PUSHING CHINA AROUND

The Bush administration is continuing to push China on the military front. Larger battles are likely to be fought in the economic realm. This is where the greater danger, and if history is a guide, success may lay.

Soon after President Bush took office, there was a brief crisis over a collision of a U.S. spy plane with a Chinese defense jet off the Chinese coast. A Chinese pilot was killed, and the U.S. plane was forced down and the crew was detained. After some tough U.S. talk about the incident, diplomacy prevailed. The American crew was released and the episode ended peacefully.

Before long, however, U.S.-China tension began to rise again. In a little-noticed passage in his June 1, 2002, address at the U.S. Military Academy at West Point, Mr. Bush said: “The United States has, and intends to keep, military strengths beyond challenge, making the destabilizing arms races of other eras pointless.” Chinese leaders took private offense, seeing those words as directed against their drive to modernize and expand their military forces.

Then came other elements of the Bush Doctrine, notably the label of “axis of evil” pinned on North Korea, Iran and Iraq and U.S. pressure increased on China to lean on North Korea to persuade it to give up its nuclear weapons program. There were new arms for Taiwan, and implied support for its independence movement.

The most severe jab at China is the current Pentagon complaint about Chinese military expansion, to the accompaniment of an Internet drumbeat by hawkish conservative groups about a “Chinese military threat.” Defense Secretary Donald Rumsfeld accused China recently of needlessly expanding its missile forces and enhancing its ability to project power at a time when it faces no threat.

Now comes renewed U.S. business pressure against the massive textile exports to the American market and the recent U.S. imposition of quotas. Also the Bush administration’s pressure on China to revalue its national currency in hopes of reducing the record U.S. trade deficit with China, although Federal Reserve Chairman Alan Greenspan and leading international bankers doubt that it would help much.

A group of China specialists, who met last weekend at a conference at Long Branch, N.J., expressed alarm over these developments because they considered the United States vulnerable to Chinese economic countermeasures.

Despite China’s prodigious exports -mainly to the United States – the country buys almost as much as it sells. Last year, China spent $500 billion abroad. Competition is fierce among companies around the globe to get in on China’s burgeoning market.

Although the countries have long disagreed on military policy, human rights and social issues, the United States and China have found ways to get along economically. They must continue to do so.

A major concern to the China specialists was that the country been investing so much of its huge earnings from trade with the United States in U.S. treasury securities that it has become, in effect, this country’s banker.

Their ominous prediction was that if China should even suggest the possibility of transferring part of its American investments to Europe the result would be a collapse of American markets. There is clearly a limit to how hard the United States should push China to do things it doesn’t want to do. That limit is felt more keenly the longer the United States runs deficits to be bought up by Beijing.