Citizen of the world
What does it mean to be a citizen of the world? The answer is not that different for individuals and countries. Last Saturday, I sat watching the sunset over Deep Water Bay from the sanctuary of Middle Island. My companions were two model global citizens - a young Indian couple with multiple degrees from Oxford and Harvard, one a lawyer with a large American firm, the other a human-rights scholar.
The lawyer, from Delhi, has the stencilled, long-lashed profile familiar to the connoisseur of Mughal miniature paintings. A practicing Jain - an ancient religion - she professes not only vegetarianism but also refrains from harming any living thing, including the mosquitoes that buzz around Middle Island in the evening. She is fiercely sceptical of a global economy that subjects its weakest members to the 'creative destruction' of the free market. In a conversation that ranges across Gandhi, India's bumpy economic reforms and China's galloping trade surplus, her husband, the human-rights scholar, a native of Chennai, defends the community of capitalism. He believes that globalisation can be tamed by the rule of law enforced by international organisations. She thinks that Gandhian self-sufficiency is the answer.
Gandhi's memory is now frayed by his legacy of economic stagnation and insularity. Yet Gandhi raised troubling questions that continue to exert a strong appeal to the victims of globalisation. These questions are relevant now to a China whose explosive growth is creating havoc to the livelihoods of manufacturing workers from Milwaukee to Jakarta, and to an India whose economy is growing after decades of decline.
What gives China the 'right' to become the workshop of the world, at the expense of American or Southeast Asian workers? Or for that matter, for India to become the world's outsourcing hub for information technology and call centres?
From an economic perspective, I cannot help but side with the rules-based view of the human-rights scholar. From a political viewpoint, however, it is all too clear that the lawyer is right, and that trade between nations, however beneficial it is to global growth, can create unsustainable tensions. In the long run, all are winners; but in the short term there are winners and losers.
Such friction has been playing out over the last month in foreign-currency markets, with wave after wave of pressure against China to relax its capital controls, or repeg the value of the yuan, to make its exports more expensive and hence less competitive. As we were chatting on Middle Island, the Group of Seven finance ministers were meeting in Dubai, endorsing market mechanisms for exchange rates in a declaration aimed at the Chinese government. Behind the rhetoric lay a presidential election campaign in the United States. For American politicians, China is as easy a target as Japan was 15 years ago.
What should Asia, and particularly China, do to balance the demands of growth against the moral and political requirements of global citizenship? On the economic front, solutions are relatively easy to find. Ignore the pressure. Use Asia's US$1 trillion-plus in foreign-exchange reserves to counter the currency volatility induced by US politics. Remind the US of its experience with Japan, in which the yen doubled in value after the US-induced Plaza Accord in 1985, but Japan's trade surplus rocketed, too.
But the politics, and the victims, do not go away. Here, China's only real choice - and that of India and emerging Asia as well - is to become champions of global trade rules that benefit all, and address the needs of those vulnerable to economic shocks in rich and poor countries alike.
Edith Terry is the editor of the Post's opinion pages and the author of How Asia Got Rich: Japan, China and the Asian Miracle
