The Threat From Sino-America

By Dave Kopel & Mike Krause

Tech Central Station, July 16, 2007

In June, Costa Rica ended nearly sixty years of diplomatic relations with Taiwan in order to establish diplomatic relations with China. Not only a victory in Beijing's efforts to smother Taiwan's independence, the Costa Rican switch is further evidence of China's growing influence in Latin America—a growing threat to democracy and to U.S. interests.

Announcing the diplomatic switch, Costa Rican president Oscar Arias cited a desire to strengthen commercial ties and "attract investment" from China. Arias then thanked Taiwan for its "solidarity and co-operation" over the last sixty years, noting that Taiwan has been "very generous."

But the next day, Arias denounced Taiwan for being "stingy." Sounding as though he had taken emergency talking points from Beijing, Arias grumbled, "Considering the few friends they have, they don't treat them very well." Arias continued, "Without a doubt, we will get more help from China."

In truth, Taiwan is quite generous for a small nation, but a nation with a population of 21 million can't offer the same economic incentives as a nation with a population of 1.3 billion and the world's second-largest economy.

China insists that the price of trade relations is the severance of diplomatic relations with independent Taiwan. A 2005 Heritage Foundation report warned that "China has launched a major diplomatic offensive in Central America and the Caribbean to stamp out Taiwan's diplomatic legitimacy in the region and supplant Taiwan's influence among these young democracies with its own." The report observed that China has been "translating its economic success -and its search for resources to fuel its economic growth—into greater influence in Latin America and the Caribbean."

Historically, China's claim to rule Taiwan is very weak. In the five thousand years of Chinese history, there are only 17 years, in the late 19th century, when a government with actual sovereignty over the mainland even claimed to possess sovereignty over the entire island of Taiwan. If historical sovereignty is the test, Japan has a much better claim to Taiwan than does China, since Japan ruled Taiwan from 1895 to 1945, a sixty year period in which the people of Taiwan made far more economic and educational process than in the earlier periods when part of Taiwan was ruled by China.

Whatever the historical realities, Chinese and Latin tyrants find common ground in political realities. Chinese President Hu Jintao and Venezuelan President Hugo Chavez have inked numerous agreements expanding the relationship between the Beijing and Caracas, including a deal to jointly develop oil fields in Venezuela.

China is a ready friend for anti-American thugs, and not just Chavez. China has cozy relationships for energy development and arms sales with the genocidal Mugabe regime in Zimbabwe and the genocidal National Islamic Front regime in Sudan. China has used it power at the United Nations to ensure that no meaningful barriers are imposed on Iran's nuclear weapons program.

As reported in the Washington Times, China is supplying arms to the Taliban and to terrorists in Iraq—notwithstanding China's claim that it does not interfere in the internal affairs of other nations.

A 2006 Heritage Foundation report observed that "The People's Republic of China (PRC) aids and abets oppressive and destitute African dictatorships by legit­imizing their misguided policies and praising their development models as suited to individual national conditions."

The Chavez government's creeping dictatorship fits well with Beijing's development model. "Is Washington Losing Latin America?" asked a 2006 article in Foreign Affairs, pointing out that Chavez "has made clear his intent to forge a wide anti-U.S. coalition in order to replace Washington's agenda for the hemisphere with his own—one that rejects representative democracy and market economics." The article noted: "Although the nature of Chavez's involvement remains murky, [Bush] administration officials are convinced that he is provoking instability in some of the most volatile states in the hemisphere, including Bolivia, Ecuador, and Nicaragua."

Recently, Bolivia has elected a Chavez ally, Evo Morales, as president, and Nicaragua has elected Daniel Ortega, a Marxist revolutionary, as president. Bolivia, Venezuela, Nicaragua and Cuba have formed an anti-American trade bloc, the "People's Trade Agreement," which the government-controlled newspaper China Daily describes as a starting point for Chavez's grander plan for a hemisphere-wide "Bolivarian Alternative for the Americas."

As the Heritage Foundation points out: "For decades, the United States encouraged and supported forces of freedom and democracy in Central America—with considerable success. Meanwhile, China has reassured the world's despots and tyrants that 'each country has the right to choose its own path to development...'"

As China helps Chavez expand his military, economic, and political power, the dangers for other democracies in the region will grow—most immediately in Colombia and over the long term in Central America.

Thus, the decision of Costa Rica's Arias to play his own part in abetting the expansion of a Chinese sphere of influence in Latin America may be profoundly dangerous of Costa Rica's own democracy, whatever the short-term economic benefits.

And it is not necessarily clear that a growing Chinese economy is good for Latin America. Ever since China joined the World Trade Organization, Mexico has been hemorrhaging manufacturing jobs, as companies more production to China (where labor rights are nil, and wages are far lower than in Mexico)—and thus significantly exacerbating the Mexican economic problems which cause illegal immigration into the United States.

At a June meeting in Atlanta of western hemisphere government and business leaders, El Salvador's vice-president remarked that "The participation of China in the WTO hit us particularly bad" including the loss of numerous agribusiness and textile companies and over 7,000 jobs.

"The small, poor Central American nation fought back by embracing U.S.-style capitalism and signing a free-trade pact with its neighbors and Washington. Escobar said those 7,000 jobs have been replaced with a more diverse, service-oriented economy including call-center jobs," reported the Atlanta Journal-Constitution.

There is much more that the U.S. could do to mitigate the spread of China's malignant influence in the Americas. As James Fallows observed in this month's issue of The Atlantic, "The United States is the only nation with the scale and power to try to set the terms of its interaction with China rather than just succumb. So starting now, Americans need to consider the economic, environmental, political and social goals they care about defending as Chinese influence grows."

A good starting point would be to re-energize efforts at expanding trade with South America, especially with Brazil and Argentina, which are South America's largest agricultural exporters and important potential buffers to the spread of Chavez's Marxism. Given the national security benefits of reducing U.S. oil imports from the dictatorships in Venezuela and Saudi Arabia, the U.S. should abolish its enormous tariff barriers against sugar cane ethanol from Latin America.

The U.S. free trade agreements with Chile in 2003 and with Central America countries and the Dominican Republic in 2005 (CAFTA) were a good start. But the broader Free Trade Area of the Americas (FTAA) fell apart in 2005, much to the delight of Hugo Chavez.

This spring, the U.S. and South Korea concluded a free trade agreement. Almost all the same economic arguments for the free trade agreement with South Korea are applicable to Taiwan. Taiwan is an eminently suitable partner for a FTA; the Heritage Foundation's 2007 Index of Economic Freedom ranks Taiwan as the 26th freest economy in the world, and describes Taiwan as one of Asia's "most dynamic democracies." (China, meanwhile, ranks a dismal 119th, with "egregious" corruption and very severe restrictions on investment freedom, financial freedom, and property rights.)

Unfortunately, the State Department bureaucracy has ignored Taiwan's repeated requests to negotiate a U.S.-Taiwan FTA.

Of course a U.S. free trade agreement with Taiwan would annoy China. But who put the Chinese dictatorship in charge of America's trade relations? The democratically-elected government of Taiwan has strict environmental, safety, and property rights laws, and Taiwan's free press serves as a watchdog for the enforcement of these protections. So—unlike with imports from China—American consumers can feel safe that Taiwanese imports will not be poisoned, and will not produced by the theft of intellectual property from Americans.

A U.S.-Taiwan FTA would also be an important diplomatic signal that the U.S. is not going to acquiesce in China's policy of expanding its sphere of influence at the expense of democracy. If China succeeds in imposing an Anschluss on Taiwan, the inevitable effect will be for Japan and the Philippines to move towards a more neutral, rather than a pro-American position. The Chinese military knows this, and that is one reason why Taiwan is the linchpin of their multi-decade plan to displace the United States as the major power in the Western Pacific.

President Kennedy's inaugural address promised: "To our sister republics south of our border, we offer a special pledge--to convert our good words into good deeds--in a new alliance for progress--to assist free men and free governments in casting off the chains of poverty." As the people of the people of El Salvador know, free trade with the United States is among the best ways to promote progress in fledgling democracies—in Latin America as well as in East Asia.

President Kennedy continued: "But this peaceful revolution of hope cannot become the prey of hostile powers. Let all our neighbors know that we shall join with them to oppose aggression or subversion anywhere in the Americas. And let every other power know that this Hemisphere intends to remain the master of its own house."

In resisting Soviet-Cuban attempts to impose communist dictatorships in El Salvador and Nicaragua, President Reagan carried out President Kennedy's vision. But today, as China assists the military build-up of a Venezuelan tyrant who aims to export dictatorship, the Americas are once again challenged by an Asian giant with plans for subversion in the Americas.

Whatever the strategic merits of President Carter's 1979 decision to cut formal diplomatic relations with Taiwan, the U.S. no longer needs to appease China in order to contain the Soviet Union. To the contrary, China has taken over the former Soviet role as the main external supporter of dictatorship and anti-Americanism in the Americas. It is time for Americans to begin a serious debate about whether American security interests are really served by the appeasement of China.

Dave Kopel is Research Director and Mike Krause is a Senior Fellow at the Independence Institute, a human rights think tank in Golden, Colorado, i2i.org.


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