How to Improve U.S.-China Relations in the Wake of CNOOC

Abstract

The increasingly confrontational approach the U.S. Congress is taking toward China, as witnessed by the surge of anti-China legislation and by the excessive politicization of the proposed merger between CNOOC Ltd., a subsidiary of state-owned China National Offshore Oil Company, and Unocal is leading to “creeping protectionism,” often in the guise of protecting U.S. national security. Although it is proper to criticize China for its human rights violations and its lack of a transparent legal system, we should not ignore the substantial progress China has made since it embarked on economic liberalization in 1978. A policy of engagement—or what Hu Jintao, president of the People’s Republic of China, calls “peaceful development”—is a necessary condition for constructive U.S.-China relations. Although China’s competitiveness does pose a threat to certain U.S. economic interests, it also benefits American consumers and exporters. Protectionism would harm both the United States and China and would increase the likelihood of conflict. Hardliners would gain at the expense of more reasonable voices. To avert the risk of conflict, the United States needs to treat China as a normal great power, not as an adversary, and ensure that only those commercial transactions that genuinely threaten national security are blocked.