By Tom Plate
They're both up against it now.
They looked over the precipice and gasped at the steepness of the drop. They looked down at a desert of dashed hopes and old skeletons, scraping the bottom of the canyon. This is where a failed U.S.-China relationship could wind up.
It does look like a very long way down. But gravity would make it a fast trip . All it would take is a cliff-edge miscalculation or a loss of balance by one or the other and there could be a huge geopolitical slip. China and the United States, the odd couple of the first half of the 21st century, would be at the bottom of the canyon of international stability.
It was that breathtaking possibility ― that arid abyss ― that caught the attention of the two leaders of China and American in Beijing earlier this week.
U.S. President Barack Obama was on the third leg of his Asia tour, after first hitting Tokyo (its long-time Asian ally) and then Singapore for an international meeting. All smiles, but little evident warmth, Chinese President Hu Jintao greeted him for a four-day stay in China.
Afterwards, many media assessments of the summit were gloomy. They said the leaders of the two giant countries were talking past, not looking at, each other ― not, in effect, communicating.
That's hard to believe. Both Hu and Obama are smart ― and they are smart to be wary. The modern-day China-U.S. relationship is in its early chapters: remember the international reaction to the 1989 Tiananmen Square incident? It was so ugly that it kept American Presidents from even attending summits in Beijing until Bill Clinton was able to break the ice in 1998.
And today all of the issues are tough. They've got to figure out the mess in North Korea, which has scraped together a handful of nuclear bombs and consider Iran, which wants to them too. Beijing itself has Muslim agitations on its western edge and a tense Tibet that somehow touches nerves and hearts all over the world. Washington has Iraq to get out of, Pakistan to get more involved in, and Afghanistan to make a major decision about. Sticking with the same-old-same-old hasn't been working recently.
But hanging over these issues is the question of the Chinese and American economies. Both have serious problems ― and in many respects are quite different. Their currencies are intertwined, almost like the famous DNA double helix.
Fundamentally factors underlying the economic tensions are political. And the main one is this: both presidents understand their system's vulnerabilities should unemployment continue to rise. They would be edging toward the cliff of catastrophe.
I put the matter this way to two of my favorite international economists. I asked Professor Michael Intriligator of UCLA whether he agreed with this idea: ``America doesn't work, if people are out of work. The Chinese need to know that." To which American Economist replied: ``I absolutely agree with this and the Chinese need to know it. People seem to have lost sight of the economic commitment of the U.S. government to full employment. This is in the Full Employment Act of 1946 and it is still on the books."
Unemployment in the U.S. now hovers around ten percent. Should it rise much more, it will become the most explosive political issue on Obama's White House desk.
True enough, but for another perspective, I ran the proposition (that ``America doesn't work if people are out of work") by Asia-based Economist Kenneth Courtis. The former Managing Director and Vice Chairman of Goldman Sachs Asia is based in Tokyo, now running his own firm called Courtis Intergalatic, and, probably, deserves the distinction of predicting (better than almost anyone) Japan's economic slide together with China's rise.
His reaction was different than Intriligator's and extremely interesting. He rewrote the proposition to take the focus off the U.S. He came back with this: "China doesn't work, if people are out of work."
The point these two sharp economists make is simple but vital: The key issue in the U.S.-China economic and indeed strategic relationship is unemployment. Translated politically, it is ``too many angry and frustrated people with no jobs, a lot of grudges and too much time on their hands."
Thus, the Sino-U.S. understanding, for the immediate future, needs to adhere to this rock-bottom principle: Neither side will do anything significant to exacerbate the unemployment problems for the other. Sure, this is easier to say than to do. It will mean achieving a tense trans-Pacific balancing act, trying to avoid getting too close to the edge and falling over. It will take constant communication, easing off and signing on, while, at the same time, ignoring minor irritants. Because if the most important bilateral relationship in the world falls off the cliff, the probability is that the rest of the world goes down with it.
Syndicated columnist, former long-time university professor and author Tom Plate is writing a trilogy of books on Asia. He can be reached at platecolumn@gmail.com.