OPINION:
If it eased tensions between the United States and China, Thursday’s meeting between President Biden and Xi Jinping was worth it.
There are plenty of reasons to fear the leaders of our erstwhile World War II ally are mulling the possibility of transitioning from a global economic competitor into something more sinister, but the new agreement reached in principle to fight the production and distribution of black-market fentanyl is an encouraging step in the right direction. The decision to resume military-to-military communications should also ease tension in the region.
But that may not be enough to satisfy the anti-China sentiment stoked by Beijing’s mishandling of the COVID pandemic. As a result, more than a few national political leaders here opt for the “get tough” approach to the Middle Kingdom.
It’s worth exploring other options. Beijing is struggling with the country’s aging population as well as the other demographic challenges brought on by the self-destructive one-child policy. The growth and modernization of China’s economy also created an expanded middle class that now has demands beyond basic needs, including higher-cost goods and services, homeownership, vehicles, and flights for travel and leisure.
None of that happens without Western involvement in their economy.
China is more than a strategic adversary. It’s a vast market opportunity for U.S. companies as long as the challenge is approached smartly and strategically — an opportunity the European Union will happily seize if we don’t.
None of this applies to national security. In that sector, China cannot be trusted.
Take the matter of issuing the trade licenses required to export civilian products to China, including profitable goods such as civilian aviation parts. In December 2020, the Commerce Department established a blacklist prohibiting U.S. manufacturers from exporting such items to countries including China.
The “Military End User List” takes an all-or-nothing approach that presumes China will always remain an intractable foe. Should the administration adopt a more pragmatic attitude and issue those licenses when national security is not a factor, our economy would be the winner.
The U.S. Chamber of Commerce estimates losing access to the Chinese market would shrink the aviation market by $51 billion and shed 167,000 to 225,000 U.S. civil aviation manufacturing jobs.
The presumption is that China would rather purchase U.S. technology for its commercial sector than be forced to steal or reverse-engineer it, which would leave U.S. designers and manufacturers holding an empty bag.
A recent University of California at San Diego study found lowered trade barriers provide U.S. companies with valuable insulation against loss in economic downturns. Given the current state of the economy, increased exports would help soften the blow of “Bidenomics.”
If handled smartly, trade with China could mean the difference between laying people off and hiring more workers. As Mr. Biden seeks another term, he would be wise to focus on pro-growth policies that help push off recession.
Given China’s urgent need for trade with the United States to stave off economic collapse, trade may be our only lever to keep Beijing’s geopolitical ambition in check.
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