Obama’s Politics of Change and US Policy on China
Henry C.K. Liu 

This article appeared on AToL on March 6, 2009 as OBAMA, CHANGE AND CHINA, Part 1:The song stays the same.


Foreign policy is fundamentally based on national interests that change only slowly and infrequently except under crisis situations. Still, even in normal times, electoral changes of administration inevitably bring changes in style and nuance in the formulation and implementation of foreign policy within a context of continuity.
Yet the Obama administration has come into power at a time of unprecedented and severe global financial and economic crises that have profound implications in US national interests and US position in a changing geo-economic-political world order. Crisis conditions that are crying out for change are enhancing the new president’s ability to live up to his campaign slogan of “Obama for Change” not just domestically, but also in foreign policy. The question is whether Obama’s campaign for change can survive his politics of change.
It is necessary to point out that Obama did not merely call for change for change’s sake, but for change that “we can believe in”. The campaign slogan of “yes we can” is soaked with ideological energy. It presumably means change that will reorder the systemic dysfunctionality that has built up in recent decades that has landed the world in its currency sorrowful state. It declares a commitment to more effective government to bring about a more equitable society at home and a more just world order internationally.
The popular desire for change was the prime reason for Obama’s election victory. Yet, unfortunately, a more equitable society at home and aboard within a more just world order has not always aligned perfectly with US national interests historically. Clearly, a redefinition of US national interests is critical to the success of President Obama’s agenda of change.

US National Inerests

The definition of US national interests was sharply distorted by the 2001 terrorist attacks of 9:11 in the first year of the Gerorge W. Bush administration. Foreign policy under Bush had been framed by an over-the-top militancy with two distinct characteristics: US unilateralism based on superpower exceptionalism and a transformational diplomacy agenda promoted by US neo-conservatism. This dubious militancy, as delineated in National Security Council document The Naional Security Strategy of the United States, released on September 20, 2002, a year after the September 11 terrorist attacks, has led to disastrous failures in US foreign policy on many fronts. These failures in turn have created not only an erosion of US observation of human rights overseas but also a decline of civil liberty domestically.
On China policy, the NSC document spelled out “profound disagreements” between China and the US: “Our commitment to the self-defense of Taiwan under the Taiwan Relations Act is one. Human rights is another. We expect China to adhere to its nonproliferation commitments.” But it added that “We will work to narrow differences where they exist, but not allow them to preclude cooperation where we agree.” This is essentially the same message that Hilary Clinton, unsuccessful rival of candidate Obama, now Secretary of State in the Obama administration, delivered to China in her first official trip aboard in February 2009.
US unilateralism based on superpower exceptionalism, instead of making the US more secure, has become the midwife for a renewed surge of anti-superpower political and economic nationalism everywhere. US domination of supranational organizations while simultaneously defying their protocol has weakened internationalism and legitimized nationalism. The Bush Doctrine of expanding US nuclear monopoly, of preemptive global wars against ideologically based terrorism with an “either with us or against us” extremism, of posturing a provocative policy of no compromise with states that allegedly support terrorism and of adopting a policy of unilateral military attacks on non-nuclear defenseless nations, poured gasoline on the smoldering fire of defensive anti-US nationalism everywhere and gave all non-nuclear nations strong incentives to go nuclear.
International economic relations, particularly resistance against unjust terms of trade trapped under the current predatory international finance architecture, are critical components of foreign policy for all countries in a globalized world. Since US-China trade has grown exponentially in the past three decades, US-China economic relations has emerged as a key focus in the relations between the two nations and the future shape of a changing world economic order. US policy on China is increasingly affected by problems and potentials in economic relations which loom increasingly larger among broader security issues. Because the US is a leading global power, its foreign policy naturally aims at serving broad global US interests. This aim often conflicts with domestic special interests that can apply strong domestic political pressures on foreign policy formulation.
US National Security Strategy

Four years later, in the March 2006 NSC document: The National Security Strategy of the United States of American, President Bush started his introductory letter with the sentence: “America is at war.” The document began with an Overview of America’s National Security Strategy: “It is the policy of the United States to seek and support democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world. In the world today, the fundamental character of regimes matters as much as the distribution of power among them.”

Balance of power, the world order rule book that has governed all foreign policy since the Peace of Westphalia of 1648, was declared obsolete by the sole remaining superpower which claimed the awesome privilege of treating the world as its ideological oyster to act as it pleased.

US Aims to Transform China’s Fundamental Character

On China, the document “urges China to move to a market-based, flexible exchange rate regime,” and commits the US “to continue to work closely with China to ensure it honors its WTO commitments and protects intellectual property.” It went on to state:

encapsulates Asia’s dramatic economic successes, but China’s transition remains incomplete. In one generation, China has gone from poverty and isolation to growing integration into the international economic system. China once opposed global institutions; today it is a permanent member of the UNSC and the WTO. As China becomes a global player, it must act as a responsible stakeholder that fulfills its obligations and works with the United States and others to advance the international system that has enabled its success: enforcing the international rules that have helped China lift itself out of a century of economic deprivation, embracing the economic and political standards that go along with that system of rules, and contributing to international stability and security by working with the United States and other major powers.

’s leaders proclaim that they have made a decision to walk the transformative path of peaceful development. If China keeps this commitment, the United States will welcome the emergence of a China that is peaceful and prosperous and that cooperates with us to address common challenges and mutual interests. China can make an important contribution to global prosperity and ensure its own prosperity for the longer term if it will rely more on domestic demand and less on global trade imbalances to drive its economic growth. China shares our exposure to the challenges of globalization and other transnational concerns. Mutual interests can guide our cooperation on issues such as terrorism, proliferation, and energy security. We will work to increase our cooperation to combat disease pandemics and reverse environmental degradation.

The United States encourages China to continue down the road of reform and openness, because in this way China’s leaders can meet the legitimate needs and aspirations of the Chinese people for liberty, stability, and prosperity. As economic growth continues, China will face a growing demand from its own people to follow the path of East Asia’s many modern democracies, adding political freedom to economic freedom. Continuing along this path will contribute to regional and international security.

China’s leaders must realize, however, that they cannot stay on this peaceful path while holding on to old ways of thinking and acting that exacerbate concerns throughout the region and the world.
These old ways include:
Continuing China’s military expansion in a non-transparent way;
Expanding trade, but acting as if they can somehow “lock up” energy supplies around the world or seek to direct markets rather than opening them up – as if they can follow a mercantilism borrowed from a discredited era; and
Supporting resource-rich countries without regard to the misrule at home or misbehavior abroad of those regimes.

and Taiwan must also resolve their differences peacefully, without coercion and without unilateral action by either China or Taiwan.

Ultimately, China’s leaders must see that they cannot let their population increasingly experience the freedoms to buy, sell, and produce, while denying them the rights to assemble, speak, and worship. Only by allowing the Chinese people to enjoy these basic freedoms and universal rights can China honor its own constitution and international commitments and reach its full potential. Our strategy seeks to encourage China to make the right strategic choices for its people, while we hedge against other possibilities.
Thus US transformationalism foreign policy was directly applicable to China. While there are some congruence of geopolitical views between China and the US, the above passage illustrates how “profound disagreements” persists between the two nations. China does not take kindly US persistence in characterizing the Chinese socialist system, its “fundamental character”, as inherently evil and unacceptable.
Worse yet, the US under Bush had declared that geopolitical balance of power, the basis of China’s policy of improving relations with the US, has been preempted by China’s unacceptable fundamental character. That unacceptability was only temporarily overlooked by the US because of the more unacceptable character of Islamic radicalism. The US has not giving up balance of power geopolitics, it only shifted from a balance of power between independent sovereign states to a balance of power between conflicting ideologies. The problem is that while Western liberals and neoliberals have a right to detest non-Western religious and philosophical strands, they do not have any right to demand that other nations follow US ideological preferences by claiming the right to practice ideological imperialism. Opposition to extremism has been used as a justification for the clash of civilization. Yet extremist Christian fundamentalism is everywhere in US politics and foreign policy.
China’s move toward a socialist market economy was a pragmatic concession to the global dominance of market fundamentalism. Since the summer of 2007, this unregulated market system has experienced severe crisis that requires massive government intervention to save it from collapse. For a quarter century, until 1973, China’s isolation from international organizations such as UN Security Council or the WTO had been the direct result of US containment policy to keep China isolated. US arms sale to Taiwan has been and continues to be the biggest obstacle to a peaceful end to China’s unfinished civil war. Accusing China of practicing mercantilism is laughable because mercantilism required trade surplus to be denominated in gold, not fiat dollars that the US can print at will.

US Foreign Policy Failure
Towards the end of the Bush administration, faced with undeniable foreign policy setbacks caused by domestic neoconservative politics and a global financial crisis caused by unregulated market fundamentalism, a belated general consensus is merging that to arrest the deterioration of US global influence, multilateralism needs to be restored and the transformational diplomacy agenda needs to be adjusted and replaced with a policy of peaceful cooperative coexistence between countries with different socio-economic-cultural-political systems. The view of an inevitable clash of civilizations mindlessly embraced by US neoconservatives as a basis for US foreign policy formulation has had its validity disproved by events. At the same time, blind faith in unregulated markets is being recognized as the fundamental cause of the financial/economic crisis. 
Yet multilateralism cannot be restored unilaterally and peaceful coexistence cannot be achieved by a militant transformational diplomatic agenda. The current global financial crisis has its genesis in the globalized US finance sector. The solution requires the application of transformationalism not to foreign economic/political systems disapproved by the US, but to predatory global neoliberal market capitalism engineered by US financiers that has inflicted more damage to the US than any foreign enemy or terrorist group.

Greenspan Fell into Trap set by Bin Laden

While the Federal Reserve, the US central bank, under Greenspan began its emergency monetary rescue of the equity market in response to the 1987 crash as an one-off emergency measure, it was the 9:11 terrorist attacks on the World Trade Center in 2001 that pushed Greenspan to adopt a permanent accommodative monetary stance to show that the US economy can survive terrorist threats. Such continuous accommodative monetary policy became the underlining factor that enabled the monetary excesses that led to the credit crisis that finally broke out in July 2007.
If the ultimate objective of the 9:11 terrorists in their attack on the symbolic World Trade Center in New York in 2001was to topple the US financial system, it seemed to have succeeded spectacularly within six years. The US, in its aftermath frenzy of collective rage, appeared to have fallen right into the self-destructive trap set by al-Qaeda. Any good policy chief knows that it is more effective to focus on capturing a specific perpetrator who has killed a cop than to declare war on all criminals out of vengeance. A general war on crime will unite all criminals to make it easier for the specific perpetrator to escape police capture. A global war on terrorism will likewise unite terrorists of all persuasions. This is the reason why Osama bin Laden has so far escaped capture. 
Since mid 2007, unregulated global non-bank financial markets, having been fueled to the point of implosion by the Fed’s easy money regime, have experienced abrupt meltdowns that have flowed back into the largely deregulated banking system. Led by US financial “innovations”, the global banking system, having been pushed by neoliberals to privatize even in many socialist countries over the last decade, is being nationalized in every country active in world trade through government bailouts.
In the US, the freewheeling investment banking regime has gone out of existence since the autumn of 2008, being folded back into bank-holding companies in order to qualify for central bank funding. Unregulated market fundamentalism is now dependent entirely on government life support. The global financial system is under intensive care in every interconnected market economy around the world. Since the effectiveness of US foreign policy is predicated on US economic prowess, setbacks in the US financial and economic system directly impact US influence in the world.

Economic Nationalism

Since government bailout funding is sourced essentially from taxpayer money, government intervention is inseparably attached to economic nationalism. Even though most mainstream economists and policymakers continue to oppose anything that hints at protectionism as against US national interests, the massive US stimulus bill predictably contains a “buy American” clause. Free trade supporters such as the Consumer Electronics Association (CEA) warn that “Buy American” provisions in the economic stimulus bill could make the US vulnerable to a global trade war.
President Obama has said that “we can’t send a protectionist message” in the stimulus bill, or convey to trading partners “that somehow we’re just looking after ourselves and not concerned with world trade.” The Senate softened the “buy-American” provision in the stimulus bill it passed by stipulating that any government procurement policies comply with World Trade Organization rules. Yet US transnational business interests argued that the language favoring American producers should have been removed altogether.
Yet it is clear that the world economies cannot rely on trade to get out of the current crisis because over reliance on trade was the cause of the crisis.  The export economy over exported to earn dollars that cannot be spent at home and the import economy, namely the US, over imported by going into massive debt denominated in fiat dollar that the central bank supplied freely. Deregulation and asset price inflation were the only US export for the past decade. Now, in a panic of government intervention, the stimulus package of every government is aiming to maximize national multiplier effects of its fiscal spending. Every government is registering its opposition to regressive protectionism while they adopt policies of economic nationalism.

The Need for a Global Income Policy

The anti-trade game of beggar thy neighbor in a race to bottom for wages is changed to a race to the top for maximizing national multiplier effects of stimulus spending. Yet no Western government has yet considered the dire need for an income policy to cure the demand deficiency problem behind the current crisis. All stimulus programs are focusing disproportionately on bailing out private businesses to help them survive by laying offs or reducing wages and benefits. This type of stimulus is a key component of a downward spiral of economic stagnation that will last for at least a decade.
The Economic Policy Institute (EPI), a pro-labor Washington think tank, issued a Statement on Economic Recovery Package on February 12, 2009 with a warning to “make no mistake—the economy is in such a dramatic free fall that this legislation by itself will not prevent additional job loss or rising unemployment.  Nevertheless, reducing the loss of jobs can prevent a catastrophic loss of income and economic opportunity that could affect every segment of our society and be especially painful for the low-income and minority communities that are most vulnerable. This package will save or create at least three million jobs over the next three years, and that will be a major achievement.”

EPI economist Jared Bernstein, a vocal critic of anti-labor aspects of free trade, has been appointed to a new post in the Vice President’s office as Chief Economist and Economic Policy Adviser to Vice President Joseph Biden, providing a strong advocate for labor in the Obama White House. Yet Bernstein’s appointment contrasts with the more centrist free trade views of many of President Obama’s top economic advisers who were mostly alumni from the Clinton era whose policies were largely responsible for the mess today.

EPI senior international economist Robert E. Scott asserts in an article on the EPI website that the Buy-American rule in the stimulus bill is smart policy that would not run afoul of any of US trade treaties, arguing that “when domestic industries have been injured by unfair trade practices, protecting them is good policy.” Scott points out that “some of the loudest protests about buy-American provisions have come from self interested American companies like Caterpillar and General Electric that manufacture overseas. Foreign ministers from China and Russia, which haven’t signed the procurement codes, have also complained, but these countries simply want something for nothing. Giving them access to stimulus spending will dilute the impact of the recovery bill and eliminate all incentives for them to sign the codes.”

Ohio Democratic Senator Sherrod Brown
said: “the American people have been willing to reach deep into their pockets and spend tens of billions of dollars to build roads, repair bridges and construct water and sewer systems. And all that they want is that the work be done by Americans and that the materials they use are made in America. Who could be against that? Well, some Ivy League economists don’t like it — something about Smoot-Hawley and the Great Depression. And newspaper publishers pontificate about free trade theory, as they see their advertisers flee and their papers shrink. And the corporate executives of some of America’s largest corporations tell us it will cause a trade war, as they collect million-dollar bonuses while laying off American workers and outsourcing jobs to China and India. These are not people who are about to lose their jobs to bad trade policy. Other than this small, shall we say elite group, you could search far and wide and find almost no one who thinks “Made in America” is a bad idea.” Since tax money comes largely from workers whose jobs are on the line, the senator's view is incontestable.

Yet barely a decade into the 21st century, with a globalized neo-liberal trade regime firmly in place in a world where market economy has become the norm due to dubious US ideology backed by US financial power, protectionism appears to be fast re-emerging and possibly igniting a new global trade war of complex dimensions, as market fundamentalism has brought on what may well be the greatest economic crisis in recent history.

The irony is that this new trade war is being launched not by the poor economies that have been receiving the short end of the trade stick, but by the US, which has been winning more than it has been losing on all counts from global neo-liberal trade, with the European Union following suit in lockstep. Japan, of course, has never let up on protectionism and never taken competition policy seriously.
Workers in every country in the world have all, in their separate ways, been victimized by deregulated global market fundamentalism. The current financial/economic crisis cannot be solved without introducing a new world economic order that sets the raising of working wages as the priority goal of reform and restructure to raise demand to redress overcapacity. In short, a global income policy is urgently needed.

Chinese Economic Policy at a Crossroad

Alas, led by the US, most government bailouts and stimulus programs around the world thus far are formulated on a model of giving taxpayer money to corporate employers so they can further cut employment and further push down wages to further weaken consumer demand. China appears to be the only exception of this trend since the reins of leadership were passed to Hu Jintao and Wen Jaibao in 2002, albeit there are still vocal forces in Chinese policy debates insisting on continuing to follow faulty US models of growth through deregulated markets, and to depend on export to achieve prosperity. Hopefully, facts will now silent these wrongheaded vocal voices and allow China to finally move on a path of balanced domestic development. 
The rich nations need to recognize that their efforts to squeeze every last drop of advantage out of an already unfair trade regime will only plunge the world into deep depression. History has shown that while the poor suffer more in economic depressions, the rich, even as they are financially cushioned by their wealth, are hurt by political repercussions in the form of either war or revolution, or both. Already, reports of social protests are appearing all over the world. (Please see my June 16, 2005 AToL article: The Coming Trade War and Global Depression)
The current economic crisis is a manifestation of the dysfunctiionality of the unregulated global financial system promoted by US neoliberalism. US transformationalism under George W. Bush aimed at transforming the entire world by “enlarging” US-style democracy through opening up national markets everywhere for US transnational corporations. US policy on China aims at accelerating the push on the Chinese economy towards unregulated market fundamentalism through “peaceful evolution”, a strategy entertained by all US administrations, regardless of the structural adverse impact of such evolution would have on socio-political stability in China. This strategy is futile because the Chinese socialist revolution cannot be manipulated to self destruct merely to enhance US global national interests.

China against Peaceful Evolution

peaceful evolution strategy for China is dangerous wishful thinking because unregulated market fundamentalism is in basic conflict with Chinese socio-economic and political culture. And even if US peaceful evolution should succeed temporarily, the resultant structural inequality will end up pushing Chinese politics to repeat what happened to Pahlavi rule in Iran, to be overthrown by an otherwise preventable fundamentalist revolution. The current global crisis is a wake up call for a fundamental review of Chinese economic policy of the last three decades to keep the good and correct the bad.

New World Order Emerging

The global financial crisis that began in July 207 has accelerated the emergence of a new world order with a fundamental shift in the balance of power from a US-centric uni-polarity to a multi-polarity that reflects that rise of the BRIC (Brazil, Russia, India and China) nations. US attempts in the final 18 months of the Bush administration to restore unregulated failed markets has failed spectacularly because such attempts tried to restore the very conditions that had caused the failure. There is no hope of a “recovery” to the good old days of unregulated predatory market fundamentalism. The only hope lies in a fundamental restructuring of the predatory global financial and economic order into a more just world order.
It remains to be seen if the Obama team will bring about “changes we can believe in” or merely try to restore a dysfunctional financial system that will again produce serial financial crises at regular intervals. So far, the composition of the Obama team does not inspire confidence as the key cabinet positions are drawn from the same talent pool of people who had caused the problem earlier. They are mostly the same “all the King’s men” who had earlier pushed Humpty Dumpty Goldilocks economy off the financial wall. The only change appears to be in the presidential rhetoric, not in the administration or the legislative branch of the government, notwithstanding a Democrat controlled Congress.

Obama and FDR

Compared to Franklin D Roosevelt whose administration brought in a host of new faces in progressive politics from academia, the Obama administration so far looks more like business as usual from the Clinton era. FDR’s New Deal was a continuation of the Progressive Movement of 1890 that had been put in deep freeze in the 1902s under Hoover, combining policies derived from Theodore Roosevelt and Woodrow Wilson. The Progressive Party was founded in 1910 when progressive Theodore Roosevelt lost the Republican nomination for presidential candidacy to conservative Robert Taft.  The movement split the Republican vote to allow progressive Democrat Woodrow Wilson, an intellectual liberal, to become the 28th president of the United States.
FDR derived loyal support from elements not then identified with the Democratic Party: organized labor, small farmers and middleclass reformers. The Democrat Party then had been controlled by Southern conservatives and machine politicians in Northern cities with large immigrant voters.  The 1932 election marked the beginning of a long period of Democrat ascendancy. Yet constant conflict between conservative and progressive fractions within the Party weakened the New Deal, some of the most bitter opponents of which were Democrats. Two of the three most influential New Dealers, Harold Ickes, Secretary of the Interior, Henry A Wallace, Secretary of Agriculture, were former Progressive Republicans, while Frances Perkins, Secretary of Labor, the female cabinet member in history, was a social worker/reformer from Boston.
FDR created a “brain trust” of academicians, writers and social reformers, with direct and frequent access to the White House, exerting critical influence on national policy formulation. New Deal programs were administered by unapologetic ideologues from mid-level bureaucracy with direct operation expertise and experience with government operations, not cabinet members of previous administrations. Such a group has yet to emerge in the Obama administration.
The strategic purpose of the New Deal was to save capitalism from itself. Its priority was to check the downward spiral of deflation and bankruptcies to restore market confidence by bringing about through government intervention a general simultaneous increase in prices, wages and consumer purchasing power to correct the structural imbalance in the economic system. From early reports, the Obama stimulus package appears light or even nonexistent on raising wages while placing emphasis on keeping asset prices from falling. Until the Obama team takes measures to address the wage/price imbalance, the financial crisis will continue.
The New Deal continued the Hoover program of encouraging bank lending to business, saving property owners from foreclosure and adopting new measures to aid distressed sectors in the economy. This appears to be similar to the approach adopted by Obama: bank bailouts, foreclosure relief and aid to automakers, but the Obama scale of intervention is generally considered as inadequate for the task. The most glaring difference seems to be the Obama team’s acceptance of layoffs as a necessary component in turning around distressed companies.
FDR declared in 1934 that his administration sought “balance in the economic system – between industry and agriculture, between the wage earner and the employer and the consumer.” The National Industrial Recovery Act (NIRA) was designed to stabilize falling industrial prices, raise wages and promote collective bargaining. The Agriculture Adjustment Act (AAA) aimed at raising farm prices to booster farm income. Such measures were combined with banking and financial market reform to increase the supply of money and credit to real economic development away from speculation.
The New Deal asked Congress to appropriate large sums for direct relief and to finance ambitious public works programs along with stimulating private enterprise, The New Deal was less than fully effective because FDR failed to fully support sufficient direct relief and allowed unemployment to stay unconstructively high. Nevertheless, Social Security was enacted and the Wagner Act was passed by Congress, guaranteeing the right of collective bargaining with the creation of National Labor Relations Board. However, both the NIRA and the AAA were struck down by the Supreme Court as unconstitutional in 1933 and 1936 respectively. 
FDR’s first 100 Days were noticeably different than Obama’s even at the start. Congress gave FDR everything he asked, in stark contrast to Congressional reception to Obama’s stimulus package even from members of his own party. The Obama budget for 2010 is expected to face stiff challenge in Congress. With most banks closed by state governors by the time FDR took office on March 4, 1933, FDR sent to Congress the Emergency Banking Act based largely along the line laid down by the previous Hoover administration, which Congress passed on the same day. House Committee on Financial Services Democrats, including Barney Frank, issued a letter on February 25, 2009, a month into the Obama presidency, to the CEO of Chicago-based Northern Trust Corp in Obama’s hometown, asking for a return of some of the $1,576,000,000 in TARP funds granted to the bank on Nov. 14. “We are dismayed and angered to learn that Northern Trust recently spent millions of dollars on a PGA golf tournament sponsorship and associated parties at the same time it has taken over $1.5 billion in federal stabilization funding under the Troubled Asset Relief Program,” the letter read, in part.
The Federal Deposit Insurance Corporation (FDIC) was created by FDR to guarantee bank deposits. A new Security Exchange Commission (SEC) was created by the Securities Act of 1933 and the Securities Exchange Act of 1934 to regulate the securities industry to prevent any recurrence of the financial abuses that caused the 1929 crash.  Speculation was sharply curtailed by raising the margin requirement to 55%. A Farm Credit Administration took over large numbers of failing farm mortgages and a Home Owners’ Loan Corporation took over failing non-farm residential mortgages. In contrast, Obama’s early moves have been mainstream centrist and relatively timid for the serious problems at hand.

End of US Unilateralism

State policies or actions are deemed “unilateral” if they have significant impacts on people in other states but undertaken by a single state without the mandate of bilateral or multilateral treaties or in violation or defiance or rejection of such treaties. US unilateralism did not start with the Bush administration. Its moralistic root traces to Christian Right influence on US foreign policy after WWII, especially over US policy on China. It was the ideological basis for the Cold War in which a self-righteous superpower led subservient allies who did not have the wherewithal to resist its ideology-driven policies. It has continued after the end of the Cold War even as allies attempt to assert increasing independence with the disappearance of perceived Soviet threat. The huge power differential between the US as the sole remaining superpower and its former subservient allies gave the US a natural claim and de facto privilege to unilateralism. Under Bill Clinton, Secretary of State Madeleine Albright described the US as the “indispensable power”. Under George W Bush, unilateralism became a foreign policy aspiration rather than a foreign policy implementation tool. 
Critics have cited US decision under the Bush administration to withdraw from the ABM (Anti-Ballistic Missile) Treaty, to violate multilateral commitments to the Nonproliferation Treaty (NPT), to reject the Kyoto Protocol, to invade Iraq without UN approval and to make other hegemonic military-geopolitical-economic moves as evidence of US unilateralism, i.e., a general disrespect for multilateral arms control and global warming agreements, and a blatant disregard for the UN and other multilateral institutions or international consensus.
The cool reception Bush received during his September 2004 address to the 59th session of the United Nations (UN) General Assembly was a reflection of how unpopular US unilateralism had become among the international community. US military invasion of Iraq without UN authorization was viewed by many in the international community as a defiance of international law and the unilateral action solicited strong opposition from many governments around the world, including some traditional US allies.
The Bush/Rice transformational diplomacy agenda elevated democracy-enlargement activities inside other sovereign countries. According to Secretary Rice in her February 14, 2006 testimony before Senate Foreign Relations Committee, the objective of transformational diplomacy is: “to work with our many partners around the world to build and sustain democratic, well-governed states that will respond to the needs of their people and conduct themselves responsibly in the international system.”  The agenda targets “strategic” states of which China is high on the list, changing US foreign policy emphasis away from relations among governments to one of supporting systemic changes within targeted countries. It sounded like a sophistic declaration of a policy to interfere in the domestic affairs of other nations.

The Stakeholder Fraud

The transformational theme was later further developed by Under Secretary of State Robert B. Zoellick, now World Bank President, in response to Chinese political analyst Zheng Bijian’s lead article in the September/October 2005 issue of Foreign Affairs: China’s ‘Peaceful rise’ to Great Power Status in connection with President Hu Jintao’s state visit to the US. “Peaceful development” has since been the preferred tem used by Chinese senior officials.
In an address before the National Committee on US-China Relations on September 21, 2005 in New York, Zoellick introduced the concept of making China into a “responsible stakeholder”, a major state with worldwide interests to preserve through cooperation with other powers. “It is time to take our policy beyond opening doors to China’s membership into the international system: We need to urge China to become a responsible stakeholder in that system,” said Zoellick.
In other words, exceptionalism is a prerogative reserved only for the US, the world’s sole remaining superpower. For China to be granted admission to the US dominated world system, China must behave according to rules prescribed by the US, rule to which the US alone can claim the privilege of exception. The invitation to China to be a responsible stakeholder is a demand for China to restructure her revolutionary national purpose to support US neo-imperialism geopolitically and for China to abandon internally its “socialist state under the people’s democratic dictatorship led by the working class and based on the alliance of workers and peasants” as stipulated in its constitution, to adopt US-style capitalistic liberal democracy.
The US stakeholder demand conflicts with China’s long-standing policy of non-alliance and rejection of hegemony in international affairs. US transformational diplomacy agenda also conflicts directly with China’s diplomatic principle of non-interference in the internal affairs of other countries.
Wang Honggang of the China Modern International Relations Research Institute reacted with: What does the US transformational diplomacy imply? (People’s Daily Online - June 2, 2006):

“First of all, this marks a great change of US diplomatic guiding principle from balancing great powers to emphasizing its diplomacy with the developing countries. Rice claimed that conflict among great powers is more remote than ever. Thus many international practices might be overturned by now. She thought the greatest threat in the future is not from conflict between countries, but might be from inside a country. Thus the sovereignty system is out of date, and the character of a regime is more important than the distribution of power in the world.

“Secondly, the transformational diplomacy implies that to intervene in other countries’ internal affairs has become the major task of the US diplomacy. It requires the US diplomats communicate with local people and have the capability of influence and even guide the development in those areas. This means the US has put its public diplomacy as an important part of its diplomatic policies. It has absorbed the experience and force from Non-Governmental Organizations and the CIA so that diplomats can openly represent the US government to influence other nations’ internal affairs. It can be seen as a breakthrough in US diplomacy.

“Thirdly, the transformation of diplomacy will make the US democratic strategy a long-term and systematic target. Rice has stressed that the purpose of such change is to establish and protect those democratic countries which can meet the needs of their people and be responsible in the international system and well administer themselves. Obviously the redistribution of human resources in the state department is to ensure the long-term goal of promoting democratic movement in the world to be carried out. ....

n the 1990s, the US advocated the Washington Consensus. But experience in Latin America shows that Washington Consensus is not absolute truth that is right in any case. The colored revolution in the former Soviet Union and the instable situation in Iraq have proved that the US democracy is not necessarily the prioritized choice for every country. Under the pretext of promoting democracy to intervene in other country's domestic affairs, the US action will surely inflict boycott from various nations and people. Some scholars in the US have warned the Bush administration that the US transformation of diplomacy may make the US become an unwelcome country which will win support from neither the US itself nor other countries.

“There is also doubt about the US capacity of carrying out such a diplomacy. Bush administration hopes it will be like the reconstruction program in Germany and Japan after the Second World War. However, the US financial situation now is not like that after the Second World War and those countries they want to reconstruct do not have the solid basis like in Germany and Japan then. Thus, upon the situation that the US economy is not that booming, can it win support from the Senate and House of Representatives to put large amount of dollars into the risky program of the transformational diplomacy without any insurance in its effect?

U.S. democracy is not necessarily the prioritized choice for every country. Under the pretext of promoting democracy to intervene in other country’s domestic affairs, US action will surely inflict boycott from various nations and peoples.”
On Rice’s transformational diplomacy agenda Bush built his new policy of world democratic revolution on the assumption that democracy in foreign lands would automatically welcome US neo-imperialism in the name of globalized capitalistic free trade. The collapse of global finance capitalism by the end of the Bush administration will instead pose serious challenges to US-style liberal democracy around the world. 

Democracy and Anti-Americanism

In the Middle East, in countries such as Islamic fundamentalist Saudi Arabia, the native land of Osama bin Laden and 15 of the 19 hijackers on September 11, 2001, or even secular Egypt, democracy, if allowed to be practiced as a free political process that reflects popular opinion and historical conditions, will likely be problematic to US regional and global interests, which includes its and its G7 allies’ dependence on a continuing supply of low-cost imported oil. The US continued to repeatedly try to topple democratically elected governments not to its liking, an example being the Bush White House’s efforts to engineer a coup in Venezuela to topple a democratically elected government.

In his November 6, 2003 speech to the National Endowment for Democracy, Bush paid homage to former President Ronald Reagan and his 1980s Westminster Abbey invocations of freedom’s allegedly unstoppable momentum against Soviet communism. All through the Cold War, while both camps claimed to defend freedom with their own version of democracy, such noble values were in short supply in practice not just within the Soviet bloc, but also, as Bush acknowledged, in the so-called free world dominated by the US.

Bush declared a theme of freedom through peace: “A global nuclear standoff with the
Soviet Union ended peacefully, as did the Soviet Union. The nations of Europe are moving toward unity, not dividing into armed camps and descending into genocide.” Yet in the next breath, he declared a theme of imposing freedom through war: “Every nation has learned, or should have learned, an important lesson: Freedom is worth fighting for, dying for and standing for, and the advance of freedom leads to peace.”

Soviet Union is gone but a nuclear standoff with Russia is far from over. Freedom is worth fighting for and dying for to nationalist freedom fighters, not to expeditionary troops in foreign lands in the absence of another opposing foreign army. Freedom dies with foreign occupation and peace is shattered by war. The historical fact is that the US won the Cold War not through invasion or occupation, or nuclear holocaust, but through a long-term test of economic endurance by bankrupting the USSR in an exorbitant arms race. Since no country was seriously interested in engaging in a new arms race with the US, freedom was redefined by Bush as freedom to impose US will unilaterally on a new Post-Cold-War world order.

Security vs Freedom

Since the September 11 terrorist attacks, Bush has repeatedly chosen security over freedom, adopting the same garrison-state mentality that pushed the Soviet Union toward self-destruction. To support its war in Afghanistan, the US set up military bases in Central Asia the same way it allied with undemocratic anti-communist regimes in its strategy of containment during the Cold War. The US has orchestrated a worldwide crackdown on terrorism with a strategy that promises to swell the ranks of terrorists further.

Bush’s speech reflected the “transformational” diplomacy agenda embraced by Condoleezza Rice, his national security adviser and later Secretary of State, who in August set out US ambitions to remake the
Middle East along neo-conservative lines by using US military power to advance democracy and free markets. It is a policy for the political transformation of Arabic countries deemed vital to achieving victory in the “global war on terrorism”.

Bush went on to say that the
US adopted “a new policy” for the Middle East and singled out, as countries that must change, not just adversaries such as Syria and Iran, but also traditional allies such as Egypt and Saudi Arabia. The president’s vision was an attempt to fuse US ambitions in the Islamic world - new benign, secular governments in Iraq and Afghanistan; an Arab-Israeli peace based on roadmap diplomacy; as well as political and economic openings in a wide swath of Islamic countries from North Africa to South Asia - with the wider rubric of promoting democracy around the world, including socialist China. Bush pledged a new momentum to foster broad changes comparable to the end of communism in Eastern Europe, implying a long-range agenda to dismember China in the name of self-determination of national minorities.

In keeping with the Trotskyite pedigree of
US neo-conservatism that had assumed the role of presidential tutor, Bush, the simplistic student, committed the US to nothing less than a Trotskyite world revolution of democracy and free markets, instead of a Stalinist strategy of capitalism in one country. Unfortunately, freedom cannot come in the form of guided missiles with bunker piercing war heads delivered by Black Hawk helicopters and democracy in distant lands cannot be created from fielding candidates nominated by Washington, notwithstanding Trotsky’s historic role as father of the Red Army.

Next: US Domestic Politics and China Policy