China and the World

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Sino-American relations deteriorate over Google

Those were the days...

Deng Xiaoping was just five foot tall; but his influence in modern China has been that of a giant. Yet Deng wanted China to draw as little attention to itself as possible on the international stage. “Hide brightness, nourish obscurity; bide our time and build our capabilities” was the maxim.

The principle was a simple one: avoid foreign conflict and keep a low profile. Meanwhile, focus national energies on economic growth. That meant prioritising good relations with America, since it was China’s biggest export market.

The year 2008 will be remembered as the one in which Deng’s maxim was reinterpreted. The demise of Lehman Brothers and the onset of the financial crisis has allowed for a change in mood. Beijing’s bureaucratic elite, sensing a new uncertainty in Washington and other Western capitals, seems to have decided that it has ‘bided its time’ long enough and the time has come to start flexing its muscles.

Nowhere has this been more evident than in its increasingly fractious relations with the US. The most recent flashpoint has been Google, and its announcement that it will quit China if it can’t offer uncensored searches. The US Secretary of State Hillary Clinton took Google’s side – telling China to drop internet censorship.

Her comments were not welcomed in Beijing, which responded with an “orchestrated” anti-US backlash, reports Reuters.

The People’s Daily got the ball rolling: “These statements and actions disregard reality and harm China’s national image, upsetting the healthy and stable development of Sino-US ties. It is not difficult to see the shadow of the US government behind the politicisation of the Google affair.”

Another Chinese paper, the Global Times, then accused Washington of “hypocrisy” over the Google debacle.

How so? The American tech firm had claimed to have been a victim of Chinese hackers, with Gmail accounts accessed. Clinton had even lashed out at suspected state-backed hacking.

Surely this was a double standard, the Global Times countered. After all, the US practically invented cyber warfare and hacked email accounts as part of its own war on terror. Why shouldn’t China use hacking to defend its national interests too, the paper asked?

The war of words follows increased tensions between the two governments over China’s currency, worsening trade relations (see last week’s issue), and Chinese anger over US arms sales to Taiwan.

The new mood was also on display at this week’s World Economic Forum – which welcomed China’s largest delegation yet.

The feeling in Davos, says the New York Times, is that “China is no longer emerging. It has emerged… The severe recession has fast-forwarded history, catapulting an unprepared world into a period of uneasy cohabitation between the US, the number one economy, and its eventual successor.”

Unquestionably, Sino-US relations are moving back into a tenser period.

HSBC is also concerned and forecasts there’s a good chance of a trade war.

“For the US, China’s growing influence is proving to be a deeply-uncomfortable experience,” reckons HSBC’s group chief economist, Stephen King.

“The argument over Google is just the latest in a long line of disagreements between these two superpowers,” he continues. “Worse may still be to come. This, I fear, is an unstable situation. How it ends is anybody’s guess, but China’s success will increasingly be seen by Americans as a challenge to US dominance on the world stage. It’s not difficult to imagine a world in which a US President, desperate to shore up domestic support, adopts a populist China-bashing manifesto. We could then all-too-easily end up heading into a world of trade wars, heightened protectionism and, ultimately, collapsing economic activity.”


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