commentary

(Asian Wall Street Journal)

July 4, 2003

Be Tougher on Burma Than China

by William H. Overholt

In Burma and China, United States foreign policy is confronted with a crucial question: do trade and investment with dictatorships strengthen their hold on power and lead to greater repression, or encourage moderation and greater human rights?

U.S. Secretary of State Colin Powell's denunciation of Burma's house arrest of opposition leader Aung San Suu Kyi is evidence of the tough line Washington has taken against that dictatorship. And Unocal Corp.'s trial in Los Angeles on allegations that the oil company should be held responsible for human rights abuses that occurred during construction of its pipeline in Burma will certainly make U.S. companies think twice before doing business there.

Yet at the same time as the U.S. is imposing sanctions on Burma, it pursues a policy of open trade with China. This inconsistency is criticized from both sides. Business groups advocate engagement with both China and Burma, while human rights groups advocate trade restrictions against both.

But a closer look at both countries reveals enormous differences that justify pursuing two different policies.

In China, foreign investments have been numerous and widely dispersed. For instance, several years ago there were 80,000 Hong Kong-invested companies in Guangdong Province alone. These companies have created innumerable jobs that are outside government control and have distributed money, information and other resources widely in a country where all these were previously under tight government control. The companies have generated pressure groups that successfully advocated greater social openness, and have improved the welfare of workers.

Notwithstanding some widely publicized abuses, the typical Western company in China pays wages that are two or more times the local standard and has environmental and behavior standards that were virtually unknown prior to China's opening to the outside world in the 1980s. Before the opening up, there were virtually no independent sources of information. Now the average Chinese family has more than one television, with significant access to international news. While the government has had some successes at Internet censorship, educated Chinese can find out just about anything over the Web.

This is the kind of influence the U.S. wants. While China's government remains dictatorial and repressive of religious, labor, and other freedoms, the improvement compared with the era before reform is dramatic.

The last time I lectured at Peking University, a student stood up and said his class had been assigned to read both my book, "The Rise of China," and Gordon Chang's book, "The Coming Collapse of China." He asked whether Mr. Chang was correct in arguing that fast economic reform combined with an absence of political reform would eventually bring down the government. I told him the answer lay in the fact that he was assigned Mr. Chang's book and was allowed to ask such a question. Before China's opening up, even whispering such thoughts to a friend would have risked jail. That is why facilitating China's open-door policy is good for American values.

In the case of Burma, foreign investment has been focused on a few large deals, primarily with oil companies. Virtually all the benefits have gone directly to a few senior leaders of the ruling regime. There has been no broad exposure of the population to the global information flow, no widespread distribution of resources that are outside government control. The regime has become more repressive, not less.

In China, the bulk of foreign investment has been closely associated with advances in human well-being and the worst human-rights abuses have occurred in other areas, such as government repression of the Falun Gong. In Burma, the most egregious human-rights abuses have been directly connected with efforts to make particular Western companies profitable.

Many minority upland people in Burma, largely Christians in contrast to the lowland Buddhists who control the government, have been abducted and forced to work, often without food, until they die while building roads and other infrastructure for the oil companies. The companies involved say this is beyond their control and characterize it as government security policy, but undeniably large numbers of people have been killed for the specific purpose of making these investments profitable. Conversely, these projects have been used by the government as an excuse for annihilating many tribal people.

Consequently, the U.S. doesn't contradict itself when it implements different policies toward China and Burma. It is simply pursuing the same values in two quite different situations.

Many business groups and human rights groups will denounce this conclusion. Human rights groups will say that investment in any country run by a repressive dictatorship supports that dictatorship and should be banned in China as well as Burma. The problem with this argument is that, although as late as 1980 both South Korea and Taiwan were more repressive than China is today, the same kind of opening and development in Taiwan and South Korea freed the minds of people in those countries, created a middle-class society, and ultimately created social pressures for democratization.

Business groups will assert that Burma is just beginning to open and the benefits will appear later. That argument has weight, but not enough. Foreign investments in Burma are propping up one of the world's most brutal regimes, creating industries served by deliberately starved slave labor, and supporting the worst human-rights abuses outside Africa. That combination is just morally unacceptable.


Dr. Overholt holds the Center for Asia Pacific Policy Chair at RAND in Santa Monica, California. He is the author of "The Rise of China" (W.W. Norton, 1993) and advised the pro-democracy coalition of 21 tribal groups and Aung San Suu Kyi supporters that created the Provisional Revolutionary Government in Burma in 1989.

This commentary originally appeared in Asian Wall Street Journal on July 4, 2003. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.