五月花写作组 ｜ 翻译：jiasen ｜ 校对：紫丁香 ｜ 编辑、美工、发稿：灭共小宇宙
CHINA’S RELIANCE ON THE UNITED STATES
While the United States relies on China in key areas, the knife cuts both ways; one country’s point of exposure is another’s point of leverage. Indeed, China’s fortunes are tied to the United States more closely than ours are to China, a fact that American strategists must keep in mind.
尽管美国在关键领域依赖中共国，但这是一把双刃剑。 一个国家的曝光点恰是另一个国家的制衡点。 实际上，中共国的命运与美国的关联，远比我们的命运与中共国的关联更紧密，这是美国战略家必须牢记的事实。
China relies on the United States to access high-end research and technology. It embeds agents in U.S. research and development institutions in order to acquire early-stage research at minimal cost and risk. Chinese firms then apply this research, scale it quickly, and compete with U.S. firms in the global marketplace on unfair terms. Qiaohai Shu of the China Academy of Social Sciences (CASS) explained the logic behind this strategy when he wrote, “Innovation is time-consuming, laborious and risky…but when it comes to applying technology, the opportunity cost to leap ahead is low, the chances of success are high.”
This strategy helps explain why China allocates only six percent of its R&D budget to basic research, while the United States allocates 17 percent.It also sheds light on why Beijing spends a whopping 84 percent of its R&D funds on experimental development while the United States spends only 63 percent.
Access to American research and innovation is therefore a central plank in China’s long-term economic, military, and political planning. Chinese strategists fret, with good reason, about a “high-tech blockade” that could slow the country’s economic development.
Washington could confound and disrupt the CCP’s economic strategy by ending this parasitic relationship. If China is denied access to U.S. research and high-end technology, such as semiconductors, it would have to make additional investments in basic research. These investments would be funded by a smaller economy with a more burdensome debt load— China’s total domestic debt was an estimated 335 percent of GDP in late 2020. Beijing would have to make these investments while simultaneously maintaining its proficiency in experimental development, rapid scaling, and production. This would tax China more severely than the status quo.
Foreign investment is another key point of reliance in the U.S.-Chinese economic relationship. U.S. real estate and equities are a safe harbor for Chinese companies and elites, although strict controls imposed by the CCP in 2017 to stabilize the balance of payments have curtailed capital flight.
American investment, meanwhile, plays a critical role in China’s economic rise. This investment lends legitimacy to the CCP, builds its industrial and technological capabilities, and creates a political constituency within the United States committed to preventing confrontation with the CCP. Reducing this investment would do material harm to China’s economy, international standing, and, potentially, the CCP itself.
Another related point of reliance is China’s ability to list companies on U.S. stock exchanges, despite its refusal to comply with the Security and Exchange Commission’s auditing standards. This refusal spurred Congress to pass legislation, co-sponsored by Senator Cotton and signed into law late last year, that delists Chinese and Hong Kong-based companies from U.S. stock exchanges if they fail to comply with audits by the Public Company Accounting Oversight Board (PCAOB). The combined market capitalization of the more than 250 Chinese and Hong Kong firms listed on U.S. exchanges is over $2 trillion.
Meanwhile, China’s access to the U.S. dollar and dollar-denominated trading system is another point of leverage for the United States. Because most dollar transactions clear through the American financial system, the United States has the power to block, hold, or otherwise intervene in many Chinese transactions.
China also depends on access to the U.S. market, which received 19 percent of China’s exports in 2018. The U.S. export market is an irreplaceable outlet for goods generated by China’s oversupplied economy. Though China has made efforts to accelerate domestic innovation and reduce its reliance on exports, it is a long way from matching the strength of U.S. innovation or becoming as self-contained as the American economy. The large trade surplus China runs with the United States is thus both a sign of China’s remarkable productive capacity and a potential weakness the United States can exploit.
This dynamic has important political implications because slower growth has the potential to cause internal discontent. Chinese citizens willing to accept an increasingly heavy-handed authoritarian state in exchange for a higher standard of living may think twice if growth slows or stagnates. As a result, the CCP fears that declines in exports, growth, and employment could pose political liabilities. Other domestic problems would intensify pressure on the regime. These problems include restrictions on home ownership, the absence of a humane welfare state, the inability of many Chinese men to find wives, and a lack of children to care for the elderly.The 90-million-member CCP may find it increasingly difficult to govern China’s 1.4 billion people if the economy stagnates.
U.S. policymakers must recognize the immense leverage they have over China. Having grown used to China wielding its domestic market as a weapon, many in the United States seem to have forgotten that U.S. market access is one of the most valuable prizes in the world, particularly for the world’s largest exporter. Access to the U.S. market may therefore be the single most powerful point of leverage in the entire competition, provided the United States can create resilient supply chains for essential goods that do not depend on Chinese manufacturing.
But time may be running short to exploit this opportunity. China’s economy is not as export oriented as it once was. Exports accounted for 36 percent of China’s GDP in 2006, but only 18 percent of its GDP in 2019. America’s window of opportunity to pressure China by restricting access to its market is closing.