TCS Daily

The Threat From Sino-America

By Dave Kopel - July 16, 2007 12:00 AM

In June, Costa Rica ended nearly sixty years of diplomatic relations with Taiwan in order to establish diplomatic relations with China. Not only a victory in Beijing's efforts to smother Taiwan's independence, the Costa Rican switch is further evidence of China's growing influence in Latin America—a growing threat to democracy and to U.S. interests.

Announcing the diplomatic switch, Costa Rican president Oscar Arias cited a desire to strengthen commercial ties and "attract investment" from China. Arias then thanked Taiwan for its "solidarity and co-operation" over the last sixty years, noting that Taiwan has been "very generous."

But the next day, Arias denounced Taiwan for being "stingy." Sounding as though he had taken emergency talking points from Beijing, Arias grumbled, "Considering the few friends they have, they don't treat them very well." Arias continued, "Without a doubt, we will get more help from China."

In truth, Taiwan is quite generous for a small nation, but a nation with a population of 21 million can't offer the same economic incentives as a nation with a population of 1.3 billion and the world's second-largest economy.

China insists that the price of trade relations is the severance of diplomatic relations with independent Taiwan. A 2005 Heritage Foundation report warned that "China has launched a major diplomatic offensive in Central America and the Caribbean to stamp out Taiwan's diplomatic legitimacy in the region and supplant Taiwan's influence among these young democracies with its own." The report observed that China has been "translating its economic success -and its search for resources to fuel its economic growth—into greater influence in Latin America and the Caribbean."

Historically, China's claim to rule Taiwan is very weak. In the five thousand years of Chinese history, there are only 17 years, in the late 19th century, when a government with actual sovereignty over the mainland even claimed to possess sovereignty over the entire island of Taiwan. If historical sovereignty is the test, Japan has a much better claim to Taiwan than does China, since Japan ruled Taiwan from 1895 to 1945, a sixty year period in which the people of Taiwan made far more economic and educational process than in the earlier periods when part of Taiwan was ruled by China.

Whatever the historical realities, Chinese and Latin tyrants find common ground in political realities. Chinese President Hu Jintao and Venezuelan President Hugo Chavez have inked numerous agreements expanding the relationship between the Beijing and Caracas, including a deal to jointly develop oil fields in Venezuela.

China is a ready friend for anti-American thugs, and not just Chavez. China has cozy relationships for energy development and arms sales with the genocidal Mugabe regime in Zimbabwe and the genocidal National Islamic Front regime in Sudan. China has used it power at the United Nations to ensure that no meaningful barriers are imposed on Iran's nuclear weapons program.

As reported in the Washington Times, China is supplying arms to the Taliban and to terrorists in Iraq—notwithstanding China's claim that it does not interfere in the internal affairs of other nations.

A 2006 Heritage Foundation report observed that "The People's Republic of China (PRC) aids and abets oppressive and destitute African dictatorships by legit­imizing their misguided policies and praising their development models as suited to individual national conditions."

The Chavez government's creeping dictatorship fits well with Beijing's development model. "Is Washington Losing Latin America?" asked a 2006 article in Foreign Affairs, pointing out that Chavez "has made clear his intent to forge a wide anti-U.S. coalition in order to replace Washington's agenda for the hemisphere with his own—one that rejects representative democracy and market economics." The article noted: "Although the nature of Chavez's involvement remains murky, [Bush] administration officials are convinced that he is provoking instability in some of the most volatile states in the hemisphere, including Bolivia, Ecuador, and Nicaragua."

Recently, Bolivia has elected a Chavez ally, Evo Morales, as president, and Nicaragua has elected Daniel Ortega, a Marxist revolutionary, as president. Bolivia, Venezuela, Nicaragua and Cuba have formed an anti-American trade bloc, the "People's Trade Agreement," which the government-controlled newspaper China Daily describes as a starting point for Chavez's grander plan for a hemisphere-wide "Bolivarian Alternative for the Americas."

As the Heritage Foundation points out: "For decades, the United States encouraged and supported forces of freedom and democracy in Central America—with considerable success. Meanwhile, China has reassured the world's despots and tyrants that 'each country has the right to choose its own path to development...'"

As China helps Chavez expand his military, economic, and political power, the dangers for other democracies in the region will grow—most immediately in Colombia and over the long term in Central America.

Thus, the decision of Costa Rica's Arias to play his own part in abetting the expansion of a Chinese sphere of influence in Latin America may be profoundly dangerous of Costa Rica's own democracy, whatever the short-term economic benefits.

And it is not necessarily clear that a growing Chinese economy is good for Latin America. Ever since China joined the World Trade Organization, Mexico has been hemorrhaging manufacturing jobs, as companies more production to China (where labor rights are nil, and wages are far lower than in Mexico)—and thus significantly exacerbating the Mexican economic problems which cause illegal immigration into the United States.

At a June meeting in Atlanta of western hemisphere government and business leaders, El Salvador's vice-president remarked that "The participation of China in the WTO hit us particularly bad" including the loss of numerous agribusiness and textile companies and over 7,000 jobs.

"The small, poor Central American nation fought back by embracing U.S.-style capitalism and signing a free-trade pact with its neighbors and Washington. Escobar said those 7,000 jobs have been replaced with a more diverse, service-oriented economy including call-center jobs," reported the Atlanta Journal-Constitution.

There is much more that the U.S. could do to mitigate the spread of China's malignant influence in the Americas. As James Fallows observed in this month's issue of The Atlantic, "The United States is the only nation with the scale and power to try to set the terms of its interaction with China rather than just succumb. So starting now, Americans need to consider the economic, environmental, political and social goals they care about defending as Chinese influence grows."

A good starting point would be to re-energize efforts at expanding trade with South America, especially with Brazil and Argentina, which are South America's largest agricultural exporters and important potential buffers to the spread of Chavez's Marxism. Given the national security benefits of reducing U.S. oil imports from the dictatorships in Venezuela and Saudi Arabia, the U.S. should abolish its enormous tariff barriers against sugar cane ethanol from Latin America.

The U.S. free trade agreements with Chile in 2003 and with Central America countries and the Dominican Republic in 2005 (CAFTA) were a good start. But the broader Free Trade Area of the Americas (FTAA) fell apart in 2005, much to the delight of Hugo Chavez.

This spring, the U.S. and South Korea concluded a free trade agreement. Almost all the same economic arguments for the free trade agreement with South Korea are applicable to Taiwan. Taiwan is an eminently suitable partner for a FTA; the Heritage Foundation's 2007 Index of Economic Freedom ranks Taiwan as the 26th freest economy in the world, and describes Taiwan as one of Asia's "most dynamic democracies." (China, meanwhile, ranks a dismal 119th, with "egregious" corruption and very severe restrictions on investment freedom, financial freedom, and property rights.)

Unfortunately, the State Department bureaucracy has ignored Taiwan's repeated requests to negotiate a U.S.-Taiwan FTA.

Of course a U.S. free trade agreement with Taiwan would annoy China. But who put the Chinese dictatorship in charge of America's trade relations? The democratically-elected government of Taiwan has strict environmental, safety, and property rights laws, and Taiwan's free press serves as a watchdog for the enforcement of these protections. So—unlike with imports from China—American consumers can feel safe that Taiwanese imports will not be poisoned, and will not produced by the theft of intellectual property from Americans.

A U.S.-Taiwan FTA would also be an important diplomatic signal that the U.S. is not going to acquiesce in China's policy of expanding its sphere of influence at the expense of democracy. If China succeeds in imposing an Anschluss on Taiwan, the inevitable effect will be for Japan and the Philippines to move towards a more neutral, rather than a pro-American position. The Chinese military knows this, and that is one reason why Taiwan is the linchpin of their multi-decade plan to displace the United States as the major power in the Western Pacific.

President Kennedy's inaugural address promised: "To our sister republics south of our border, we offer a special pledge--to convert our good words into good deeds--in a new alliance for progress--to assist free men and free governments in casting off the chains of poverty." As the people of the people of El Salvador know, free trade with the United States is among the best ways to promote progress in fledgling democracies—in Latin America as well as in East Asia.

President Kennedy continued: "But this peaceful revolution of hope cannot become the prey of hostile powers. Let all our neighbors know that we shall join with them to oppose aggression or subversion anywhere in the Americas. And let every other power know that this Hemisphere intends to remain the master of its own house."

In resisting Soviet-Cuban attempts to impose communist dictatorships in El Salvador and Nicaragua, President Reagan carried out President Kennedy's vision. But today, as China assists the military build-up of a Venezuelan tyrant who aims to export dictatorship, the Americas are once again challenged by an Asian giant with plans for subversion in the Americas.

Whatever the strategic merits of President Carter's 1979 decision to cut formal diplomatic relations with Taiwan, the U.S. no longer needs to appease China in order to contain the Soviet Union. To the contrary, China has taken over the former Soviet role as the main external supporter of dictatorship and anti-Americanism in the Americas. It is time for Americans to begin a serious debate about whether American security interests are really served by the appeasement of China.

Dave Kopel is Research Director and Mike Krause is a Senior Fellow at the Independence Institute, a human rights think tank in Golden, Colorado,



Republic of China
We should not forget them. We should always support them.

Crushing dissidence
China's claim on Taiwan doesn't descend from any historic colonization of that island, but on a claim against its Nationalist Chinese. It would be as though as the Confederacy was dying, Lee, Davis and a million Confederate followers went to Cuba, and continued to fulminate against the Republic. We could not allow it, and would threaten any supporters of a Rebel Cuba with diplomatic sanctions.

China's popularity in Latin America is much like China's popularity in the US. One does not easily ignore the world's third largest economy. So naturally places like little Costa Rica are not going to want to marry themselves exclusively to the United States.

And in the US, who was the last president to come out in defense of Taiwan? Ike? Obviously the People's Republic has more to offer a commercial partner.

China, in exporting arms to unstable countries, is emulating the United States. Every time one of the arms recipients foments a successful coup, the donor country gains another "staunch ally". Sadly, it's the way this game is played.

It is worth pondering How China became the world's third largest economy
When Big Labor wrested concessions from the US GOVAGs on minimum wages et al, with the help of Democratic Party, Big Business went to China, with the help of the Republican Party (remember Nixon?) giving rise to the rise of China.

Without the US market, China would not have been what it is today.

Big Labor?
What an odd comment to make-- as the labor movement has been extinct since the 1970s, and there was no appreciable capital flight to China before Bill Clinton came to office. It's not just the US market but US capital that has made China what it is today.

And China became the world's third largest economy mostly on the basis of having an unlimited supply of unpaid labor available. But also because the Chinese were well versed in the virtues of trade at a time when the Europeans were still chucking spears at one another.

Re minimum wage, that $5.15 is earned by only a miniscule percentage of the labor force. And those who are earning $5.15 are mostly burger flippers-- people geographically immune from being replaced by Chinese workers. Are you saying that having to pay people a princely five bucks an hour is breaking the backs of our employers?

Under your scenario, had Lee fled to Cuba, the US would have the right to annex Cuba as the newest state.

As to Ike being the last president to publicly defend Taiwan being Eisenhower, I see your history is as bad as every other subject you have commented on.

Reagan for one frequently and eloquently defended the rights of the Taiwanese people to be free of China.

One China Policy
What if the real One China Policy is to unite Taiwan with PRC WHEN PRC climbs up to the economic and political level of Taiwan?

It seems to me the PRC has moved closer in many respects to Taiwan.
Taiwan has definitely NOT moved closer to PRC.

Maybe that free market virus will ulitimately trigger a free market for politics in PRC.

Political liberalization
PRC is definitely not ready for political liberalization. They're sitting atop a powder keg-- one billion people the economy hasn't reached yet with any benefits.

Loosen up political control and the beast could awaken. Not going to happen for a while, yet.

The Chinese economic miracle is a hothouse experiment being conducted very carefully by the politburo.

As a practical matter, China's Taiwan policy has been to neither forcibly annex their breakaway province nor allow it to declare independence. There is merely an uncertain detente of long standing.

" one billion people the economy hasn't reached yet with any benefits."
What do you mean by 'benefits'? Benefits like health care or sick leave?

Or do you mean they really haven't embraced the benefits of free markets for all?

"uncertain detente of long standing."
That's why China has its massive military poised to invade Taiwan?

1 billion customers
That's why business moved to China.

The meaning of "benefit"
It's kind of hard discussing anything with someone who speaks a whole different language. China is a first world country the size of the United States-- 300 million people-- attached to a fourth world country of one billion people. The residents of that second, undeveloped China have seen no benefit at all from China's economic miracle.

I use benefit, in this instance, in the sense of "benefit". They have not yet benefitted from China's prosperity.

BTW, where did you get the idea our interest in China lay in trying to sell American goods to its consumers? ("One billion customers. That's why business moved to China.") We sell next to nothing to them (okay, they like our giant SUVs). We buy their cheap stuff. They don't buy our expensive stuff.

The meaning of "detente"
Well, yes, that's excactly what I mean. Since 1949 mainland China has had a sword poised to strike Taiwan. And they haven't struck a blow yet.

Taiwanese politicians know exactly where the line is that they dare not step across. And so they don't step across it. If one gets too close, the rest of the power structure throws him out of office.

The story's next chapter
Check this out:

What I keep saying is,
when intellectuals (that is ANYBODY who takes the trouble to advertise his thoughts to others. That means, ALL those who write and comment on this blog, for example) give a pass to one group of people (the "consumers" in this case) when they (NOT the intellectuals, but the Group) use the power entrusted to the GOVAGs to force another group (the "producers" in this case) to pay them (the first group, that is) an amount which the other group won't pay voluntarily, then you can not blame (or feign surprise) when the other group resorts to the same tactics. To quote yourself, “Sadly, it's the way this game is played”.

The net gainers in this sordid affair are always the GOVAGs.

And it is NOT a question of the dollar value of minimum wage but the fact that it is FORCEd.

If you really think that the princely sum of five bucks an hour is NOT going to break the backs of our employers, why should it be FORCEd? After all, Henry Ford increased the weekly wage dramatically without any force / help from the GOVAGs of that age.

Now to the specific points of your post.

Minimum wage laws were passed by FDR. After a lull before, during and after WW II, all kinds of restrictions on businesses started accelerating when the Civil Rights movement (which started well before the 1970s) was perverted to mean “positive discrimination”. That is when the Businesses were courted by the GOP and Nixon made his historic trip to Beijing. And, as the article itself shows, it is a Democratic President who ditched Taiwan in favor of the PRC. And the policy was continued by subsequent Presidents, irrespective of party affiliation.

Now to your assertion that it is Clinton era that saw increased trade with China.

From :-

“Since normalization of relations, our two-way trade has grown fourfold, from $1.1 billion in 1978 to $4.4 billion last year.”

That last year is 1983.

Trade and investment in China have been growing continuously since 1978.

China ALWAYS had unlimited supply of unpaid labor. The difference since 1978 was American Capital, Management expertise and Markets.

And what has “when the Europeans were still chucking spears at one another” got to do with the discussion, except to emphasis one more time that you consider anything non-European and/or non-White alone is worthy of praise?

And when the Chinese GOVAGs were killing and / or facilitating the death of 40 million of their citizens, the European and American GOVAGs started on the disastrous course of “positive discrimination”.

The use of force
I can't make heads or tails of your lengthy comments. For one thing, your convoluted style is totally opaque. For another, it would help if you explained to us outsiders what a "govag" is.

We could begin here: isn't any supposed opposition between producers and consumers meaningless? They are both the same people: us. American workers both produce and consume goods. Or am I missing something?

No matter. I see you bitterly resent the fact that some hideous dictatorship is making you pay your employees $5.15 an hour for their labors. And you must be beside yourself at the prospect of having to co-pay their FICA taxes.

Let's see what one man can afford on a salary of $5.15 an hour, for full time work. Using the 30% rule, he can qualify to rent an apartment costing him $268 per month. Know where I can find one of those?

Now let's see what he can't afford. Oh yes. Health care.

To me, bickering about having a minimum below which you can't employ someone reveals the workings of a very small heart. And I say this having retired from a career of employing people.

Let's admit a general truth: laws are passed for the protection of society. We willingly submit ourselves to the rule of law so we can live together profitably and with a minimum of friction. You can't, for instance, build your slaughterhouse or your chemical plant on a residential street because we have decided that permitting such a thing would be offensive to the public peace. Is that too restrictive for you?

Maybe there would be some other country more to your liking-- one that wasn't full of those dreadful govags, with their positive discrimination. You could try Myanmar. I understand there is no law there requiring that you pay your labor at all. If you can afford to hire a private army, you can just seize people and force them to work for you.

A free press and free markets for a free people
"The scandal surfaced last month after about 400 distraught parents posted a plea on the Internet about their children who had been sold into slavery in China's northern Shanxi province and neighbouring Henan.

They made their case public after police and local authorities refused to help find their children. "

" The kiln was located in a courtyard belonging to Wang's father, a local Communist Party village chief, but there has been no word on any punishment for the official."

" "The verdicts are too light. At least the owner of the illegal brick factory and his father, who was also the party chief, should be sentenced to death too," said one post on popular portal

China also announced on Monday that 95 Communist Party officials in Shanxi had been punished, but most just escaped with warnings. "

Once again demonstrating how the government fails to protect people.

But the socialist solution corporate malfesence is to give the government more power.

The Chinese government HAS the power and IS socialist and allows such behaviour UNTIL it is embarassed by free press, free people and free markets (threats of boycotts and loss of market share).

There is not going to be a war between China and the US. Unless the US is really stupid.
Face it, China and US ARE NOT/CAN NOT/WILL NOT have an armed confrontation, even over Tiawan. There is simply too large a commercial relationship between the countries and no two countries who have this much economic activity between them can afford to fight one another.

And with commerce comes information. There are literally TERA BYTES of data flowing between the US and China. And guess what the Communists are withering on the vine as we speak.

If China is support dopes like Chavez then WHO CARES!!! Chavez is a Castro with some oil and no-one who understands anything buys his philosophy of poverty, pain and misery.

So that leaves the only possible cause for a violent confrontation as the US GOVERNMENT. The citizens NEVER start wars.

The best thing the US Government can do is stop taxing and regulating its citizens and allow them to compete with China or India or Brazil or Vietnam or whomever. The worst thing the US Government can do is to dream up boogie men and get the US and China into a tit-for-tat protectionist trade war which will cost trillions in growth, impoverish China and cost tens of millions of jobs in the US.

China can stop building aircraft carriers and submarines..
and they can turn off their nuclear missiles and stop building anti-satellite weapons and concentrate on building their economy.

Interesting analogy but don't stop at half
It is an interesting analogy saying that the Nationalist Chinese are like Confederate followers. But don't stop at half. The one million Confederate followers are no longer fulminating against the Republic. But they have developed an economical miracle at "Cuba"-Taiwan and in fact in return, reinvested in the "US"-China to help the economical growth here. More than 50% of the foreign invesments in China now comes from Taiwan. Taiwanese are not interested in fighting against Chinese. Taiwanese just want to peacefully co-exist with Chinese and not to be bothered by the Chinese regime.

Ad Hominem attacks to evade the issue
What has the size of my heart got to do with the discussion? But the fact that some of today's Chinese GOVAGs (GOVernment AGents) might be the Young Turks during the Great Leap and Cultural Purges has a lot of bearing on today's and tomorrow's China. But you conveniently ignored that in favor of the size of my heart.

Tell me Roy, where in the (US) Constitution it says that it is the job of the (federal) GOVAGs to forcibly increase the size of the citizens’ hearts? Last time I checked, there was no such job entrusted to the GOVAGs. And there was also no mention of “laws are to be passed for the protection of society”. The word society does not appear at all in the text (of the US Constitution). Governments are supposed to be constituted (and GOVAGs entrusted with powers) to secure the Rights to Life, Liberty and Pursuit of Happiness of EACH Individual, Not groups of them.

Not every American produces everything and consumes everything. When some Americans, in the role of consumer of some goods, use the power entrusted to the GOVAGs to forcibly take them from the producers of those goods, we get the situation I described in my post.

So, tell me, where do you derive the Right to force employers to pay a certain minimum wage?

Invasion of the Govags
First, my comment as to the size of your heart was in response to your feeling that the bottom lines enjoyed by industrialists already more than adequately compensated, was somehow more important than whether one could employ for his own uses a human being at a lesser rate than $5.15 an hour. And I offered that I had been an employer myself. What I had found was that one gets a better effort from his low wage personnel if he came as close as he could to paying them a living wage. For me, this was a matter of heart as much as it was a management technique for getting good effort.

$5.15 is an insult. If you're in a low wage line of business, like fast food or lawn care, these people, who actually do the work customers pay for, can make or break your operation. Treat them right and they'll be good for your business. Treat them like dirt and you'll get an appropriate level of effort.

Next, Govags. You're still not very clear, but apparently this is anyone in the government. Also apparently, you don't draw a distinction between those at the policy level and those in the civil service. I can't see where this is a useful neologism.

But you're asking me where this is any of the government's business. ("So, tell me, where do you derive the Right to force employers to pay a certain minimum wage?") It's a perfectly valid question. The authorization is right here in the Preamble of our Constitution:

"We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."

Protecting the rights of labor during times when they have little political power, such as now, is every bit as important in the service of promoting the general welfare as would protecting the rights of ownership be, in some hypothetical time when it was labor who held all the power. A sound economy and a general welfare depends on both estates being healthy-- labor and ownership.

This is one of the ways in which extremist libertarian positions have always to me seemed to be somehow parochial. In the big picture, there needs to be some balance. And the enforcement of a living wage is one such requirement a healthy society must subject itself to.

Societies whose labor is performed by low-wage slaves can't generate much in the way of wealth. Their consumers can't afford to consume, and so the assembly line must stop frequently, while they try to sell a few more of their goods in inventory.

If the owners aren't willing to pay a fair day's wage, they can just get out and mow the front lawn themselves-- and pick up around the employees' parking lot while they're out there. :)

China and the U.S.A.
I made a trip to China in May 2007 for business. I have been with Chinese businessmen in Iowa for separate trips of two and five days within the last two weeks. Different companies.

I found these people, people like us, who have interests in pleasure, enjoyment and hard-headed business. We got along well and did some good business.

Our threat from China rests in the minds of people who have never studied China. It has never been a colonialist country except among the Chinese speaking countries (the Quantung, Fuchian, Szichuan, Zinjiang, and other Chinese speaking regions.

Paranoia over China will only cause recriminations between our two sovereign nations.

Allan Fritz

The U.S.A. has nuclear weapons, aircraft carriers, Nuclear submarines and a whole lot more than China! We are both sovereign countries.

I was a Special Warfare Operator in operations against the PRC in the 1960's. I have seen a major change in the PRC in recent trips. Paranoia against any country does no good.


Then China shouldn't have anything to worry about.
The USA doesn't plan to colonize China.

What's to study? They are communists.

That is essentially giving carte blanche to the GOVAGs,
if you let them take the words of the Constitution out of context and "interpret" them in any way they want.

Is that what you want?

If so, how can you object to ANY policy of ANY GOVAG, Republican or Democrat or third party?

Or, do you mean to say that the most we non-GOVAGs (and even the GOVAGs in their role as non GOVAGs) can do is to protest AFTER the fact (of some action by the GOVAGs)?

Employees can't afford to wrk for much less than 'minimum wage'...
The reason for the minimum wage is to give employees close to a living wage. You want people to be able to afford the stuff they need. Why would any decent employer NOT want their employees earning a fair wage? If they're too slack to even be worth minimum wage most employers find excuses to 'let them go' anyway. I wouldn't want anybody working for me thinking I was too much of a cheapskate to pay them right. I'd sooner do all my work myself than create such perceptions!

Are you saying you wouldn't have paid
a fair wage to your employees without the Minimum Wage Act?

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