Thursday, April 20, 2006


The administration’s focus on China’s quest for oil was signaled when it published a revised National Security Strategy last month, approved by Mr. Bush, that contained a pointed new entry about China.

That country’s leaders, the document declared, are “expanding trade, but acting as if they can somehow ‘lock up’ energy supplies around the world or seek to direct markets rather than opening them up, as if they can follow a mercantilism borrowed from a discredited era.”

Mercantilism was a post-feudal doctrine of national economic health through protectionism, foreign trade, and exports, but administration officials have repeatedly used it to describe China…

…Mr. Greene…recalled a visit from a senior Chinese official who tried to explain that China was only seeking business deals…”He used the example of Sudan and he said, ‘Look, you know, we don’t care about internal issues like genoicide, we only care about the oil because we need the resources.’”

“And I said, ‘Well, look, that’s mercantilism.’ And the Chinese translator had trouble translating “mercantilism” and they had a big debate about it, and we figured it out. And then they had a big debate about whether I meant that as a good thing or a bad thing.”

David Sanger, China’s Big Appetite for Oil is High on U.S. Agenda, New York Times print edition April 19, 2006

The confusion is understandable.

I would characterize “mercantilism” as post-feudal, post-Renaissance, and post-Reformation, a creature of the Enlightenment, an attempt to apply rational scientific principles to the national economy, and the doctrinal mainstay of the British Empire during its glory years of the 18th and 19th century.

The Chinese have an intimate experience with one of mercantilism’s signature moments and most significant expression: the development of the Chinese opium trade.

The British crown was appalled at the outflow of specie occasioned by England’s thirst for Chinese tea in the 18th century, at a time when the Chinese famously declared no need for British manufactures.

The British response was to stimulate the Chinese demand for opium cultivated in India, and promote and protect that commerce through a series of wars in the 19th century that not only opened up China completely to the trade, but caused the Chinese to lose control both of its customs regime and its revenues and experience a serious balance of trade deficit as its silver poured out of the country. Then, as they say in Hollywood, much craziness ensued, culminating in the Communist takeover in 1949.

Yes, that mercantilism.

The “Mr. Green” referred to in the New York Times quote is Michael J. Green, former Senior Director for Asia at the National Security Council, a very bright fellow, fluent in Japanese, and presumably one of the chief architects of the Bush administration’s China policy.

That policy is predicated on the hope that Japan’s current steadfastness in support of U.S. policy aims in Asia and the Middle East will be rewarded with a giant kablooie in China, instead of witnessing a trend of growing Chinese influence and waning American presence that will send Japan sliding ineluctably into the Chinese camp.

That’s why President Bush seems to spend more time on his trips to Asia communing with Donald Rumsfeld’s lonely pony in Mongolia than he does engaging with the Chinese leadership.

But I digress.

Anyway, Mr. Green surely knows the meaning and connotation of the word “mercantilism”, and that using it to describe an unprincipled grubbing for oil in Sudan very similar to what we do in Saudi Arabia is less than accurate.

For that matter, the death knell for the possibility of a global consensus in favor of laissez faire and the international free trade of oil—and the slide into “mercantilism”--was probably sounded by two US actions: the invasion of Iraq and the US political fracas that led to the abandonment of CNOOC’s bid for Unocal and its offshore, free-market oil resources.

What I think Mr. Green is trying to deal with is an “epithet deficit”.

We want to discommode China, we want to wrongfoot it, we want to frame China in a negative and unwelcome way.

But we’re running out of good epithets.

“Axis of evil” and “rogue state” aren’t available, not for a country that seems to be playing the 21st century economic game almost as well as we are.

“Protectionism” might accurately convey China’s solicitude in not opening its economy wholeheartedly to foreign capital flows and business participation, but “protectionism” isn’t scary. It brings to mind a country trying to protect its economy, not the specter of invading Oriental hordes that elicits steely, desperate resolve on freedom’s front line and justifies multi-billion dollar defense budgets.

To justify the political, economic, and military risks of confronting China--and wean Taiwan, Australia, Indonesia, and India away from the dangerously seductive idea that peace, prosperity, and coexistence might go hand in hand--China’s policy is best described in aggressive, expansionist terms.

At the very least, we hope to characterize China as an immoral and inimical actor on the world stage, greedily playing footsie with dictators in Iran, Burma, and Sudan while the US valiantly tries to build a better, freer world.

How about “global oil hog?”

Nah. Too much “pot calling the kettle black” there.

But I’m afraid “mercantilism” is not going to send shivers down anybody’s spine.

All it does is conjure up the vision of a Chinese foreign policy that’s amoral and refuses to address any ethical issues beyond the win-win math of trade and economic development.

An accurate expression of China’s current policy might be “aggressive globalization of its economy enabled by the United States idiotically shoveling government debt onto the world market to finance an irresponsible national lifestyle.”

We’ll leave that question to the philosophers--and the economists.

Today, with America’s freedom crusade mired in a failed war of aggression in Iraq and seemingly bereft of foreign policy alternatives vis a vis Iran other than infuriated saber-rattling, China’s stance doesn’t really suffer by comparison.

In fact, people might get the opposite idea: that we might advance goals of security and prosperity by welcoming states into the family of nations through trade, rather than ostracizing them.

By the way, the correct Chinese translation of “mercantilism” is “zhong-shang zhu-yi”, “giving the highest priority to commerce”.

And today I guess it’s a “good thing”.

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