America, China’s economic integration
TEXT OF INTERVIEW
Bill Radke: President Obama and Chinese President Hu Jintao will sit down in Beijing this month for talks on trade and the environment. The countries have clashing on protectionism, and currencies, and climate change.
But author Zachary Karabell says the U.S. and China are more team than rivalry. His new book is called “Superfusion: How China and America Became One Economy and Why the World’s Prosperity Depends on It.” Zachary, good morning.
Zachary Karabell: Good morning.
Radke: I was surprised to read in your book, how much we not only buy from China, but the massive amount we sell to China — from equipment to know-how, to fried chicken and lipstick. But calling the U.S. and China one economy — how do you figure?
Karabell: Well, it’s obviously meant to be a provocative title. And it’s more to say that these economic systems have become so intimately intertwined over the past 10-20 years that they are becoming their own system that in many ways transcends the national boundaries of each country.
Radke: The U.S. and China are involved in high-level trade talks right now. What do you expect to come out of those?
Karabell: I expect the rhetoric to continue to be very favorable. Chinese diplomacy is a behind-closed-doors, say pretty anodyne, pretty generic things in public, and then get into the nitty-gritty away from the public eye. In private, it’s a little more difficult to tell because there’s still a degree to which both countries, and the leadership of both countries, see themselves as able to browbeat the other or get the other to do what they want. And that is unrealistic. Neither the United States nor China are amenable to that kind of pressure from the other.
Radke: Is China’s growth somehow going to swamp the U.S. economy? Are we at a disadvantage because of it?
Karabell: That’s unclear. I think a lot of depends on the degree to which the United States is able to remain vibrant, innovative and creative. Is able to, in fact, create a new-generation economy to replace the economy that we’ve been leaving. And if we’re not able to, then China — which is very much in an upward swing and does have a lot of self-confidence in their ability to carve out their own future — may, in fact, over the coming decades surpass or overtake the United States as the locus of global economic activity. And to some degree, there’s an inevitability to that. As they prosper more, the relative position of the United States will shift, and that’s not necessarily a bad thing for the United States. Certainly not a bad thing for the world, and nor should we view it that way.
Radke: Zachary Karabell is the author of “Superfusion: How China and America Became One Economy and Why the World’s Prosperity Depends on It.” Thank you.
Karabell: Thank you very much.
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