Treasury Secretary Janet Yellen traveled to China recently and capped off her four-day visit by holding a press conference where she proceeded to scold China for its economic policies and relationship with Russia. Secretary Yellen’s visit, intended to improve economic ties, may have worsened U.S.-China relations. If we truly desire peace, America would be wise to abandon the isolationist policies of bellicose lectures, perpetual sanctions, and bans on internationally owned companies, and instead embrace the peaceful influences of commerce and active diplomacy.
Perhaps unaccustomed with the traits associated with a gracious guest, Yellen reprimanded Beijing for its investment decisions. Specifically, Secretary Yellen cited China’s surging exports of state-subsidized green energy related goods, including electric vehicles, solar panels, and lithium batteries, as threats to American jobs and businesses.
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Many Americans may find themselves confounded by such blatant hypocrisy. The Biden administration, which for three years demanded everyday Americans move toward the use of renewable energy, is now criticizing China for providing those same Americans options to purchase affordable green energy technology.
If we are to believe the scores of climate alarmists within the Biden administration that without immediate action the planet will undergo irreparable harm, then what difference does it make where our salvation, i.e. green technology, originates from?
Chinese Premier Li Quiang was quick to highlight this obvious point, saying that “the development of China’s new energy industry will make important contributions to global carbon neutrality efforts.”
Secretary Yellen also issued a stark warning to China that the U.S. remains determined to stem the flow of material support to Russia’s defense industrial base. The Secretary issued a threat that the United States will sanction Chinese banks, companies, and individuals that facilitate transactions to channel military or dual use goods to Russia.
This is a laughably empty threat. The U.S. already imposes hundreds of sanctions on China in response to a wide array of transgressions, ranging from human rights violations, illegal fishing practices, drug trafficking, and the continued relations between Chinese companies and Iran, North Korea, and Burma, to name a few. No matter how many sanctions America slaps on China, Beijing does not alter its behavior to Washington’s liking.
The history of sanctions is a history of failure. The U.S. sanctioned Cuba for over six decades, and the Communist Party still rules the island. Sanctions did not alter the behavior of adversarial regimes in Iran, Iraq, and North Korea. Despite the fact that the West imposed over 16,500 sanctions in an attempt to cripple the Russian economy, the Kremlin’s war machine still occupies much of eastern Ukraine.
The one thing sanctions have achieved is helping China build the alliances it might need to effectively challenge the United States. The Washington foreign policy establishment’s complete lack of strategic foresight has pushed Russia further into the arms of China—creating a situation where the other two great powers in the international system are strategically aligned against the United States. This sort of scenario kept American strategists up at night during the WWII and the Cold War. Now it has become common terminology of the Washington, D.C., uni-party to lump China and Russia into a new axis of evil—unironically revitalizing the term that overshadowed the George W. Bush administration’s disastrous foreign policy.
Some of my colleagues in the Senate seem to insist that China must be an adversary, but Washington’s reflexive antagonistic posture toward Beijing has caused us to forget long-understood truths about how to promote peace and prosperity.
Commercial exchange
The voluntary act of commercial exchange, by definition, results in mutual and reciprocal gain. Trade encourages human interaction, which in turn encourages respect for people of different perspectives and cultures. An increase in trade between two countries correlates with a lower chance that they will go to war. A 2016 study published in the Review of Development Economics confirmed that “an increase in bilateral trade interdependence significantly promotes peace.”
The peaceful influence of commerce has long been understood. Montesquieu, famous for helping inspire the constitutional principle of the separation of powers, wrote, “Commerce cures destructive prejudices.” The 19th Century British statesman Richard Cobden argued for the morale necessity of free trade because it draws “men together, thrusting aside the antagonisms of race, and creed, and language, and unit[es] us in the bonds of eternal peace.” By never missing an opportunity to demonize China, American policymakers spurned prospects for reducing tensions and all but ensure an adversarial relationship with a rising power.
But conflict with China is neither desirable nor inevitable. Reducing trade barriers, removing sanctions, and re-establishing high-level diplomatic and military communication channels are just a few carrots the United States can employ to facilitate an improvement the U.S.-China relationship.
Yet, the Biden Administration seems committed to a sticks-only approach. Secretary Yellen’s audacity to tell foreign country how it should run its economy, what sectors the government may subsidize, what countries it can conduct business with, and then threaten economic retaliation if it does not comply, is the height of Washington hubris.
The U.S. would not tolerate such behavior if it the roles were reversed, and we should not be surprised if Secretary Yellen, on President Biden’s behalf, further damaged U.S-China relations.
Trade with China is no guarantee of peace, but the isolationists who insist that there can never be enough punishment inflicted upon Beijing renders hostility a certainty. Any path toward improved relationship will require, as we have long known, trade and diplomacy with China.
Sen. Rand Paul, R-Ky., is the ranking member on the Senate Committee on Homeland Security and Government Affairs and its on other committees including the Senate Committee on Foreign Relations.
