Twofish's Blog

December 15, 2006

Notes on Paulson’s visit

Filed under: china — twofish @ 3:00 pm

One thing that surprises me is how little discussion there has been of where the Chinese leadership is getting their ideas from. Between 2001 and 2003, the Politburo commissioned a massive study of the rise of great powers, and there was a recent CCTV television series from which you can glean some ideas about what they concluded.

The interesting thing is that the conclusion seems to be that China should model its rise after the rise of the United States in the early-1800’s. From this one can logically conclude that if you look at US policy in the early 1800’s, you can figure out something about Chinese policy today, and US policy in the early-1800’s was rather protectionist.

The key thing that makes me think of this is that one of the main architects of the “American System” was one Henry Carey who wrote a book called the “Harmony of Interests” and I don’t think that it is a conincidence that “harmony” is the keyword of the Hu Jintao administration.

In that book, Carey argued that free trade was good for undeveloped markets and developed markets, but there was an intermediate period in which tariffs were necessary. Carey also advocated weak IP laws, and government spending on internal improvements. Much of that explains recent Chinese policy, and the rise of China vis-a-vis the United States I think is being modelled much as the rise of the United States vis-a-vis Britain.

Something that comes across in reading Chinese economic and political debates is that particularly with respect to grand strategy, these debates are “historically rooted” and you have allusions to strategies and situations that happened during the Warring States period. One of the ironies here is that I’ve gotten the since in these debates that the China leadership knows more about US economic history than the US leadership.

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