China has been more open than many developing countries, but there are increasing signs of mercantilism, with policies that seek to direct markets rather than opening them. The United States will not be able to sustain an open international economic system ?or domestic U.S. support for such a system ?without greater cooperation from China, as a stakeholder that shares responsibility on international economic issues.
For example, a responsible major global player shouldn抰 tolerate rampant theft of intellectual property and counterfeiting, both of which strike at the heart of America' knowledge economy. China' pledges ?including a statement just last week by President Hu in New York ?to crack down on the criminals who ply this trade are welcome, but the results are not yet evident. China needs to fully live up to its commitments to markets where America has a strong competitive advantage, such as in services, agriculture, and certain manufactured goods. And while China' exchange rate policy offered stability in the past, times have changed. China may have a global current account surplus this year of nearly $150 billion, among the highest in the world. This suggests that China' recent policy adjustments are an initial step, but much more remains to be done to permit markets to adjust to imbalances. China also shares a strong interest with the United States in negotiating a successful WTO Doha agreement that opens markets and expands global growth.
China' economic growth is driving its thirst for energy. In response, China is acting as if it can somehow "lock up" energy supplies around the world. This is not a sensible path to achieving energy security. Moreover, a mercantilist strategy leads to partnerships with regimes that hurt China' reputation and lead others to question its intentions. In contrast, market strategies can lessen volatility, instability, and hoarding. China should work with the United States and others to develop diverse sources of energy, including through clean coal technology, nuclear, renewables, hydrogen, and biofuels. Our new Asia Pacific Partnership on Clean Development and Climate ?as well as the bilateral dialogue conducted by the U.S. Department of Energy and China' National Development and Reform Commission ?offer practical mechanisms for this cooperation. We should also encourage the opening of oil and gas production in more places around the world. We can work on energy conservation and efficiency, including through standards for the many appliances made in China. Through the IEA we can strengthen the building and management of strategic reserves. We also have a common interest in secure transport routes and security in producing countries.
All nations conduct diplomacy to promote their national interests. Responsible stakeholders go further: They recognize that the international system sustains their peaceful prosperity, so they work to sustain that system. In its foreign policy, China has many opportunities to be a responsible stakeholder.