China must learn to behave

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The Independent Online
The trade quarrel between the United States and China is no ordinary one. For one thing, the sanctions announced on Saturday are the largest in US history, affecting more than $1bn-worth of Chinese imports. For another, it concerns piracy of comp uter software, patents and other intellectual copyright, the pre-ordained trade battlefield of the post-industrial age. Third, and perhaps most important, the dispute involves one of the world's most powerful and secretive countries, at the very moment i ts leadership is changing.

No one in the West can be sure of the precise interplay. Doubtless though, the worsening in relations between Washington and Peking is linked to the process of replacing Deng Xiaoping. Even if the 90-year-old Deng is still alive, he no longer controls policy. The trade argument bears every sign of being a mere part of a complex struggle within the clique of soldiers and technocrats who now effectively run China, jostling to show they will be no pushover for anyone, the US included. But it is egregious enough to be considered on its own merits.

Hitherto, Japan has been depicted as world trade's bad boy. That dubious honour may be passing to its neighbour on the Asian mainland. The US now runs a $30bn annual deficit with China, eclipsed only by that with Japan. Buy a child's toy, a brand-name sports shirt or a run-of-the-mill electronic game in an American shopping mall and there's an even chance the label will say, "Made in China". Yet Chinese restrictions on imports from the US are often fiercer and more blatant than those devised by the wilybureaucrats in Tokyo: on the Peking streets you can pick up a pirated US software package worth $10,000 for under $100. Plainly, Washington had to do something.

Suggestions have come from both ends of the spectrum. Hit China where it really hurts, argue the hawks; scrap the "One China" policy and extend full recognition to Taiwan. No, counter those who contend China is a special case, demanding special understanding at this delicate time of transition. This school would turn a blind eye to the trade abuses, in the hope of ensuring Peking co-operates on no less important issues than weapons proliferation and regional problems such as Korea. Neither side is right. Given China's mischievousness, provocation makes no sense. Nor does a policy that amounts to appeasement.

This time, the best indicator is the attitude of the party most directly affected, the US business community. As the third-largest and perhaps fastest-growing national economy, China is a huge potential market, and American car and aerospace manufacturers which stand to win colossal contracts there might have been expected to be urging extreme caution. Instead, in private as in public, they stand four-square behind the Clinton administration.

Last year, Mr Clinton rightly dropped the link between most favoured trading nation status and human rights violations, in part because of pressure from US business. Last week, by coincidence, the State Department published yet another report castigatingChina's human rights performance. Perhaps those who call the shots in Peking hoped Washington would fold again. But this time US business and the US government are talking with one voice.

And this time, Washington is absolutely correct. Its defence of American patents is in fact the defence of a principle with which Britain, and every other advanced country, is vitally concerned. China may be a very old, very powerful and very proud country. Once again it is complaining that its national dignity is being infringed. But that is no excuse for flouting agreements with which everyone must live if an orderly international trading system is to be preserved. China insists it wants to join the World Trade Organisation. If so, it must first behave properly.