[NOTEBOOK]Keep an eye on U.S.-China ties

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[NOTEBOOK]Keep an eye on U.S.-China ties

China emerged as the biggest export market for Korea last year. According to an estimate based on customs clearance records, exports to China last year amounted to $35.7 billion, 18.4 percent of total exports.
Exports to the United States made up 17.6 percent of the total, and exports to Japan were 8.9 percent.
Even more notable is the rate of growth of exports to China. They have grown by 30 to 40 percent every year for the last couple of years, and jumped by over 50 percent last year. Thanks to that rapid growth, China has leaped from Korea’s third largest export market in 2001, after the United States and Japan, to its first.
Japan has experienced a similar expansion in its own trade with China. China is the second largest trade partner of Japan, after the United States. Trade between China and Japan is expected to grow to $180 billion in the next decade. Then the trade volume between China and Japan would exceed trade between the United States and Japan.
Mainichi Shinbun, a Japanese daily newspaper, recently urged the government to use economic relations with China as a way to stimulate the recovery of the Japanese economy.
Japan enjoys a handsome $2.1 billion surplus in its trade with China and Hong Kong, and nearly half of China’s exports to Japan come from Japanese companies located in China that re-export finished goods to their mother companies in Japan. In other words, China is a cost-saving machine for Japanese companies and an engine that gives Japanese products a competitive edge in pricing.
The equation holds true for Western businesses as well. They say that they cannot win the trade wars without using China as a manufacturing base.
While both Japan and China see the U.S. market as one of their biggest, the two countries compete in only 16 percent of the 10,000 items they export to the United States. Japan’s status in the U.S. market is hardly threatened by the rise of China.
What is more, the rapid economic growth in China has fueled a large demand for Japanese electric home appliances in that country. Mainichi commented that if Japan makes good use of China, it can find a way to save the Japanese economy.
At the end of last year, U.S. Secretary of State Colin Powell said that relations between Washington and Beijing have never been better since the two countries resumed diplomatic relations.
But the neoconservatives, the ideological core of the Bush Administration, seem to think differently.
Robert Kagan wrote in his recent publication,“Of Paradise and Power,” that many people believe that the United States would inevitably collide with China one way or another within the next 20 years, and said that is one of the reasons behind Washington’s efforts to update its military strength and establish a missile defense system. He also claimed that, in fact, the “strategic challenge” of China has been a major concern of the U.S. government since the Clinton administration. While the war against terrorism is occupying the minds of Americans for now, China still remains a grave concern for American policymakers and strategic thinkers.
The former Chinese leader Deng Xiaoping has summarized China’s diplomatic strategy against the United States as “hide the talent and wait for the time.”
According to a columnist in the International Herald Tribune recently, China is conducting a study on whether the United States and the Soviet Union could have avoided the Cold War. The purpose of that research project, this columnist said, was to prevent a similar bitter rivalry from developing between China and the United States in the future.
China believes that it will soon become a rival of the United States, the sole superpower. But it does not want to incite the United States unnecessarily and become the second Soviet Union. Especially if Taiwan makes even a slightest attempt at independence in its presidential election in March, Beijing might find itself in an awkward position. China would be forced to give up its efforts toward economic prosperity and confront the United States.
For Korea, China is an enormous economic opportunity. But at the same time, it poses even greater political challenge. If the United States and China collide, the Korean Peninsula will be directly exposed to the tremors.
Regardless of whether the North Korean nuclear weapons development program was involved or not, the peninsula would have to experience a crisis because of such a collision.

* The writer is international news editor of the JoonAng Ilbo.

by Lee Jae-hak
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