China in the World Economy by Nicholas R. LardyReview by: Donald ZagoriaForeign Affairs, Vol. 73, No. 5 (Sep. - Oct., 1994), pp. 167-168Published by: Council on Foreign RelationsStable URL: http://www.jstor.org/stable/20046894 .

Accessed: 16/06/2014 10:16

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact support@jstor.org.

.

Council on Foreign Relations is collaborating with JSTOR to digitize, preserve and extend access to ForeignAffairs.

http://www.jstor.org

This content downloaded from 194.29.185.216 on Mon, 16 Jun 2014 10:16:24 AMAll use subject to JSTOR Terms and Conditions

Recent Books

The Politics of Social Transformation in

Afghanistan, Iran, and Pakistan.

EDITED BY MYRON WEINER AND

ali banuazizi. Syracuse: Syracuse

University Press, 1994, 488 pp. $45.00

(paper, $18.95). Each of these three Muslim countries

has undergone profound changes in

recent years. As the editors point out,

these states have been involved in attempts at extensive social engineering, often

with Islamic overtones. The individual

chapters concentrate on political elites,

the issue of redistribution and social

equity, and state policies toward women.

More could be done in comparing the

three cases, but the individual chapters are of high quality, and the reader can

pick and choose according to specific areas of interest. A valuable collection.

Asia and the Pacific DONALD ZAGORIA

China in the World Economy, by

Nicholas R. lardy. Washington: Institute for International Economics,

1994,156 pp. $16.95 (paper). This dense, information-packed mono

graph can be rewardingly read on several

levels. First, it explodes a number of myths about China, including the one that exag

gerates the size of the Chinese economy.

Second, there is an informative chapter on

economic issues in U.S.-China relations.

Third, in a stimulating concluding chap

ter, the author demonstrates that China is

already more integrated into the world

economy than Japan, Taiwan, or South

Korea were at comparable stages of their

economic development. More surpris

ingly, he argues that China, in some cru

cial respects, is more open than these

other Asian economies. This greater inte

gration gives China an enormous stake in

the evolution of the world economy and

has important policy implications for the United States.

Finally, Lardy s volume can be read as

a potent critique of U.S. policy toward

China. Instead of labeling China, along with Iran and Iraq, a "backlash state," as

National Security Advisor Anthony Lake labeled it recently, China should be treated as a

potential strategic partner. And when

China's behavior?in human rights, non

proliferation, or other areas?does not

meet acceptable international standards, this should be addressed by multilateral rather than unilateral sanctions.

Most importandy, Lardy (like Bresnan) demonstrates the inadequacy of Americas

present and planned national export strat

egy. The proposed funding for the U.S.

Export-Import Bank is far too small, much less than that offered by our Japa nese and European competitors. The

Clinton export promotion package does

not include explicit bilateral aid for China

comparable to Japan's. Moreover, because

of foreign policy sanctions, low levels of

official export finance, and regulatory bur

dens, the United States is losing huge amounts of potential exports worldwide.

In 1989 alone, the United States probably missed opportunities for five to ten billion dollars worth of exports to China in such

areas as chemicals, industrial machinery,

To order any book reviewed or advertised in Foreign Affairs, call 1-800-255-2665.

FOREIGN AFFAIRS September/October 1994 [167]

This content downloaded from 194.29.185.216 on Mon, 16 Jun 2014 10:16:24 AMAll use subject to JSTOR Terms and Conditions

Recent Books

electronic and electrical equipment, and

transportation equipment, instruments,

and related products. Lardy offers a num

ber of sensible suggestions for revising the Export Administration Act, the single

most important law governing U.S. export

controls, and he offers a number of sugges tions for promoting U.S. exports to China.

If the Clinton administration wants

to develop a more coherent national eco

nomic strategy that promotes U.S. exports, as it says it does, it should ponder the

ideas elaborated here.

An Emerging China in a World of Interdependence: A Report

to the

Trilateral Commission, by yoichi

FUNABASHI, MICHEL OKSENBERG,

and Heinrich weiss. NewYork:

The Trilateral Commission, 1994,

84 pp. $9.00 (paper). There is no greater challenge to the

Western powers in the post-Cold War

era than to develop a unified and realistic

policy toward the People's Republic of China. This report from the Trilateral

Commission goes a long way toward

providing the basis for such a policy.

Written by three prominent specialists? one American, one Japanese and one

European Asian?the report is sharply critical of Western (particularly U.S.)

policy toward China in recent years. It

deplores the "sporadic" attention to

China since Tiananmen, the "inconsis

tent signals," the failure to sustain high level dialogue, and the lost opportunities "to share and shape perspectives" and

help nurture the sense of responsibility that should accompany China's growing

great power status. The result of this mis

guided policy has been to force the West

to seek Chinese cooperation on "head

line-grabbing transitory issues"?such

as the Iraqi invasion of Kuwait, North

Korea's acquisition of nuclear weapons, or Beijing's treatment of specific dissi

dents?rather than to develop a shared

conceptual framework to illuminate for

the Chinese why it is in their interest to resolve the problem at hand.

The report argues that China should

be regarded more as an opportunity than

a threat, and it recommends a wide range of economic, strategic, and political actions that would facilitate China's

involvement in the world community. It

also urges that expectations be kept real

istic. All too often in the past, it points

out, Western powers have harbored unre

alistic hopes for China, and "China has been blamed for dashing the unrealistic dreams of others." China, the report con

tinues, is a great civilization with its own

history and traditions, and its path will

be shaped largely by internal forces and the choices of its leaders. In seeking to

incorporate China in the emerging world

order, Western leaders must recognize that China's leaders will govern their

country in accord with their own vision.

Consequently, the West will require great

patience and persistence, and the chal

lenge of incorporating China into the

world community will be a protracted one, involving decades and generations.

In sum, the challenge of dealing with

China requires what the American politi cal process seems incapable of develop

ing?a steady, long-term, consistent policy that sets out to weave China into webs of

economic interdependence, engage China

in multilateral security arrangements, and

maintain frequent and extensive high-level

[l68] FOREIGN AFFAIRS Volume73No.3

This content downloaded from 194.29.185.216 on Mon, 16 Jun 2014 10:16:24 AMAll use subject to JSTOR Terms and Conditions