Connecting the Dots

There are three stories buried in today’s news which when taken together offer front-page worthy insight on America’s relationship with China.

There was a manufacturing story when Boeing announced the sale of six 777s to China’s largest airline. There was a political story when Google revealed Chinese hackers stole e-mail passwords belonging to U.S. government officials and political activists. And there was an economic story when sluggish growth numbers spooked the worst day on Wall Street in nearly a year.

The remarkable thing about the three stories is they have almost nothing in common and yet they speak volumes about the impact of China’s rise on America.

Boeing’s sale of more aircraft to China is yet another example of the double-edged sword American companies face when doing business in China. While details of such transactions are rarely disclosed, American companies routinely hand over advanced technology to Chinese manufacturers in exchange for such sales.

“In 20 years the American airline industry could be finished because of it’s cooperation with China,” Professor Shen Dingli told me at Shanghai’s Fudan University. “Because when you cooperate China gets technology.”

It was the stacked deck of doing business in China that contributed to Google’s decision to pull out last year but yesterday we learned their troubles with Beijing continue. The group who stole all those Gmail passwords isn’t likely to be linked to the Chinese government because China’s army of nationalistic hackers isn’t part of the government, though they are widely believed to be organized by some of the same government officials who police China’s internet for excessively free speech.

There was a time when China’s authoritarian streak was rebuked by America, most notably 22 years ago this week, when in response to the Tiananmen Square crackdown America stood up for its principles and side-by-side with the Chinese people.

But the third story from yesterday helps explain why that time has probably passed.

While attributing cause and effect to today’s stock market is a fool’s game, yesterday’s sell off was largely seen as a response to bad economic numbers, including a manufacturing slowdown both here and in China. The interconnectedness of America and China’s economies make bold American action–be it economic or political–increasingly difficult.

And there’s one more way these stories link: A common strategy for emerging from deficits and economic difficulty is to sell assets. And so while technological superiority may be America’s strong suit we understand why companies like Boeing feel compelled to trade off our nations great resource to help their bottom line; we understand that while America’s democratic values may be an asset, the distastefulness of surveilled and jailed Chinese dissidents is outweighed by our government’s desire for good relations with our largest creditor.

We understand these things even if we don’t like them. And we ignore them at our peril.

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