July 28, 2020
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David Firestein, president and CEO of the Houston-based George H.W. Bush Foundation for US-China Relations, believes that “the United States, like China, has benefited from the US-China engagement” in the past 50 years.
He was speaking in response to an address delivered by Secretary of State Mike Pompeo at the Richard Nixon Presidential Library and Museum in California last week in which Pompeo accused China of “trade abuses that cost American jobs and strike enormous blows to economies all across America” and “sucked supply chains away from America”.
Firestein said he does not endorse the view he called now dominant in both major American political parties that engagement with China represents a failed policy and that the US has derived no benefit whatsoever from engaging with China over the last 50 years.
“A fairly narrow and simplistic, but still compelling, way to make this point is simply to ask those Americans who have held US stocks or mutual funds over the last 30 or 40 or 50 years — and almost half of US households have in fact owned equities since the year 2000 — ‘What was your investment portfolio worth in 1970, 1980 or 1990? And what is it worth today?’” he said.
Firestein said that many of the most vocal critics of US engagement with China today are wealthy elites who have long benefited financially from investments in US companies that have grown and succeeded in large part by engaging with China.
“There is a lot of hypocrisy here,” he said.
According to a 2018 MarketWatch report, from before the US-China trade war reached its current state, the top 20 US companies in the S&P 500 with the highest level of sales in China — led by Apple and Intel — reported total sales of $158.4 billion to China.
“Disengaging from China in the way [the Trump] administration envisages would undermine important US national security interests and bring significant economic hardship to a large swath of the American people,” said Firestein.
He said the US goal of getting to a place of greater reciprocity in its relationship with China is appropriate, but the issues are not being addressed in a meaningful way.
“There are many self-evident, glaring asymmetries in the relationship that need to be rectified. The problem with the Trump administration’s approach is that the so-called solution to this problem has ended up being considerably worse than the problem.”