One Billion Customers - James McGregor [97]
We returned to Beijing with a very pessimistic report—and the realization that there are more than a few people in Washington who still want to “contain China.” We predicted that it could be years before the Bush administration thawed. Then came 9/11. The destruction of the World Trade Center towers by Al Qaeda terrorists gave the Bush administration a new public enemy number one and China suddenly became one of America’s best friends.
This was one of the quickest and most extreme reversals in the always contentious U.S.-China relationship. Most American businesses weather these storms without serious damage beyond fending off Chinese attempts to use political tensions as a weapon to extract better commercial terms. But the exception is technology. American technology companies, from aircraft manufacturers to software designers, are directly at the crossroads of lingering Cold War distrust between the two countries.
China understands that technology is the key to its military and commercial modernization. But the ludicrous caricature in the Cox report—of all-powerful Communist leaders organizing Chinese officials, businessmen, scientists, and students to act like an army of robots gathering U.S. secrets as they visit or reside in the United States—reveals more about U.S. thinking than Chinese actions. Certainly China has no shortage of spies and scientists who work to get their hands on advanced technology in the United States and elsewhere. But asserting as the Cox report did that modernizing China’s military is “the main aim of the civilian economy” is simply stir-fried Kremlinology. China today is not the Soviet Union of yesterday.
The Cox report revealed the thinking and attitudes of a powerful alliance of old Cold Warriors and younger neo-conservatives in Washington. With a similar alliance alive and well in Beijing, American technology businesses will continue to find themselves squeezed and in danger of losing the global competition to companies from countries that don’t view China in the same way.
Ignore the hyperbole and look at the facts in the Cox report and it’s very clear that any serious effort to “contain” China is a fool’s mission. The China market is simply too voracious, the Chinese economy too powerful, and the political allegiances and alliances of the Cold War that could even attempt such a thing no longer exist. The Cox report shows how China is able to purchase almost any commercial technology it desires from Japan, Israel, Russia, or the European Union, all of which heartily disagree with America’s notion of a “China threat.” Europe sees the rise of China as a natural result of its twenty-five years of reform, and many in Europe and elsewhere welcome a more powerful China as a necessary balance in a world dominated by the United States.
The commercial implications of outmoded ideas and policies are ominous. As McDonnell Douglas, Hughes, and Chinese American scientist Wen Ho Lee learned during the Clinton administration, Washington politicians will roll right over any company or individual who steps into the middle of a down-and-dirty political fight. Unless the business community helps the United States—and Europe, Japan, and other significant players—devise informed and intelligent technology trade policies and build a consensus that recognizes China as a powerful global player, American technology companies could find themselves scrambling to maintain global competitiveness as Cold War thinking generates policies that allow others to capture the China market.
In the next decade, defense contractors will become mired deeper and deeper in this issue. But almost any technology company could fall victim. Many software companies may one day wake up to face strict U.S. government restrictions on China sales because of American political opposition to China’s use of modified American software to censor the Chinese Internet. We can see from the McDonnell Douglas saga why the United States slipped behind in the machine tool industry. I recently visited one of the