Patrick Mendis. The Eagle and the Dragon

April 21, 2016 Americas, Analysis, Asia, East Asia, Economics, North America, Perspectives, Politics

When George Washington appointed Alexander Hamilton and Thomas Jefferson to his administration, the president could not have picked two people who were more diametrically opposed. Hamilton, the Secretary of Treasury, distrusted popular sentiment, advocated a strong centralized government, and embraced manufacturing and commerce. Jefferson, the Secretary of State, on the other hand, believed in agrarian virtues, popular sentiment, and the ability of the people to govern themselves.

Thus, the evolved principle guiding foreign policy has largely but selectively been gravitating around the notion of “Hamiltonian means to Jeffersonian ends.” The “realistic” nature of Hamilton’s industrial and economic policies made the young republic to be a commercially sustainable nation for Jefferson’s “idealistic” vision of equality and liberty to succeed at home and abroad. In the process, the unifying spirits of these two unlikely partners were an evolution of the most powerful and democratic nation on earth in cultural, economic, military, and political spheres.

The Accidental Democracy

The American experience has always been an evolving process in the land of Native Indians. When the colonists first arrived in Jamestown, Virginia, they had a more violent relationship with the native tribes than the Pilgrims who landed years later in Plymouth, Massachusetts. The commercially-driven colonists were possessed of a rugged individualism and entrepreneurial spirit. Similar to his own background and determination to succeed, Hamilton likewise promoted the mission of the colonists in his manufacturing and trade policies. Meanwhile, the plight of Pilgrims as victims of religious persecution in Europe steered them to collaboratively seek religious liberty and democratic freedoms in America. This vision appealed to Jefferson who vigorously advocated public education, religious freedom, and democratic ideals.

These visions, however divergent, were influenced by the works of the same philosopher, Adam Smith. In his Theory of Moral Sentiments (1753), Smith highlighted sympathy for other people in their varied personal circumstances, cultural beliefs, and religious persuasions. Influenced by these views, Jefferson championed religious freedom and led the fight in Virginia for the “disestablishment of the Anglican Church” (the separation of church and state), which he later referred to in his autobiography as “the severest contests in which I have ever been engaged.” He was also the most vocal in his support for having a Bill of Rights in the US Constitution when it was drafted.

Hamilton, on the other hand, was influenced by Smith’s Wealth of Nations (1776) and his historic analysis of economic development in the British Empire and adamantly supported the nascent Wall Street to drive the financial engine of the republic. The founder of the Bank of New York, Hamilton also favored friendly trade relations with Britain, which were opposed by Jefferson. With his sheer determination, Hamilton directed the world’s most consequential and commercial republic with his economic policies, a centralized federal government, a national banking system, and a strong blue water navy and US Coast Guard to protect American shipping.

Despite being opposites in philosophy and upbringing, Jefferson did agree on one thing with Hamilton: commerce should be the driver and protector of the republic. “Commercial republics, like ours, will never be disposed to waste” assured Hamilton. Likewise, Jefferson suggested that, “Commerce with all nations, alliance with none, should be our motto.” The Commerce Clause in the US Constitution, which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes,” solidifies the power of commerce that binds the nation together.

Commerce was the founding vision of the global nation of immigrants intending to unite the world. Neither religion, ethnicity, nor language was proven as a force for unity in colonial America, especially when the ethnically diverse Catholics in Maryland, Presbyterians in Virginia, Protestants in New England, and Quakers in Pennsylvania lived in territorial harmony, speaking various languages in addition to the Native Americans. Indeed, President Washington counseled future generations that “Our commercial policy should hold an equal and impartial hand” in conducting Jeffersonian-like democracy promotion in foreign policy while promoting the wealth-creating vision of Hamilton.

Hamiltonian policies, therefore, laid the foundation for Jefferson to achieve his vision of religious and democratic freedoms in creating the “Empire of Liberty.” Jefferson, as the third president, expanded the territorial size of the United States with the Louisiana Purchase. The annexation of much of the Western United States followed by the Oregon Territory, the Texas Annexation, and the Mexican Cession. Later, the idea of Manifest Destiny began to refine America’s evolving mission in the world. For many Americans, the vast stretch of land was a gift from God, and His purpose for the nation was to promote America’s founding ideals of freedom and democracy from the Pacific shores to the Hawaiian Islands and the Philippines, even if it required a considerable amount of brutality along the way. But, the underlying motivation continued to be the commercial and trade interests of Hamiltonians.

In other words, the Jeffersonian vision could not have been achieved without first transiting through the Hamiltonian mission. But this was not achieved without a number of heroic struggles. The daunting issues of slavery and the equality of women were taken off the negotiating table by the Founding Fathers and relegated to succeeding generations. While they were partially resolved through the Civil War and Women’s Suffrage Movement, many issues continue to this day. The point being, that while the United States is a thriving liberal democracy today, it has had its own history of oppression and violence. Therefore, policymakers and American government officials should think carefully before lecturing others about their human rights violations. Indeed, one might ask why some countries are cherry picked for these accusations today, while other countries that practice these same abuses are conveniently ignored.

It was not until 1917, on the eve of America’s entry into World War I, that the notion of Jeffersonian democratic ideals gained formal recognition and were put into practice. In seeking a Declaration of War against Germany before a joint session of Congress, President Woodrow Wilson advanced the idealism of Jefferson, announcing, “The world must be made safe for democracy. Its peace must be planted upon the tested foundations of political liberty. We have no selfish ends to serve. We desire no conquest, no dominion.” Yet, the United States has largely been a Hamiltonian nation with competitive spirits and economic policy innovations while promoting Jeffersonian ideals of democracy, human rights, and religious freedom.

Rebalancing Toward China

Continuing this tradition, President Barack Obama’s Asia pivot strategy involves moving American naval forces to the Pacific as part of his “conengagment” (both containment and engagement) policy toward China. Military resources are being increasingly used to contain assertive China while engaging Beijing on economic, human rights, and diplomatic initiatives. President Obama’s former national security adviser, Thomas Donilon, acknowledged that the White House has employed the “elements of both cooperation and competition” in cementing Sino-American relations.

To date, for example, the Obama White House and China have reached a multi-party nuclear deal with Iran, and have also concluded an unprecedented global climate change accord in Paris. Recognizing China’s advancing importance in America’s “backyard” and increasing inflows of investment and trade in the Caribbean basin countries, the Obama administration changed its long-standing policy toward communist Cuba. The United States and China have also successfully pushed forward a strong set of UN sanctions against North Korea for violating the international nuclear testing agreements, despite Beijing’s reluctance to take a more forceful position with its neighbor. In the South and East China Seas, the United States and China exercise forceful but restrained actions that have involved America’s new friends and traditional allies like Japan, the Philippines, and Vietnam in the contested waters.

Simultaneously, Washington and Beijing are pursuing over eighty bilateral channels of communication, including the US-China Strategic and Economic Dialogue, the Military-to-Military Mechanism, and the Bilateral Investment Treaty negotiation. The United States Federal Reserve Bank even assisted the People’s Bank of China in 2015 to deal with its stock market plunge by sharing its own playbook from the 1987 crash during Wall Street’s “Black Monday.” Above all, President Obama’s Trans-Pacific Partnership (TPP) policy with eleven other Pacific-rim nations is proceeding in parallel with Chinese President Xi Jinping’s One-Belt, One Road (OBOR) trade and investment strategy in Asian, European, and Pacific countries.

In all this, economic engagement is more effective strategy than involving the military containment and potential naval blockade of China’s oil and materials flows through the South and East China Seas. Such containment in the contested sea of Chinese-rebuilt artificial islands in the Paracel and Spratly archipelagoes has negative economic implications not only for China and its neighbors but also for US businesses and consumers. American defense planners may have also overlooked the fact that the primary trade and investment drivers of economic engagement with China are steadily helping Beijing to narrow its power gap with Washington, especially through the increasing defense expenditure and modernization of Chinese military. Eventually, it is counterproductive to have a costly military strategy of containment as Beijing increases its military budget to match the American force posture as the security guarantor to its regional allies, from which China has also benefited. The other forward and backward linkages of economic engagement, especially through people-to-people interactions, tourism, and student exchanges, make a win-win economic growth and produce an increasingly larger middle class who will demand greater democratic freedoms as China becomes wealthier. In fact, the containment component may not only have drained the limited US resources but has also antagonized the Chinese people and party officials who have now turned to America for the Jeffersonian freedoms of religion, press, and assembly.

Does American History Repeat Itself in China?

Looking at China’s history since the end of World War II, China has undergone a similar to that of the American experience but more transformative process with Chinese characteristics. The death of Mao Zedong in 1976 ushered in his long-time fellow revolutionary Deng Xiaoping. Mao had overseen the destruction of Confucian China, but this destruction provided an opportunity for Deng to set a new course for the nation. Far from an advocate of Western liberal democracy, Deng nonetheless was not willing to mortgage China’s development and modernization for Mao’s continuous Cultural Revolution (1966-76). Declaring a “socialism with Chinese characteristics,” Deng abolished communes and promoted provincial autonomy, liberalized trade and manufacturing policies, centralized government power, strengthened the state-owned banking system, and began to develop an increasingly powerful maritime military force.

China’s Hamiltonian turn has now produced more billionaires in China than in the United States. Other than the total defense expenditure, China has surpassed the United States in every other major indicator of economic development, including the per capita income on the basis of purchasing power parity, the total number of cars on roads, the skyscrapers, and the high-speed railway system. China also has an ever-growing middle class that is larger than the United States’. This growth, however, has come with all the attendant woes that associated with rapid trade liberalization: widening inequality, rampant corruption, wide-spread pollution, and a host of other social issues that now face President Xi Jinping.

The dynamic forces of Sino-American commercial intercourse have significantly boosted the quality of life around the world and helped lift millions of Chinese out of poverty while providing lower-cost goods for US consumers. This time-tested founding commercial vision is critical for global development and poverty alleviation. Indeed, improving the life of the average Chinese and expanding the middle class will not only contribute greatly to domestic consumption, but also promote American exports; two key issues about which economists are particularly vocal.

In the current US presidential elections, candidates who advocate protectionism and beggar-thy-neighbor policies are suffering from either amnesia, a complete ignorance of American history, or pure selfishness. Indeed, former Treasury Secretary Henry Paulson has indicated that those hoping for China to fail had better be “careful what they wish for” because China has been a “significant contributor to global economic growth, which has benefitted all of us.” China’s economic failure could cause significant damage to the global economy, leading to “political instability that would further rock the markets.” Our Founding Fathers’ commercial assignment gave birth to a global vision to be “the shining city upon a hill.” This sort of American exceptionalism should not only be extended to others in the world as the American people enjoyed the same freedoms in their development, but also allowing for free commerce with China is itself an extension of America’s vision around the globe.

The American Vision, The Chinese Mission

President Xi has now advanced Deng’s vision with his own “Chinese Dream”: the OBOR trade and investment plan. Like the United States’ Monroe Doctrine, Xi also asserts China’s territorial integrity with its “nine-dashed line” that encompasses the contested Scarborough Shoal (with the Philippines) and the Paracel and Spratly archipelagoes (with the Philippines, Vietnam, and other neighbors) in the South China Sea as well as the Beijing-declared Air Defense Identification Zone, covering the Diaoyu Islands (Senkaku, as claimed by Japan) in the East China Sea.
The driving force behind all this is China’s own Manifest Destiny, which President Xi claims runs through the ancient Silk Road. Comparable to America’s westward journey to the Pacific Ocean, China’s Manifest Destiny is reflected through its long history and the mythical novel “Journey to the West” published in the sixteenth century during the Ming Dynasty. The novel was inspired by the recorded events of a nineteen-year overland journey to the western regions (i.e., India and Afghanistan) by Buddhist monk Xuanzang (602-664) during the Tang Dynasty. This dynasty is proudly known among the Chinese people for creating a Cosmopolitan China with significant commercial, religious, and cultural engagements with the peoples of the Silk Road.

For President Xi, the Hamiltonian-like OBOR vision consists of two pathways: First, the northern route of the New Silk Road (Belt) that originated from the ancient capital of Xian is being revived with the high-speed railroad and airline networks that primarily goes westward beyond Central Asia and Russia to Western Europe. Second, the southern route is known as the Twenty-first Century Maritime Silk Road that extends from Shanghai and Hong Kong through the South China Sea to China’s “Western Sea” (i.e., Indian Ocean) to Africa and the Middle East and beyond.

The synergetic driver of both US-led TPP and Chinese OBOR strategy of going westward was trade and commerce. For example, the English colonists arrived in Jamestown under the Charter of Virginia Company of London had a clear order that they must seek “a shortcut to China.” The James River was where the United States began her tumultuous journey westward. Later the Lewis and Clarke Expedition under President Jefferson inspired American mindsets to expand westward “for the purposes of commerce.”

Likewise, President Xi’s Maritime Silk Road is a restoration of Admiral Zheng He’s legendary voyages that promoted China’s tributary system and goodwill commercial diplomacy in the Ming Dynasty. Long before Christopher Columbus discovered America, the Chinese imperial eunuch Zheng led seven expeditions (1405-33) for the Ming emperor that reached more than 30 countries in Southeast Asia, Indian Ocean, and in Africa and the Middle East. The president’s terrestrial route is a revitalization of the ancient Silk Road that evolved from the Qin Dynasty and reached its pinnacle in the Tang Dynasty.

Against this backdrop, President Xi has also launched a new international development bank to realize his OBOR strategy. It is seen as a rival to the US-led World Bank. Despite repeated opposition from the Obama White House, many US allies—including Australia, Britain, France, German, India, Italy, the Philippines, and South Korea—have agreed to join the Asian Infrastructure Investment Bank (AIIB) in recognition of China’s growing diplomatic importance and commercial power. In July last year in Shanghai, China also launched a new BRICS Development Bank with representatives from Brazil, Russia, India, and South Africa.

In the meantime, President Obama maintained at his final State of the Union Address in January that “people of the world do not look to Beijing or Moscow to lead; they call us.” The early success of the AIIB belies this worldview, especially when the Hamiltonian vision of commerce has evidently pushed Beijing’s mission forward as the Japan-led Asian Development Bank as well as the World Bank have both agreed to collaborate with AIIB. Certainly, this point was not lost on President Obama’s former economic advisor Larry Summers when he indicated in April 2015 that “This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system.”

The New Power Relations

The Beijing-based AIIB intends to change the rules of international development finance and global governance. For example, the American-led “Washington Consensus,” characterized by the structural adjustment programs of the World Bank and the International Monetary Fund (IMF), promoted greater economic freedom and trade liberalization. The emergence of the “Beijing Consensus” does not have conditions attached to its loan programs for infrastructural development projects that invest for the purpose of “global connectivity.”

China today has become an increasingly global force in trade, investment, and diplomacy despite President Obama’s continued reference to America as the “indispensable nation.” While this is still true, the military component in his “conengagment” policy toward China would undermine the solutions to the growing budget deficit and national debt as American allies ignore Washington in favor of economic rendezvous with Beijing. Even as the Obama White House purposefully excludes China in the twelve-nation TPP community, for example, Beijing now has a number of bilateral trade agreements with US allies like Australia and South Korea, and is in the midst of negotiations with Japan. Securing its Renminbi currency as a global reserve at the IMF, China’s trade and investment reach is now undeniably global. President Obama upholds that the United States “can’t let countries like China write the rules of the global economy.” Yet, by its own ideological and counterproductive policies, it has done just that.

President Obama’s rhetoric about Chinese actions in the South China Seas have fared no better. Soon after the president criticized China in February for “resorting to the old style of might makes right, as opposed to working through international law and international norms” at the California summit meeting of the Association of Southeast Asian Nations (ASEAN), the Chinese military responded by deploying surface-to-air missile launchers on Woody Island in the Paracels. While the United States continues to exercise the freedom of navigation through these contested waters, it is clear that the ASEAN region will remain an extremely sensitive and challenging issue for the next American president.
The Jeffersonian Endgame?

As a new US administration comes into power in January 2017, President Obama’s policy of “rebalance” to Asia must be revisited by reflecting on American and Chinese history—neither through pure political ideology nor human rights advocacy and democracy promotion, which materialized in the US after a series of struggles on slavery, Native Americans, women, and now gender issues. The intaglio on the National Archives building in Washington, DC, asserts “What is past is prologue.” This is instructive because looking at our “past” commercial relationship is the key to reviving the founding vision of commerce, which officially began with the sailing of the first US ship, the Empress of China, from New York Harbor to Canton, the modern day Guangzhou, on George Washington’s birthday in 1784. Distancing from Europe’s colonial powers, the initial US actions give fairly good insight as to what that prologue will be for the two nations. Responsible policymakers on both side of the Pacific must develop objective and practical strategies to improve the lives of their citizens, not pander to economic nationalists and special-interest groups.

Far from being apologists for China’s human rights practices, policymakers all know that this issue is not much more than yet another rhetorical device for battering China. President Calvin Coolidge once said that the “business of America is business.” This tenet remains true, and from this perspective, the concrete benefits of good trade relations trump the abstract benefits of meddling in internal Chinese human rights practices. This was already proven with the renewal of China’s Most Favored Nation status in 1994 when it delinked human rights from commercial intercourse.

Like America’s other allies who have a perennial record of human rights violations and religious extremism, such as Saudi Arabia and other Middle East allies, the new American administration needs to work with cultural sensitivity toward the oldest surviving civilization-state in the world. The 87-million members of the Communist Party of China (CPC) are committed to preserving China’s unique, time-honored Confucian heritage. Their growing confidence is reflected in the fact that that more than 110-million Chinese have travelled to more than 150 countries last year (compared to only 73-million US citizens travelling overseas) and that more than a quarter million Chinese students are studying in US universities and colleges (contributing over $10 billion a year to the US economy). The United States’ national debt to Beijing (over $1.2 trillion) is being reinvested by the Chinese in America and elsewhere. The evolving and ever complicated Sino-American links are deepening as trade and investment opportunities proliferate.

As Lawrence Summers has indicated, “American leadership must have a bipartisan foundation at home, be free from gross hypocrisy, and be restrained in the pursuit of self-interest.” If America wants to advance its founding mission with China, it is better to have a strong, stable, and prosperous China. To try and lecture China about democracy promotion based upon multi-parties and election cycles makes little sense, least of all to the Chinese. This makes even less sense when one considers all of the domestic issues currently facing the US and its foreign policy on global terrorism, immigration, and welcoming refugees. To suggest that Western-style democracy can simply be scaled to a country with the size and social complexity of China is simply chimerical. In any event, the United States has not done a great job of convincing China otherwise lately.

To put this in context, it is worth remembering that in the process of modernization, Deng had sought to preserve one-party rule not because of the perks that came with power but “because he believed the alternative was anarchy.” Former Secretary of State Henry Kissinger reinforced this viewpoint when he indicated that there have been numerous occasions in Chinese history, especially the past two centuries, where the splintering of political authority showed promise of increased liberties, but instead, tempted social and ethnic instability, and was hijacked by the most militant rather than the most liberal elements. One needs only to think about the history of Chiang Kai-Shek of the Republic of China (Taiwan) and Mao Zedong.

A Democratic Union of Confucian China

Beijing’s current thirteenth five-year plan includes following the “guidance of Deng Xiaoping’s theory” and the implementation of Xi Jinping’s new “Four Consciousnesses” movement of “ideology, the whole, the core, and the line.” Within this movement, absolute loyalty to CPC and its leader is being further solidified to preserve the order of the day, and President Xi collectively intends to: a) improve macroeconomic policies that “strengthen supply-side structural reform to drive sustained growth,” which includes the reinforcement of the protections of intellectual property rights; b) increase domestic demand to accelerate development; c) modernize agriculture and increase rural incomes; d) respond to the dynamics of international economic cooperation and competition by opening up and working to achieve mutually beneficial win-win cooperation; and e) improve environmental governance and “strengthen social development to promote people’s wellbeing,” including the promotion of new businesses, fairer access to education, reform of medical services, and building a “tightly woven social safety net” and improve the quality of government services.

These reforms are not just idle words for public consumption. The failure to carry out this plan will not only prompt doubts about whether or not CPC is capable of achieving reform, but it also will throw into question their very existence and legitimacy. The five-year plan alludes to this point when it declares that “The wishes of the people should always determine the aim of our governance; we must do our utmost to deliver a strong performance in our work and never fail to live up to the great trust the people have placed in us.” The success of this plan will require China to cooperate with the international community on myriad levels. American engagement in this process will not only improve cooperation in Sino-US relations, but also increase the relative competitive edge of both for a better world through policy innovations, as if they were activing more like Hamiltonian Chinese and Jeffersonian Americans.

The growing aspirations of millions of Chinese, along with the dynamic forces of people-to-people exchanges, growing corporate interests, in a world of modern communications, has already unleashed a neo-Hamiltonian vision initiated by Deng Xiaoping for a democratic but uniquely Confucian China, which was once the inspiration for the Founding Fathers of the United States. Like the United States, China will eventually democratize, but it will democratize in its own time, with its own distinct characteristics, and more importantly, from the internal pressures exerted by its own Jeffersonians, who have already tasted the joy of democratic freedoms as Chinese party officials, tourists, and students abroad.

Patrick Mendis
Patrick Mendis, a Rajawali senior fellow of the Kennedy School of Government’s Ash Center for Democratic Governance and Innovation at Harvard University, is the author of Peaceful War: How the Chinese Dream and American Destiny Create a Pacific New World Order (2014), Commercial Providence: The Secret Destiny of the American Empire (2010), and Trade for Peace (2009). He served as a Pentagon professor and US diplomat during the Clinton and Bush administrations, and is currently serving as a commissioner to the US National Commission for UNESCO, an appointment by the Obama administration. Visit his website at The views expressed above are his own and do not necessarily represent the views of the Harvard Kennedy School or the United States Government.


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