On Friday, Condoleezza Rice, in an interview on CNBC’s Closing Bell with Maria Bartiromo, said “China doesn’t play fair” on trade, according to a transcript released by CNBC—or at least that is what she had said until the network issued a revised transcript. The new version of her remarks came out this way: “China could play fairer.” Dr. Rice apparently believes that Beijing is already something of a fair trader.
This depends on the definition of “fair.” Beijing keeps its currency undervalued by as much as 40 percent. It maintains the world’s largest array of manufacturing subsidies and permits the biggest ongoing theft in history, the piracy of foreign intellectual property. China continues its system of restrictions on foreign products and competitors, and consistently violates the promises it made in order to join the World Trade Organization. This, in Rice’s view, is “fair”?
One of the most important things that Rice can do in the remainder of her tenure is to get China policy right. She needs to formulate effective strategies to encourage Beijing to help solve problems around the world, not continue to make them worse. But she can’t do that if she won’t tell the truth about China. A good starting point would be to correct the correction of her CNBC remarks.