examples in which China's emergence has threatened the interests of the United States has led many, including the Trump administration, to raise the question of whether the United States would be better off shifting away from commercial reliance on China.

U.S. ECONOMIC TIES WITH CHINA

Total goods and services trade between the United States and China in 2018 reached almost $740 billion--by far the largest two-way trade between any two countries in history. It is worth noting though that China has enjoyed essentially a three-to-one trade surplus with the United States, which was also the largest trade imbalance between any two countries in world history. Also in 2018, Chinese investment in U.S. securities totaled $1.6 trillion--not the largest foreign...