An overall fairly sanguine outlook regarding US-China relations, balanced by a dose of realism, characterized remarks by Dr. Christopher A. McNally, at a recent forum as part of Chaminade’s Sino-Capitalism lecture series.
McNally, a professor of political economics at Chaminade and an Adjunct Senior Fellow at the East-West Center, is a nationally recognized expert on Sino-Capitalism, which provides an intriguing framework for examining the unique US-China relationship in this era.
Despite tough talk directed at China during the US Presidential campaign, Trump’s approach after taking office has shifted 180 degrees according to McNally (–who also pointed out the opposite has occurred with Russia). Trump previously had bashed China on trade, currency manipulation, and its geopolitical aspirations.
After his very positive meeting with Chinese President Xi Jinping at Mar-a-Lago, Trump’s new agenda is emerging that ties geopolitical cooperation to deepening economic relations. McNally noted that the United States and China are “deeply enmeshed” over a broad spectrum of politico-economic relations. Financial and economic integration means that China and the US have to, for better or worse, get along.
McNally went on to explain that economic ties between the US and China are so deep because China has generated a novel yet highly dynamic form of capitalism that is globally integrated. Among China myths debunked in his presentation, McNally firmly rebutted the notion that the United States is still in the driver’s seat, stating that this is increasingly not the case. He illustrated this by the fact that the United States has to rely on hard power more often now to project its influence rather than more efficient use of economic or financial strategies.
Nevertheless, recent developments give cautious cause for optimism. The new agenda under Trump that ties geopolitical cooperation with China (especially vis-à-vis North Korea) to deepening economic relations is positive. Postponement of the 100-day deadline to address economic imbalances to one year is another sign of a more collaborative approach.
Regarding the US-China Trade deal, while modest in some ways, the agreements on US beef, LNG, and ratings agency access certainly represent a clear “win-win” situation for both sides.
McNally summarized his reasons for optimism by pointing out that Sino-capitalism could create the conditions for a unique economic condominium – its bottom-up entrepreneurial element is already deeply integrated into the US economy, and the potential for “growing the pie” is enormous.
Support for this forum is provided by the late Chaminade Regent Stanley W. Hong’s Endowed Fund for Distinguished Asia-Pacific Speakers and Scholars.