Last week, the establishment media played up reports that China surpassed Japan as the world’s second largest economy as measured by gross domestic product (GDP). Contrary to the amount of attention it received, the development is not as important as it was made to sound. First of all, if the PRC reported its economic data accurately, China probably passed Japan several years ago. Second, after adjusting for different prices within economies —known as purchasing power parity— China actually passed Japan way back in 1995. In other words, this is old news. Lost in these GDP measures, however, is any measure of personal income or wealth. And by that measure the average Japanese citizen is roughly in 40th place in the world, behind the average citizen of Mississippi. China’s GDP per capita, by comparison, is still only about 15 percent of the U.S. level, about the same as El Salvador.

This is not to say the United States should be turning a blind eye to China’s rise. In another development from last week, this one virtually ignored by the establishment media, the Department of Defense released its annual Military and Security Developments Involving the People’s Republic of China. According to the report, the People’s Liberation Army (PLA) official budget, which has enjoyed double-digit annual increases for two decades, grew again by nearly 8 percent. This is compared to the reductions in defense spending called for in President Barack Obama’s budget, which reduced defense spending from 4.9% of GDP today to 3.01% by 2019. So while the Obama administration is cutting our missile defenses and giving the Navy the cold shoulder, the PLA is developing anti-ship ballistic missiles, building up its military industrial complex and achieving an anti-access, area-denial capacity that will further limit American commanders’ options in Asia.

More troubling, however, was what the report did not focus enough on: the threat to Taiwan. There is little discussion of the Taiwan military structure or its equipment. Indeed, it is striking how the 2010 report avoids making any overall assessment of how the security situation in the Taiwan Straits is developing. If anything, while this year’s report is perhaps the most extensive official discussion of the PLA and China’s security situation available to the public, it arguably underplays the threat posed to Taiwan.

Meanwhile, while the Obama Defense Department is ignoring the threat to Taiwan, the Obama State Department has gotten off to a poor start defending human rights in China. During her first trip to Asia as secretary of state, Hillary Clinton told reporters that pressing the human rights issue in China should not interfere with the Obama administration’s efforts to engage China on “the global climate change crisis.” That’s right: the Obama administration believes global warming is more important than human rights. And even when they do discuss human rights, the Obama administration’s priorities are highly suspect. After the May 2010 U.S.–China Human Rights Dialogue, Assistant Secretary of State for Democracy, Human Rights, and Labor Michael Posner told reporters that the U.S. side brought up the Arizona immigration law, presumably to put the Chinese at ease, even though the Chinese expressed no concerns about the law.

Every year for 34 years, the U.S. Department of State has undertaken to prepare the “the most comprehensive record available of the condition of human rights around the world.” Despite promises that economic gains would improve China’s human rights record, since 1989, none of these reports has characterized China’s record as improving. In fact, the most recent two, the 2008 and 2009 reports, indicate a worsening situation.

There is a disconnect between the marginal role that human rights currently plays in America’s China policy and the State Department’s exhaustive annual report that catalogs China’s human rights abuses. The Obama Administration should make defense of universal liberties, not global warming or berating Arizona, a central part of U.S. public and private diplomacy with the People’s Republic of China (PRC).

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