Wednesday, August 5, 2015

Henry Paulson's Book “Dealing with China”


Henry Paulson, Jr. has a new book titled “Dealing with China”. Is this a practical treatise on working with China?

Seventeen of the book’s twenty chapters are detailed descriptions of Mr. Paulson’s own personal history while working with Goldman Sachs, as US Treasury Secretary and with the Paulson Institute. It is an interesting personal story. However, the autobiographical review is not truly helpful for dealings with China.

A Wall Street Journal book review by Jeffrey Wasserstrom is quite accurate:
“…careful language that will not bother Chinese censors…Mr. Paulson is too soft on his “old friends,” including the man now in power, Xi Jinping.”

The Financial Times review by James Kynge is on target as well:
“…Paulson’s prescriptions all tend toward forging better relations with China by supporting what China wants…may win friends in Beijing but will be less popular among U.S. allies…such as Japan...the lessons…are…academic.”

These reactions are entirely understandable, leaving the reader to wonder what is clouding Mr. Paulson's vision. His assessment of China consistently glosses over reality. While addressing the needs of the Chinese people, Mr. Paulson curiously concludes: “…they have made good on their vows.” Throughout this book, Paulson is clearly advocating on China's behalf. He encourages a greater role for China internationally, including with the World Trade Organization. Paulson suggests: “We should… make concessions… to encourage China to take a more prominent role.”

In a Fox News’ interview with James Rosen discussing his book Mr. Paulson offered: “I would definitely not classify China as an enemy…they are a competitor.”

The FBI report in Matt Dean’s recent Fox News’ article raises doubt that China is simply a competitor: “China the most predominant economic espionage threat to US…the number of economic espionage investigations undertaken by the agency over the last year…a 53 percent increase…state-sanctioned corporate theft by China is at the core of the problem.”

Are China’s strategic ambitions hostile? Jingoistic?  Its territorial claims as reported by the BBC’s Carrie Gracie and in the Financial Times book review have raised concerns in Taiwan and Japan.

Mr. Paulson is a successful and serious man. He is certainly not na├»ve. But his glowing praise of China’s economic and social progress, including suggesting a leading international role, raises sincere questions about his impartiality. This book was unfortunately a disappointment for those seeking constructive analytical insight.