Discussing trends emerging from China's global impact

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Pictured at the recent U.S.-China Economic Law Conference were (left to right) Prof. Gregory Fox, director of the Program of International Legal Studies at Wayne State University Law School; former U.S. Trade Representative Charlene Barshefsky; and panelists Julia Ya Qin of Wayne Law and Nicholas C. Howson, of the University of Michigan Law School.


By John Minnis
Legal News

The United States has already lost the economic war with China, according President Bill Clinton’s former U.S. trade representative, Ambassador Charlene Barshefsky, who delivered the lunchtime keynote address at a recent U.S.-China economic conference hosted by Wayne State University Law School.

The one-day U.S.-China Economic Law Conference was convened by the University of Michigan Law School, Wayne State University Law School and the U-M Center for Chinese Studies.

Wayne Law Dean Robert M. Ackerman and Professor Gregory Fox, director of the law school’s Program for International Legal Studies were pleased with the turnout for the conference and to hear Ambassador Barshefsky.

“The sad news is that this conference is too large to accommodate in the more attractive dining room upstairs,” Ackerman said from the larger, lower-level dining room in the McGregor Conference Center before introducing the speaker. “The happy news is this conference is too large to accommodate in the more attractive dining room upstairs.”

Barshefsky is a senior international partner at WilmerHale, a large international law firm with 12 offices, including those in Washington, D.C., and Beijing. She joined the firm after serving as the U.S. trade representative from 1997 to 2001 and acting as deputy USTR from 1993 to 1996.

As the USTR and a member of the Clinton cabinet, Barshefsky was responsible for negotiating hundreds of complex agreements with nearly every major country in the world. She is best known internationally as the architect and chief negotiator of China’s historic WTO Agreement.

Barshefsky spoke on “The Politics of Trade and Globalization: The U.S.-China Relationship.”

“It’s a real pleasure,” she said of being at the Wayne Law conference. “I came in during the last panel session. That was really quite impressive.”

She said her address was to discuss trade and politics “from 20,000 feet.”

“China’s role tends to dominate the global economic debate,” she said, “but China’s role is much more than that.”

She cited four trends coming out of China’s global impact.

First, China’s global activity has grown 10 fold over the past 50 years. The previous 10-fold increase took 200 years, she said.

She pointed out that globalization, of which China is a major player, has actually made the world a safer place. “The world doesn’t feel safer, but the truth is it’s much safer than ever before.”

She further pointed out that globalization prevented governments from resorting to protectionist measures at the height of the current economic meltdown, which allowed markets to work themselves through the downturn.

“There was very little protectionist activity during the financial crisis,” she said. “That was reflection of global integration.”

The second trend is China’s re-emergence as a world economic power. “That’s the biggest economic story of the century, in my view,” Barshefsky said.

She pointed out that a key area of China’s economic integration was with its five wealthy neighbors, including Japan, Korea and Taiwan.

“The juggernaut you see today is a function of the five enmeshed nations,” she said. “The growth of China over the past 30 years has been nothing short of astounding.”

Another factor is the improvement of Asian workers’ standard of living due to the economic rise of China. “One question one can ask,” Barshefsky said, “is are some Asian nations too dependent on China?”

Further, she said, China’s domestic policies, the “indigenitizing” of technology, is at odds with U.S. economic growth. Rather than copying foreign technology, China is quickly becoming a technology creator.

The third trend influencing China’s rise is an economically weakened West.

“The synchronous economic decline in all the developed nations means that there is no more cushion against further economic shock,” Barshefsky said. Fragility, slow growth, high unemployment and austerity measures now define the West, including the United States.

The forth trend a China-led global economy is the sharp disruption of settled businesses. “The shift in manufacturing has been going on for 40 years,” she said. “It has now hit the white collar sector.”

Further, there is a worldwide surplus of labor.

“The supply of labor has increased fourfold since 1980,” Barshefsky said. “Over supply of labor has become a problem across the globe. The global economic effect of all these trends is still unfolding.”

She said economic challenges for the United States include countering China’s continuing accretion of technology. “There is a greater concern about head-to-head competition with China,” she said.

Another challenge is China’s growing self-reliance; it’s declining need for foreign business partners at home and abroad. “China no longer has to be as accommodating to outside influence,” Barshefsky said.

She noted that Brazil and other countries are now organizing to fight China’s growing economic hegemony.

“The trends to my mind are quite profound,” she said. “To my mind, more profound than any of that has to do with the power balance in the world today. What are the implications of the end of U.S. dominance? That’s the issue to me that inspires admiration and fear. This will have profound implications on U.S.-China
relations for years.”

One student asked if Barshefsky had any regrets in negotiating the economic agreement with China, to which the former U.S. trade rep answered, “No.” She said she would rather have an economically strong trading partner than a poorer agressor.

One attendee asked if there would be more room for U.S.-trained attorneys in China, to which Barshefsky was pessimistic. “Most things in China are being indigenetized,” she said.

Bloomfield Hills attorney Jeffrey Paulsen, who has done business in China, was impressed with Barshefsky’s directness.

“She didn’t hold back any punches,” he said. “She was forthright and spoke her mind.”

Jerome Hill, senior vice president and director with China Bridge, an Ann Arbor consulting firm, agreed.

“Spot on. Spot on,” he said of Barshefsky’s address. “I found very few things I would disagree with. China’s going to be there, and I think people have to prepare
for it.”
 

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