Tue, Oct 30, 2007 page8

• EDITORIAL: Calling Beijing's tired, old bluff

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  We've heard it all, from "serious" to "severe" to "irreparable," all used by Beijing to describe the consequences upon bilateral relations -- read trade -- of actions taken by states that work against its ambitions.

  As recently as last week, Beijing was using that language to harangue the Canadian government for announcing that the Dalai Lama would meet Canadian Prime Minister Stephen Harper in Ottawa this week. Before that, it was the US for conferring upon the exiled Tibetan leader the Congressional Medal of Honor. And thus down into history: China turned the screws when states chose to recognize Taiwan, sell weapons to it, let certain individuals visit their countries -- such as when former president Lee Teng-hui (李登輝) was allowed to give a speech and receive a honorary degree at his alma mater, Cornell University, in 1995 -- or whenever those states criticized Beijing on human rights.

  That Confucian song in which the headmaster berates his students for doing something not to his liking is getting a little old -- so old, in fact, that it has almost become a Pavlovian response.

  And like every other threat, if it is not acted upon over time, it gradually loses its dissuasive effect. If those threats had been made in earnest, one would imagine that in the past 30 years or so -- when Beijing began using this political grandstanding to pressure governments -- diplomatic relations between China and the rest of the world would have dwindled, because most countries have, at one point or another, done something that Beijing didn't like.

  But the opposite has happened and China's ties to the international community have intensified, proving that the so-called "severe" consequences were nothing but hollow threats. In fact, one would be hard pressed to find examples of Beijing actually acting on one.

  Vituperative language and dramatic ambassadorial posturing aside, China needs the world more than the world needs China. Numbers alone show us why. WTO statistics show that China's global exports of merchandise were worth US$762 billion in 2005, while its imports were US$660 billion. In other words, China had a US$162 billion trade surplus. Its principal export markets were the US and the 25 countries comprising the EU, which accounted for almost 40 percent of its exports.

  What this success means for Beijing, however, is that even if it wanted to, it can ill afford to sever those ties. While the prevailing belief is that states threatened by Beijing will shift gear on policy decisions, the truth of the matter is that Beijing's warnings have had little traction, especially when the countries being threatened represent almost 40 percent of its export market.

  Another factor that will weaken the effects of Beijing's threats is India, which some economists say could replace China as the world's No. 1 factory for global goods within as little as five years. The imminent Indo-Chinese competition for share of the global market, from manufacturing workforce to exports, means that China probably has reached the apogee of its economic lure and with it the capacity to threaten other countries with the stick of bilateral relations.

  While China is presently the world's No. 3 exporter of merchandise, India -- a more politically stable country and a democracy -- is No. 29, meaning it has lots of room to grow.

  Consequently, the Dalai Lama will continue to tread the world, receive awards and shake hands with heads of state, and the negative consequences upon those states will only decrease in severity.

  China's no doubt a giant, but it's a tied one.
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