There’s a right way and a wrong way to compete with China

The Biden administration has announced a new policy to establish export controls to prevent American companies from selling advanced semiconductors to Chinese firms. These semiconductors are used to help Chinese companies develop new products and to make China more prosperous. What we are trying to do is stop such increases in prosperity.

Times have dramatically changed. It was only one decade ago, in 2011, that President Barack Obama stated, “We welcome China’s rise.” China’s poor human rights record was a “source of tension” between the two countries; but, Obama said, the nation’s development will lift millions out of poverty, “and that’s a positive good for the world, and it’s something that the United States very much appreciates and respects.” Around that same time, the dominant view among U.S. academic experts on China was that as China grew richer, it would come to resemble the West more.

But only a few years ago, pretty suddenly, that view faded. 

Back in 2019, “The Economist” wrote about what they called “the starkest reversal in modern geopolitics, noting that “political leaders and China-watchers across the West — most notably in America, but also in Europe, Australia and Japan — have come to believe that they were wrong about China’s rise. From cabinets to boardrooms to book-lined studies, voices which once argued that a growing middle class would drive China towards Western values have fallen silent.” At almost warp speed, views about China hardened to where we are today — they are our adversary, indeed our main adversary in the world.

There is certainly a lot not to like about the Chinese government, ranging from their suppression of Hong Kong and threats to democratic Taiwan to their treatment of ethnic minorities in Xinjiang and of dissidents inside China. And, in terms of their access to advanced semiconductors, these certainly sometimes are used to develop military weapons that it is legitimate for us to keep from them.

Still, I want to question the “adversary” lens that has now come completely to dominate U.S. views on China, the view that if something is good for China it is bad for us. This is for a more fundamental reason than the Biden administration’s observation that we have areas of cooperation such as climate change or infectious diseases. Above all, it is wrong to hold a zero-sum view that economic growth in the world in general — and growing Chinese prosperity in particular — is a world of winners and losers.

China’s rise means the country is playing a much bigger role in world trade. That is not bad for us. China’s growth has opened up enormous opportunities for American companies to sell to China. China’s sales to us provide U.S. consumers with lower prices and hence, a higher standard of living. And obviously, this growth is good for ordinary Chinese. Though this is hardly ever mentioned these days (though Obama recognized it in the 2011 quote above), China’s rise has lifted literally hundreds of millions of people out of poverty. Only the heartless are not overjoyed about this.

The Chinese government is constantly stating that the U.S. is trying to “suppress and contain China’s development.” I used to think such pronouncements were paranoid. But the administration’s actions on semiconductor sales suggest that even paranoids have enemies. I also fear that some of the psychology behind the desire to cut off China at the knees comes from a worry that they will overtake the United States and we will no longer be king of the hill. That psychological reaction is understandable, but it is hardly attractive.

We should criticize what China does in Hong Kong and Xinjiang, and against domestic dissent. And we should compete with China by working to do better, to contribute more to the world. We should not compete with China by trying to make them poorer and weaker. The former approach shows our country at its best. The latter approach is not worthy of us.

Steve Kelman is the Weatherhead professor of Public Management at Harvard Kennedy School and editor of the International Public Management Journal.