What Japan and the Soviet Union can tell us about United States-China Relations
“When the value of the [foreign currency] is seriously distorted in relation to the dollar, this country cannot continue to act as though free trade is a reality.”
“Times have changed. And just as we can no longer tolerate the predatory practices of our trading partners, neither can we take American competitiveness for granted.”
“America will not be competitive again until we relearn the lesson that economic survival depends on government, labor, business and agriculture working together. The countries outcompeting us head in exactly the opposite direction, with comprehensive trade strategies and everyone pulling together.”
The above quotations are an excerpt from a series of op-eds published by the Washington Post about trade wars. But the target is not China, and the era is not the 21st century; the year was 1982, and the concern was Japan.
The United States' current trade issues with China have many parallels with the same issues with Japan in the 1970s and 1980s, when Japan was directly competing with the U.S. in the car and semiconductor market. Chip maker Intel, now mostly known for microprocessors, abandoned its computer memory manufacturing operations in the 1980s, blaming corporate espionage, predatory dumping, and copyright infringement by Japanese rivals like NEC. The U.S. has recently stopped just short of naming China as a currency manipulator. Similar sentiment was directed toward Japan in the late 70s and early 80s based on the actions of a Japanese government concerned about the effect of an appreciating yen on its export economy.
The competition between China and the U.S. for global influence and power echoes U.S. dealings with the Soviet Union. Kinetic proxy wars of the Cold War have shifted to cyber breaches and industrial espionage. Competing military invasions throughout the world have been replaced by military aid and defense commitments, and infrastructure projects under Belt and Road.
There are also key differences. Japan was, and continues to be a treaty ally, whereas China has less reason to play nicely with the U.S. But thankfully, there is even greater divergence from U.S.-Soviet relations. The Chinese and American economies are linked like the American and Soviet Union’s never were: China is the U.S.’s manufacturing arm, where a large portion of its consumer products are sourced from, and China relies on a managed peg to the U.S. dollar to maintain an effective renminbi. And although the U.S. and China have been entangled in ongoing cyber warfare, the military incidents between the two countries have been much less dramatic than those during the Cold War that seemingly saw the brink of nuclear war several times over events like the Cuban Missile Crisis, the shooting down of KAL Flight 007, and NATO exercise Able Archer 83.
Unlike the Cold War era where alignments were defined mostly as first and second world, many countries in Southeast Asia prefer to have productive relationships with both the U.S. and China. While competition between the two countries will continue, the fates of the U.S. and Chinese economies will remain inexorably linked for the definite future, and negotiation rather than escalation will be the likely outcome of recent U.S.-Chinese spats.