Talking to Main Street, China by Yasheng Huang

From Foreign Policy…

Looking at the seemingly inscrutable actions of the men who rule Beijing, Washington often assumes many in the Chinese government to be anti-American, whereas the Chinese public is pro-American. The reality is almost exactly the opposite. Among the Chinese general public, there has always been a strong suspicion that the United States has a well-crafted, carefully thought-out, and coherent strategy to contain China. In the most extreme version of this conspiracy theory, everything is a part of the plot. Criticism of China’s record on human rights? A bid to undermine the government in Beijing. Pressure on the central bank to revalue the yuan? Obviously part of an attempt to inflict a “Japan malaise” on China. Even private actors such as Goldman Sachs and Google are sometimes portrayed in popular books and publications as America’s foot soldiers and loyal pawns in this grand strategy.

U.S. President Barack Obama’s current trip to Asia — to India, Indonesia, South Korea, and Japan, conspicuously skipping and encircling “one big red dot,” as one reporter recently put it — is likely to fan this conspiracy theory even further. One can blame China’s official propaganda organs and tight information controls for fostering these outlandish views of the United States. No doubt there is some truth to that, but the United States has consistently failed to communicate its intentions and its actions to the broader Chinese public, which, despite the infamous Great Firewall, is enjoying newfound media freedom thanks to the Internet.

The health of the relationship between China and the United States no longer depends simply on handshakes and backroom deals between officials in the White House and in Zhongnanhai. Just look at the recent midterm elections in the United States: 29 candidates, either directly or indirectly used political ads that bashed political opponents over their positions on China, according to the New York Times. When it comes to China policy, increasingly, Main Street matters. Chinese public opinion is also beginning to loom large in a range of issues critical to Sino-U.S. relations, such as the exchange rate, the role of domestic consumption in Chinese growth, and private-sector development. Yet the foreign-policy establishment in Washington has behaved as if Sino-U.S. relations were still the exclusive province of Nixon and Kissinger and of Mao and Zhou. The United States has not seriously tried to make its case and communicate its views directly to the Chinese public.

Of course, this isn’t easy in a country that heavily restricts press freedom. But technology is beginning to crack a few holes in Beijing’s system of media control. There are now more than 300 million Internet users in China, about the same size as the entire population of the United States. On top of that, China has 700 million mobile-phone subscribers — and both categories are expanding by tens of millions of people each year.

Yet for some inexplicable reason, U.S. administrations have always chosen the most censored, tightly controlled medium to communicate with the Chinese public. In 2009 Obama’s town-hall meeting in front of a live TV audience completely failed to resonate with most Chinese because the censors made sure that only the most banal questions were posed for discussion. (Sample: “Shanghai will hold the World Exposition next year. Will you bring your family to visit the Expo?”) Contrary to how it was interpreted in the Western media, the Chinese censors also limited those questions critical of the United States. They did not want to embarrass Obama.

The U.S. administration has also made its case in ways that can alienate the Chinese public. On human rights, the United States has always voiced strong criticisms of China on Tibet and on its treatment of dissidents. These criticisms typically backfire with ordinary Chinese because they are viewed as challenging Chinese cultural values and political norms. They also ignore issues that have far greater resonance in Chinese society at large, particularly in the area of property rights. When elderly widows are forcibly evicted from their homes or entrepreneurs suddenly lose the assets they have toiled for years to build, these are the “teachable moments” about why human rights and due process matter.

On the currency issue, for example, the United States consistently picks arguments that do not resonate with ordinary or even educated Chinese. The weakest of the arguments is that China has a responsibility to strive for balance in trade between the two countries. But exactly why should China bear any more responsibility for the imbalances than the United States, with its high consumption and low savings rate? The truth is that both countries are responsible — the United States through its macroeconomic excesses and China through its currency policies. To place all the onus on Beijing legitimately strikes many Chinese as extremely unfair.

There is another problem with this argument: It amounts to asking the Chinese to sacrifice jobs in the export sector to create the impression that the United States is doing something for its unemployed. This is hardly a winning argument on the streets of Chongqing and Guangzhou. The Chinese, the vastly poorer of the two countries, are being asked to reduce their living standards so that American politicians can feel good about doing something for their voters. The insult to injury goes even deeper than that — those Chinese who stand to lose most from a currency revaluation hail from the poorest, most vulnerable segment of the  population: rural migrant laborers.

To be sure, the vast majority of serious economists are absolutely right that in the long run, a currency revaluation is in the interest of the Chinese. But this is politics, where the issue is not about the technocratic intricacies of who is right and who is wrong. The Obama administration has chosen to frame the discussion in ways that are offensive to Chinese while shunning arguments that have a better chance of resonating. For example, one could argue that a currency revaluation may aid China in its aspirations of becoming a producer not just of cheap and labor-intensive products, but also a center of innovation and technology. This argument would go down better in China both because it is based on a rationale that emphasizes serving and enhancing Chinese interests and because it fits with the technological ambitions of many Chinese.

For too long, the United States has not paid attention to an important force in the Chinese economy: the rise of indigenous entrepreneurs. This is in sharp contrast to the U.S. approach in India. During his India trip, Obama met with 25 Indian entrepreneurs, soliciting their views on job creation and business expansion. Chinese private entrepreneurs have never received similar treatment from a U.S. president. Soon after Google decided to terminate its search-engine business in China, Secretary of State Hillary Clinton said that the United States deplored restrictions on the Internet and called for web freedom in China. This was a laudable speech, but it may have had the unintended effect of conveying the sense that only foreign firms, such as Google, stand for Internet freedom, whereas Chinese Internet companies do not. The simple fact is that even before Google’s exit, the vast majority of Internet activities were provided by entrepreneurial Chinese companies, such as, and Google’s exit simply provided more space for their growth. Many of these Internet companies are run by ambitious, U.S.-educated Chinese entrepreneurs. The Internet revolution in China — which has vastly expanded the free exchange of ideas and goods — is a cumulative result of the vision, successes, and technological savvy of both foreign and Chinese entrepreneurs. The administration should be careful, both in words and in deeds, not to pit the interests of Chinese and foreign businesses against each other.

In the next two years, both China and the United States will have some monumental political and policy issues to grapple with. China faces a leadership transition in 2012, and Obama will also be judged in 2012 on whether he has delivered growth and prosperity. China will figure prominently in how Obama tackles this challenge, and engagement is the only viable option. But to engage only with official Beijing is no longer enough. It is vital that American leaders learn to communicate more effectively with the Chinese people — lest the conspiracy theorists do the communicating for them.