Book Review by Jeff Ferry, CPA Chief Economist
This book by foreign and economic policy veteran Clyde Prestowitz would make ideal bedside reading for every member of Joe Biden’s cabinet. In crystal-clear terms and with a deep historical perspective, Prestowitz explains the threat posed to the US and the west by the Chinese Communist Party and the need for new American policies to address this threat to the entire free world.
Tracing Chinese history from ancient times to today, Prestowitz shows that China is determined to assume what it regards as its rightful place as the world’s most powerful nation, “surrounded by vassal states and barbarians from whom tribute may be exacted…an aim first enunciated by Mao Zedong and strongly implied by Deng Xiaoping’s injunction to `hide your light and bide your time.’”
Prestowitz documents the half century of disappointments and self-delusion practiced by US government officials as they increasingly opened the US up to Chinese trade, US investment in China, Chinese theft of American technology “crown jewels” on a monumental scale, and yet China refused to follow the model sold by US politicians of reforming itself to become more open, free, and democratic. He quotes Richard Nixon, who led the original opening to China in 1972 as saying late in his life, “we may have created a Frankenstein.” He cites the numerous US Trade Representatives before and after China won normalized trade relation status in 2001 who promised Americans China would change and reform and were left looking silly as they made excuses and explanations for China’s persistence in its exploitative ways. Where other political commentators debate the details of China’s trade and subsidy policies, Prestowitz spells out the larger picture and the danger to the US. After explaining how China’s ever-growing fleet of fighter jets are based on designs stolen from the US, Prestowitz writes:
“The CCP [Chinese Communist Party] is the most important entity in China—far more important than the government. The most powerful person in the world today is not the president of the United States but the general secretary of the Communist Party—Xi Jinping—who is also the direct head of the Central Military Commission…The Chinese armed forces, the PLA, is not run by the Chinese government but is an organization of the Party—and its mission is to protect the Party, not the nation….We all must stop thinking of China mainly as a source of inexpensive products and start wondering if we are feeding a machine that is increasingly threatening to ourselves and our values. We must recognize that we are in something much like the old Cold War. We of course do not want war, either hot or cold. But we must understand that the Chinse Party/state has effectively been acting as if it were at war with us. We must respond accordingly.”
Prestowitz speaks from ample experience with Asia. As a senior Commerce Department official in the Reagan and Bush administrations, he played a key role in US negotiations with Japan when that country’s exports were a major political issue here in the US. His negotiations were dismissed by most in the US technology industry, until he came back from Tokyo with agreements from Japan that they would buy tens of millions of dollars of US microchips. That agreement played an important role in Intel’s domination of the personal computer industry and led to support from Intel and other tech leaders for Prestowitz’s think tank, the Economic Strategy Institute. In this book he continues to advocate aggressive US economic policies to reduce the trade deficit and imports and rebuild US industry. He supports realignment of the dollar, support for key US manufacturing industries, and replacement of the obsolete Bretton Woods agreement with a new regime of international financial cooperation that excludes neo-mercantilist dictatorships like China.
The World Turned Upside Down by Clyde Prestowitz, available on Amazon.