Sun Tzu, the ancient author of The Art of War, must be throwing a rice wine party in his heavenly tomb in the wake of the shirtsleeves California love-in between President Obama and President Xi Jinping. "Know your enemy" was, it seems, the theme of the meeting. Beijing was very much aware of-and had furiously protested- Washington's deep plunge into China's computer networks over the past 15 years via a secretive NSA unit, the Office of Tailored Access Operations (with the apt acronym TAO). Yet Xi merrily allowed Obama to pontificate on hacking and cyber-theft as if China were alone on such a stage.
Enter-with perfect timing-Edward Snowden, the spy who came in from Hawaii and who has been holed up in Hong Kong since May 20th. And cut to the wickedly straight-faced, no-commentary-needed take on Obama's hacker army by Xinhua, the Chinese Communist Party's official press service. With America's dark-side-of-the-moon surveillance programs like Prism suddenly in the global spotlight, the Chinese, long blistered by Washington's charges about hacking American corporate and military websites, were polite enough. They didn't even bother to mention that Prism was just another node in the Pentagon's Joint Vision 2020 dream of "full spectrum dominance."
By revealing the existence of Prism (and other related surveillance programs), Snowden handed Beijing a roast duck banquet of a motive for sticking with cyber-surveillance. Especially after Snowden, a few days later, doubled down by unveiling what Xi, of course, already knew-that the National Security Agency had for years been relentlessly hacking both Hong Kong and mainland Chinese computer networks.
But the ultimate shark fin's soup on China's recent banquet card was an editorial in the Communist Party-controlled Global Times. "Snowden," it acknowledged, "is a 'card' that China never expected," adding that "China is neither adept at nor used to playing it." Its recommendation: use the recent leaks "as evidence to negotiate with the US" It also offered a warning that "public opinion will turn against China's central government and the Hong Kong SAR [Special Administrative Region] government if they choose to send [Snowden] back."
With a set of cyber-campaigns-from cyber-enabled economic theft and espionage to the possibility of future state-sanctioned cyber-attacks-evolving in the shadows, it's hard to spin the sunny "new type of great power relationship" President Xi suggested for the US and China at the recent summit.
It's the (State) Economy, Stupid
The unfolding Snowden cyber-saga effectively drowned out the Obama administration's interest in learning more about Xi's immensely ambitious plans for reconfiguring the Chinese economy-and how to capture a piece of that future economic pie for American business. Essential to those plans is an astonishing investment of $6.4 trillion by China's leadership in a drive to "urbanize" the economy yet further by 2020.
That will be the dragon's share of a reconfigured development model emphasizing heightened productivity, moving the country up the international manufacturing quality ladder and digital pecking order, and encouraging ever more domestic consumption by an ever-expanding middle class. This will be joined to a massive ongoing investment in scientific and technological research. China has adopted the US model of public-private sector academic integration with the aim of producing dual-use technologies and so boosting not only the military but also the civilian economy.
Beijing may, in the end, spend up to 30% of its budget on defense-related research and development. This has certainly been a key vector in the country's recent breakneck expansion of information technology, microelectronics, telecommunications, nuclear energy, biotechnology, and the aerospace industry. Crucially, none of this has happened thanks to the good graces of the Goddess of the Market.
The pace in China remains frantic-from the building of supercomputers and an explosion of innovation to massive urban development. This would include, for example, the development of the southwestern hinterland city of Chongqin into arguably the biggest urban conglomeration in the world, with an estimated population of more than 33 million and still growing. A typical savory side story in the China boom of recent years would be the way that energy-gobbling country "won" the war in Iraq. The New York Times recently reported that it is now buying nearly 50% of all the oil Iraq produces. (If that doesn't hit Dick Cheney right in the heart, what will?)
Dreaming of What?
As soon as he was confirmed as general secretary at the Chinese Communist Party's 18th Party Congress in November 2012, Xi Jinping started to weave a "China dream" (zhongguo meng) for public consumption. Think of his new game plan as a Roy Orbison song with Chinese characteristics. It boils down to what Xi has termed "fulfilling the great renaissance of the Chinese race." And the dreaming isn't supposed to stop until the 20th Party Congress convenes in 2022, if then.
