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May 27, 2009
Exclusive: Obama’s Appeasement Express Continues with the Nomination of Gov. Huntsman to China
People are policy. The choice of Utah Gov. Jon Huntsman Jr. to serve as ambassador to China indicates the Obama Administration’s posture towards Beijing. Mr. Huntsman will be quite comfortable with Barack Obama’s mix of appeasement and contrived cooperation with the Communist regime. In announcing the Huntsman nomination, President Obama used the terms “concert with China” and “partnership.” Gov. Huntsman then cited an old Chinese saying, “Together we work, together we progress.” He said it first in Chinese to demonstrate his fluency in the Mandarin dialect.
A great deal of attention has been devoted to environmental issues with China, as if the U.S. was trying to create a common enemy in “global warming” so as to form an alliance with Beijing that would overshadow the traditional geopolitical conflicts that divide the two nations. This was the message Secretary of State Hillary Clinton took to Beijing in February. Mr. Huntsman, a believer in global warming, will reinforce this approach. In a 2006 speech at Shanghai Normal University, he spoke of the need for China and the U.S. to work together on environmental issues.
The United States and China sit on opposite sides of every arena of conflict across the globe. Yet, none of these issues played a major role in the discussions between Secretary Clinton and Chinese leaders. Mr. Huntsman is not being sent to Beijing to raise these contentious issues now. The only point of difference Pres. Obama mentioned when introducing Huntsman was human rights, a topic Secretary Clinton downgraded during her China trip. No mention was made of Iran, Sudan, or the South China Sea where the Chinese have been harassing U.S. Navy ships. And North Korea’s nuclear test May 25th showed the futility of trusting Beijing to restrain its ally’s actions.
The huge trade deficit with China also was not mentioned in the Obama-Huntsman press conference. China had a record $266 billion surplus with the U.S. last year, even as the American market slide into recession. Indeed, China’s global trade surplus set a new record, as it continued to grab market share from other major exporters in Asia, many of whom are friends and allies of the United States. Beijing promotes exports with a variety of subsidies and tax policies, but it also undervalues its currency to gain a competitive advantage in pricing.
Last month, Treasury Secretary Timothy Geithner refrained from labeling China a manipulator of the yuan in his department’s official review of exchange rate policy. He backed off from the assertion he made during his confirmation hearings in January that China was setting its exchange rate to gain a competitive advantage, a claim that would prompt counter action if made officially.
Any attempt to ally with China over climate change will run afoul of Beijing’s drive for economic gain. Chinese leaders do not believe in the “global warming” hokum embraced by Obama, but they do want to boost energy efficiency in a period of rising costs and reduce urban pollution for health reasons. They will not, however, sacrifice growth in pursuit of these goals.
China released its environmental plan in June 2007, which identified advanced coal technologies, energy efficient buildings, clean vehicles, and advanced industrial technologies as priority areas. The 1st National Climate Change Strategy stressed that the country's top priority remains “sustainable development and poverty eradication.” Ma Kai, chairman of China's National Development and Reform Commission told the international press at the time, “The international community should respect the developing countries' right to develop.”
Beijing will want to control the process by which “green” technology is introduced into China. President Obama wants to invest $150 billion over the next decade to create renewable energy sources and “green” technologies which can then be exported to create jobs in America and reduce the trade deficit. China, however, does not want to import technology, it wants the technology transferred to it so local firms can produce what is needed. China imposes high tariffs on all but two of the 43 “climate-friendly” technologies identified by the World Bank. To reach the Chinese market, firms will have to locate their factories behind these tariff walls, producing in China to sell to China. The purpose of “protectionism” is not to keep products out, but to draw capital and technology in.
Gov. Huntsman knows how this system works. He helped to create it, and his family has profited from it. He served as Deputy U.S. Trade Representative in the George W. Bush administration. He took part in the negotiations that gave China membership in the World Trade Organization and assured Beijing open access to the American market with a grant of permanent “most favored nation” status. As ambassador, Mr. Huntsman can be counted on to oppose any effort in Congress to redress the trade imbalance. On May 14th, a bipartisan coalition introduced the Currency Reform for Fair Trade Act of 2009 in both house of Congress. It would impose anti-dumping and countervailing duties on imports from any country whose currency is “misaligned” by government policy.
The family business is the Huntsman Corporation, founded by the governor’s father who is still the chairman. The governor’s brother Peter is CEO. The firm has factories and joint ventures in China. The firm is a global manufacturer and marketer of differentiated chemicals for plastics, automotive, aviation, textiles, construction, agriculture, and health care uses. Last September, its Asia Pacific Technology Centre opened in Shanghai’s Minhang Development Zone. Its press release called the facility “a world-class technology innovation resource.” The transfer of technology from the West has been a major factor in the advance of Chinese manufacturing, including in the development of an ever more dangerous military industrial sector.
On strategic issues, President Obama wants to wind up the wars in Iraq and Afghanistan. He does not want any new confrontations. His defense spending cuts in major weapons programs (the F-22 air superiority fighter, warship construction, missile defense) mean he does not want to respond to China’s rise with a military buildup. By picking the Republican Huntsman, Mr. Obama strengthens his hand against conservative national security experts in the GOP. Pres. Obama did the same by keeping Defense Secretary Robert Gates onboard, a man who believes that counter-insurgency defines the future of warfare, not conflict with other major powers.
The United States has transferred over $1.5 trillion to Beijing since 2000 via the trade deficit, money China has used to expand its economic capabilities, military strength, and global political influence. The Huntsman appointment indicates that nothing will be done to counter China’s continued rise as a peer competitor.
FamilySecurityMatters.org Contributing Editor William R. Hawkins is a consultant specializing in international economic and national security issues.
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