[JASPER KIM] Why China complements America

Given the recent U.S.-China tensions regarding the alleged cyberhacking of Google services, U.S. arms sales to Taiwan, and President Obama`s meeting with the Dalai Lama, to many it seems that we are confronting a new era of China versus America. But contrary to such a belief, this relationship will inevitably be one of China complementing America, not confronting it, in a new "Pax Chimerica" era (similar but distinguishable from past eras of Pax Americana, Pax Brittanica, and Pax Romana).

Specifically, one key factor makes the bilateral relationship uniquely complementary rather than conflicting is that their development stages are fortunately staggered, and thus different, but not necessarily conflicting.

For instance, rather than seek the global center stage, the People`s Republic of China up to this point have tried to defer the issue of whether they will be the next superpower, declaring that their nation is instead focused on fostering growth for its people, rather than the pursuit of military or political power. Some believe such contentions, while others do not. But until China`s military footprint becomes more pronounced, it seems that for now, development to Beijing means economic development, more than military-based development.



Further, while the U.S. economy, based on the free market system of Adam Smith`s "Wealth of Nations," is predicated on maximizing consumption, the Chinese socialist economic model is still based more on exports and savings than imports and consumption. In terms of trade flows, China produces, while the United States consumes. Financially, the United States spends, and China pays for such spending vis-a-vis the large-scale purchase of U.S. treasury bills.

China accounts for nearly 1.3 billion people, or nearly a fifth of the world`s total population. Some have forecasted that given China`s current growth rates, that its total GDP could surpass that of the United States by 2040. Other estimates, such as by Goldman Sachs, place that figure even closer to year 2027. This translates into continued and greater interconnectivity between the two super states.

Some may argue that differences create conflict. But look at the financial markets that power much of our global economy, both in China and the United States. It is a system based on trading exchanges, with some of the more notable physical exchanges being in New York and Hong Kong. These exchanges are driven by quid pro quo complementary trades based on different but not necessarily conflicting views between two parties. One party, the buyer, based on a positive "bullish" view, wants to hold a certain product and thus enters into a purchase agreement. Conversely, the other party, the seller, based on a negative "bearish" view, wants to unload a certain product and thus enters into a sell agreement.

In theory and practice, both can come out better ahead with such a transaction in this "duo pax" era. So they have a highly complementary than conflicting value-added relationship, even if based on extreme "market realism" that each party is solely and exclusively trying to maximize their own self interest.

Geopolitically, the United States plays a dominant role in humanitarian efforts, and is the largest donor to international organizations such as the United Nations and World Bank. China, again complementarily, while providing more in such areas, still remains content with not assuming such a large role in fear of greater scrutiny of its internal structure, such as human rights conditions and information censorship issues, to name a couple.

This also provides nations, such as South Korea, that share both Sino and Anglo-American influences, to play a "bridge and connector" role to facilitate such complementary exchanges between the two large states, beginning with the G20 summit later this year.

While some may argue that a largely bipolar global infrastructure may cause instability based on a realist competitive zero-sum game of resources and power, this relationship can instead be viewed as a positive-sum framework predicated on economic and financial realism and complementary interests. As such, both large nations need each other, whether the two nations completely agree with each other`s foreign policy stances or not.

The Sino-U.S. relationship has the potential to be both symbiotic and synergistic than more people realize in our increasingly interconnected era. This is because the global free market system is providing a common bridge between the two super states that each side needs to prosper for economic and political reasons. Thus between the two super states, it pays to collaborate, not clash. At the same time, with any relationship, disagreements are inevitable. But this does not mean under a cost-benefit analysis that the benefits of such mutual vested interests will justify the cost of disintegration of such a relationship.

As one former U.S. trade official stated, "It`s time for a new kind of doctrine. We need to develop a kind of doctrine of interdependence." This interdependence, pursuant to a new Pax Chimera era, is one that will inevitably exist. This is not based on lofty or dovish idealism, but based on realism based that it serves each super state`s respective economic, and thus, national interests to work with each other, not against each other, in the 21st century.



Jasper Kim is department chair and an associate professor at the Graduate School of International Studies of Ewha Womans University in Seoul, and is book editor of "Korean Business Law: The Legal Landscape and Beyond." -- Ed.