President Obama's emphasis on climate change has notable
implications for U.S.-China relations. On her inaugural trip to
Asia, Secretary of State Hillary Clinton sought to expand the
Sino-American Strategic Economic Dialog to include climate change
among America's chief China policy priorities.
Making climate change a high priority is a mistake. It may
inject unnecessary hostility into the already-strained bilateral
relationship over what should be a secondary issue. And it rests on
a faulty premise: Many argue that the PRC will make sharp cuts in
carbon emissions but only if the U.S. does so first. This
claim borders on nonsense.
America Must Go First: A Flawed
The importance of American leadership is often neglected in
discussion of trans-Pacific matters. In climate change debates, it
is not neglected but twisted. The American climate change
leadership the Obama Administration wants Beijing to follow will
certainly not be successful due to moral concerns. The world is
littered with instances where American moral leadership has been
ignored or actively defied by the PRC--the Sudan genocide, Iranian
and North Korean nuclear programs, Burmese human rights repression,
and so forth.
Instead, the usually unexamined and always inaccurate assumption
behind the notion that China will follow the U.S. on climate change
is that it is question of economic competition--i.e., Beijing does
not want to harm the competitiveness of its firms with carbon
restrictions. This is certainly true, but it has nothing to do with
whether the U.S. is willing to harm the competitiveness of its
firms first. That is because U.S. firms are well down the list of
China's competitiveness concerns.
China's economic story is multifaceted. The bulk of it, though,
is captured in the creation and maintenance of conditions to
encourage relocation of East Asian output to the Chinese mainland,
primarily for the purpose of export. This extends from the initial
zones to draw capital from the Chinese diaspora for export back to
home markets starting in 1979 to the mass movement of
factories to serve the entire world as WTO >membership was finally secured in 2001. Chinese firms may be competing first and
foremost for the U.S. market, but they are competing
against other export platforms to the U.S. in East Asia and
around the globe.
Consider what would happen if China were to impose carbon-driven
restrictions on firms operating in China without the U.S. "going
first." This would not be to the principal benefit
of American companies. Rather, the relocation process would
reverse: East Asian firms would disinvest in China, moving
production to the second-most competitive regional location for
textiles, computer assembly, furniture, and other products.
Depending on the goods, this could be Vietnam, Bangladesh,
Indonesia, or others. These countries would then be the source of
the bulk of U.S. imports.
Perhaps more important, most American companies operating in
China would probably move not back home but to low-cost third-party
platforms elsewhere. Dramatic and effective American steps to
restrict carbon emissions would make all goods imported into the
U.S. more competitive but do nothing to alter China's incentives to
take the same steps. What would actually encourage the PRC to
impose carbon-driven restrictions would be willingness by Japan,
Korea, the Philippines, Central America, and other exporters to
impair their own competitiveness in the name of curbing
Jobs: China's Insuperable Barrier
Behind Chinese policies on competitiveness --indeed behind
almost everything involving the PRC--is the Communist Party's top
priority for 20 years and counting: jobs. The well-documented
demographic surge that precipitated the one-child policy has put a
generation's worth of pressure on the party to create jobs and
avoid socio-political instability. This is the main reason the
Chinese development pattern differs from its East Asian
predecessors: Beijing has been much more open to foreign investment
because the PRC's primary concern has been employment
generation--even more than economic nationalism.
This is why China has allowed the environmental devastation
already seen and why, despite its general view that
climate change is dangerous, Beijing will accept nothing that even
threatens to seriously inhibit employment. In his address to
Congress, President Obama cited China's new energy program as the
largest in the world. On some counts, this may be accurate. It
absolutely does not, however, indicate a willingness to genuinely
move away from high-emissions energy production.
The horrific health damage done by air pollution has been clear
in the PRC for more than a decade. Coal production was
declining at the end of the 1990s, while its effects were being
documented. Since then, however, coal output has nearly tripled,
and the reliance on coal in electricity and broad energy supply has
increased despite strong oil demand and touting of alternative
The party has been unwilling to protect the environment and
safeguard the health of its citizens in the face of possible job
losses even in recent, sustained periods of double-digit growth. It
certainly will not do so in the context of record job losses now.
Until the U.S. is willing and able to offer concrete assurance
of "green " jobs for China in numbers sufficient to offset those
lost in steel, cement, and other industries, bilateral negotiations
on this subject will for the next several years produce only hot
air. When America has so many other matters to discuss with the
Chinese--including those that will be sharply disputed--introducing
yet more grounds for confrontation is a dubious risk.
Where Real Environmental Progress Is
The wiser--and only effective--option for the U.S. is to shift
the emphasis from the here and now to the middle of next decade.
That is the time when substantial evidence may appear that the
demographic wave is receding. From around 2013, the
party will find it increasingly easy to maintain high employment.
Eventually, spot labor shortages will even appear, making
eliminating overcapacity in heavy industry an appealing goal rather
than something to pay lip service to while investing wildly. When
that happens, the PRC will be far more willing to sacrifice jobs
for the environment.
That is not to say there is nothing important to do in the
meantime. At the moment, China's greatest ecological challenge is
not air but water--which includes poor sanitation (despite rising
affluence) and poses a severe long-term threat to the food
Unlike restricting carbon emissions, cleaner water does not have
competitiveness implications that translate to fewer jobs. Given
the intense need for water in manufacturing, better water
supply--both directly in terms of water treatment and indirectly in
terms of feasible industrial output--actually translates to
continued competitiveness and more jobs. American assistance on
carbon emissions is seen by the party almost entirely through the
lens of capturing the job growth prospects of environmental
technology. While this perspective will be a factor for water
issues, immediate benefits of water-saving and water-cleaning
technology for employment in China will make bargaining much more
The environment can certainly be part of broader Sino-American
cooperation, but such discussions must be focused on the longer
term and not on carbon emissions.
Scissors, Ph.D., is Research Fellow in the Asian Studies Center
at The Heritage Foundation.