Dove in the China Shop
Dave McCurdy has a running debate with his Mandarin tutor over the merits of will versus destiny. The United States, he insists, is a nation driven by the will of its citizens, which helps Americans find ways to solve problems and maintain a leading position in the world. China, by contrast, is driven by a sense of destiny, a belief that it will soon recapture the glory of past centuries. That's a powerful motivator, McCurdy believes--but not enough for China ever to eclipse the world's most creative, industrious societies.
Arcane musings, perhaps, except that China's growing economic, political, and military muscle has become one of the hot-button issues in Washington. A trade war with China, fought with tariffs, quotas, and ugly rhetoric, seems increasingly likely. In the pitched debate that's unfolding, McCurdy, president of the Electronic Industries Alliance, inhabits some lonely turf. Unlike most big-business advocates, he publicly proselytizes on the virtues of free trade and greater cooperation with the world's most populous country. While other business lobbyists operate in the shadows on China, careful not to take a stance that could end up on the wrong side of public opinion, McCurdy, whose trade group represents high-tech heavyweights like IBM, Intel, and Motorola, speaks with the passion of a missionary. "The U.S.-China relationship is the most important geopolitical relationship we must manage over the next 50 years," he says. "China has taken the right fork in the road in many areas. They're making decisions that are in our interest."
Many disagree, including numerous senators and representatives of both parties. Treasury Secretary John Snow has hammered China over its exchange-rate policy. Defense Secretary Donald Rumsfeld accuses China of surreptitiously building up its military, to intimidate democratic Taiwan, which China regards as a breakaway province, and ultimately to dominate Asia. Most of the companies EIA represents prefer minimal trade barriers that leave them free to hire the cheapest talent and sell their products wherever they can do so profitably. Part of McCurdy's job this year is to lobby against protectionist legislation that would impose tariffs on Chinese imports if the Communist leadership doesn't liberalize its currency. Another bill he's targeting would make it illegal for U.S. firms to do business with foreign governments that permit arms sales to China.
Party favors. The momentum, for now, favors McCurdy's opponents--few of whom have spent as much time learning about the mysterious Middle Kingdom as McCurdy has. The former Democratic member of Congress from Oklahoma has traveled to China a dozen times, meeting with local business people and Communist Party officials in Beijing, Shanghai, and many smaller cities. He speaks Mandarin well enough to give short speeches in China in the language. And he has seen firsthand how the Communist Party still pulls the strings, despite the nation's newfound capitalist prowess. While at an event with the mayor of Qingdao on one trip, McCurdy started to get antsy about catching a scheduled flight back to Beijing. "Don't worry," the mayor told him. Then he had the flight held for an hour, till his guest made it to the airport. "Local governments can open doors and make things happen," McCurdy concludes.
Such inside glimpses into China give McCurdy, 55, a perspective that politicians, answerable to constituents worried about the "offshoring" of U.S. jobs to China and the ominous implications of another Communist superpower, often lack. The bid by the China National Offshore Oil Co. to purchase U.S. energy firm Unocal, for instance, has triggered alarm in Washington. But McCurdy sees the gambit as fair game. Several U.S. banks and other big companies have bought stakes in Chinese firms, he points out. "You go to China and see Exxon stations, but when they come here, it offends the sensibilities of Congress," McCurdy says with a smirk. Yet he predicts that CNOOC will ultimately lose out to rival bidder Chevron, partly because Washington is tilted against such deals. In one poll he cites, by Zogby International, 59 percent of Americans held a favorable view of China, compared with just 19 percent of congressional staff members.
Free trade, in other words, is getting harder to defend. "McCurdy's more isolated than a couple of years ago," says Tom Donnelly, a Republican member of the bipartisan U.S.-China Economic and Security Review Commission. "That gung-ho rhetoric isn't as unquestioned as it once was." One reason is the red-blue political polarization that has rooted in Washington, which McCurdy himself decried in an article in Roll Call, the Capitol Hill newspaper. "The place is more rancorous, less civil, more partisan, more polarized, and definitely less friendly than when I first came to Washington, D.C., in 1981," he complained. The net result: "loss of meaningful debate" on trade, national security, and other vital issues.
But China is becoming a hard sell, too. Concerns have mounted along with the huge U.S. trade deficit with China, more than double what it was in 1999, when Congress granted China permanent favored trade status. The Chinese have also been prickly, among other things passing an "antisecession" law filled with bellicose rhetoric threatening Taiwan. Yet McCurdy, who chaired the House Intelligence Committee while in Congress, feels the best national-security policy toward China should revolve around commerce, not cruise missiles. "The economic integration between China and the U.S. is reducing the risk of military confrontation," he insists. While many of his former colleagues wring their hands over the CNOOC bid and China's large purchases of U.S. government securities, McCurdy sees it another way. "I'm glad they're doing that instead of building supercarriers," he says. At least for the time being, that is.
This story appears in the July 25, 2005 print edition of U.S. News & World Report.