JPMorgan is currently under investigation by the U.S. government for hiring the children of powerful Chinese officials in an effort to win business there. According to Andrew Ross Sorkin, if JPMorgan's Chinese hiring practices are found to have run afoul of the Foreign Corrupt Practices act, it will send "shudders" through Wall Street:

Virtually every firm has sought to hire the best-connected executives in China and, more often than not, they are the “princelings,” the offspring of the ruling elite.

But hey, that's China, where corruption is how business gets done, right? Not quite. Here's Sorkin again:

But hiring the sons and daughters of powerful executives and politicians is hardly just the province of banks doing business in China: it has been a time-tested practice here in the United States.

Sorkin goes on to extol the virtues of letting America's own "princelings" staff the ranks of powerful institutions because they're just so super-smart and well-connected. What the U.S. would prosecute as corruption in another country, Sorkin suggests, is actually good business in America.

What's ironic is that we've also learned this week that China is concerned with the possibility that Western ideas will penetrate their society and undermine faith in one party rule. From the looks of Sorkin's apologia, China's already got the hang of American meritocracy.

(AP Photo)

Email | Print | Permalink | Comments | Share

President Obama's "pivot" to Asia has been overshadowed by events in the Middle East, but as John Reed reports, that hasn't stopped the administration from implementing a policy of military encirclement around China:

The United States Air Force will dramatically expand its military presence across the Pacific this year, sending jets to Thailand, India, Singapore, and Australia, according to the service's top general in the region.

For a major chunk of America's military community, the so-called "pivot to Asia" might seem like nothing more than an empty catchphrase, especially with the Middle East once again in flames. But for the Air Force at least, the shift is very real. And the idea behind its pivot is simple: ring China with U.S. and allied forces, just like the West did to the Soviet Union, back in the Cold War.

One way to answer this is to flip the question: If China began using bases in Central America to station offensive air power, would the U.S. sit idly by?

The administration seems to be banking on a deterrent effect -- that the Chinese will see the constellation of forces arrayed against them and relent on some of their territorial claims and acquiesce, however begrudgingly, to American military dominance in their backyard. This is a high-risk roll of the dice, to say the least.

(AP Photo)

Email | Print | Permalink | Comments | Share

Michael Rubin makes what I think is a rather bold claim here:

At its root, China is an imperialist power, one more brutal than Europe’s formerly colonialist powers who, to this day, continue to beat themselves up over their nineteenth and early twentieth century pasts. The Tibetans have been victims, Taiwan—whose unique identity is apparent to any visitor—might become a victim, and the Uighur Muslims are victims, as are any group who are not Han Chinese.

I'll admit up front that I know more about Europe's colonial past than I do about China's, but still, the above struck me as off the mark. Is China's current treatment of Tibetans really worse than what the Spanish did to the Incas or what the British did in Kenya? I could be convinced otherwise, but I doubt.

So, dear reader, I ask: over the sweep of history, has China's imperial rule been more violent and brutal than Europe's?

(Photo: Wiki Commons)

Email | Print | Permalink | Comments | Share

Europeans are more likely to distrust banks than anyone else around the world, according to a new survey from Gallup:

Confidence in financial institutions was regionally weakest in the EU; among the 27 EU member states, a median 37% of residents said they have confidence in their country's banks, while 55% did not. However, the trust level in the U.S. was exactly as low as the EU median, in line with the record-low levels Gallup found three years after the recession officially ended in the U.S.

In sharp contrast to Europe and the U.S., many Asian countries have weathered the global financial crisis well and emerged with considerable economic momentum. This momentum helps explain why confidence in financial institutions was highest in Asia last year -- particularly among emerging markets in Southeast and South Asia, where median trust was 77% and 75%, respectively. In Sri Lanka, Thailand, Cambodia, and Malaysia, almost nine in 10 residents expressed confidence in the financial institutions in their countries.

Confidence in East Asia did not lag far behind its southern neighbors. Median trust in the region was 66%; in China, that figure was slightly higher at 72%.

None of this is terribly surprising, given the financial sector's role in plunging the U.S. and then Europe into a sustained crisis. But China may not be content with their financial institutions for very long. As the Economist has observed, China's banks are saddled with bad local government debt and "souring" property loans thanks to its recent "infrastructure binge."

(AP Photo)

Email | Print | Permalink | Comments | Share

China isn't the first country you typically think of when discussing Arctic matters, but they've just been admitted to the Arctic Council on an observer basis and will now have a seat at the table when Canada, the U.S., Russia and the Nordic countries set about wrangling over Arctic policy.

According to Gwynn Guilford, China wants in on Arctic issues less because of the region's reputed storehouse of hydrocarbons (an estimated 13 percent of the world's undiscovered oil reserves and 30 percent of undiscovered gas deposits) but because of its fisheries:

The ”new fishing grounds” will become “the world’s largest storehouse of biological protein,” wrote Tang Guoqiang, China’s former ambassador to Norway, in a recent paper.

As we recently discussed, fishing is a big business for China, so much so that it’s raiding the territorial waters of other countries. Arctic nations are currently mulling an accord to prevent fishing in the open water above the Bering Strait until scientists can assess fish stocks. The objective would be to manage commercial fishing, not to protect the fish habitat, noted the New York Times.

Email | Print | Permalink | Comments | Share

A new survey from the UN has found that over 50 percent of Chinese men have abused their partners in the past.

The results are equally shocking looking at the Asia-Pacific region, where six countries (China, Cambodia, Indonesia, Papua New Guinea, Sri Lanka and Bangladesh) were surveyed. One-in-four respondents admitted to having raped a woman, and one in 25 said they had taken part in a gang rape.

James Griffiths has more:

Speaking at a UN symposium on Gender-based Violence and Research in Beijing, James Lang, program coordinator of Partners for Prevention, called the preliminary findings "shocking".

"Violence is a complex phenomenon. Much of the research has been focused on women, but when we try to come up with solutions to reduce violence, we have to include men. That's the whole motivation behind the study," he said.

Researches in China interviewed more than 2,000 men. Over half of respondents confessed to physically or sexually abusing their wives or girlfriends. More shockingly, 25 percent of respondents said they had raped a woman, and one in 25 admitted to taking part in a gang rape.

In this context, monkey-mauling bear bicycle races seem downright enlightened.

Email | Print | Permalink | Comments | Share

In the Shanghai Wild Animal park, they race black bears and monkeys on bicycles (for some reason). It doesn't end well for the monkey.

Email | Print | Permalink | Comments | Share

Rahm Emanuel once said, "You never want a serious crisis to go to waste." The Chinese government should take heed of that advice.

Tensions on the Korean peninsula are getting worse every day. North Korea's apparent plan to conduct a large-scale military drill is just the latest in a series of bizarre provocations by the regime of Kim Jong-un. Because it helps finance the regime, the only country with any real influence over them is China.

China, deservedly, has a poor reputation in America and in much of the world. A list of grievances would include: human rights abuses, brazenly stealing intellectual property, conducting cyberattacks, selling missiles to Iran, a willingness to escalate tensions over the Japanese-controlled Senkaku Islands, and manipulating their currency to create an uneven playing field in the global marketplace (though many other countries also manipulate their currencies). In general, China acts less like a responsible actor on the world stage and more like a greedy, regional bully with global ambitions.

Is there something they could do to start repairing their reputation? Yes. Endorse regime change in North Korea. But, would they do that? Probably not.

While China has issued vague warnings about regional "troublemakers" and has shown signs of changing sentiments, it has taken no substantive action toward reigning in the pariah in its backyard. In fact, Deng Yuwen, who edits a prominent Communist Party journal, was suspended from his job for writing an opinion piece in which he suggested that China should abandon the North and support Korean unification.

Why is China maintaining allegiance to the North? As Andrei Lankov explains in the New York Times, there are two main reasons: (1) Regime change could result in chaos, meaning thousands or millions of refugees swarming into China, not to mention the possibility of the North's weapons getting into the wrong hands; and (2) A unified Korea would be a U.S. ally. China doesn't like either of those outcomes, so it prefers to maintain the status quo. Lankov concludes:

China faces a choice between two evils: a nuclear North Korea or a collapsing North Korea. And a collapsing North Korea clearly represents a greater evil.

Still, China should recognize that a unified Korea is in its long-term interests. A richer and more stable Korea would be a boon to the regional economy. And perhaps best of all, China would earn admiration around the globe for doing the right thing.

The unfolding drama on the Korean peninsula has given China a golden opportunity to demonstrate to the rest of the world that it can act like a responsible power. Let's hope they don't let this crisis go to waste.

Email | Print | Permalink | Comments | Share

China is infamous for its "Great Firewall" and extensive cyber-censorship, but a new NGO called the "Safety Alliance" isn't concerned with political speech. It's looking to hire workers to surf the web in search of porn (not exactly a needle-in-a-haystack assignment).

Lest you think this is some kind of joke, it's not (or at least, it doesn't appear to be). As you can see from the translated job requirements, you'll need a college degree to perform the required tasks of the Chief Porn Identification Officer:

1. Research and study pornographic videos and images, formulate criteria for determining obscenity.
2. Deploy courseware on the standards of obscenity determination, and study materials such as educational videos on pornography.
3. Manage and rate pornographic resources (including BT seeds, images, and online videos).

Job Requirements:
1. Familiarity with the different standards of determination of pornographic content of different countries;
2. Familiarity with the standards of determination and express regulations concerning pornography in China’s law;
3. Familiarity with the standards of pornography identification used by CNNIC (China Internet Network Information Center) and various major internet providers;
4. A bachelor’s degree or above; age between 20-35; all genders;
5. Possesses good teamwork skills, and a strong sense of responsibility.

The job pays about (U.S.) $32,000, although virtue is its own reward.

(AP Photo)

Email | Print | Permalink | Comments | Share

Ever since China imposed an export ban on critical rare earth minerals to Japan (minerals Japan's high-tech industry feeds on for products such as GPS chips and solar panels), China has seen its resource weapon lose considerable potency. Even after lifting the ban in 2010, China has not recouped its lost shipments. In 2012, Japanese imports of Chinese rare earths fell to their lowest level in 10 years thanks to Japan's efforts to diversify sources, recycle more aggressively and use alternatives.

Now things are about to get worse for China.

According to Reuters, Japanese researchers have found "astronomically high levels" of rare earths in the ground near an island Southeast of Tokyo. (The thing with "rare" earths, as RCW contributor Daniel McGroarty has explained, is that they aren't rare at all.)

Of course, these resources aren't immediately exploitable, but they do bolster Japan's ability to insulate itself from resource-bullying. It also underscores just how foolish it is for states to wield resource weapons in the first place. The importers, like Japan, suffer in the short-term but over the long-term, it's the producing states that wind up hurting the most as alternative measures are implemented.

(AP Photo)

Email | Print | Permalink | Comments | Share

China reportedly captured and returned 12 North Korean troops who had defected after shooting their senior officer.

According to Korean media reports, there have been a series of defections among North Korean soldiers due to food shortages. North Korean border troops have been forced to cultivate their own corn and potatoes to survive and several groups have decided to roll the dice on escaping, only to be caught by Chinese border patrols.

It's not just North Korean soldiers who are having trouble escaping. In January, the New York Times reported that it was becoming "increasingly difficult" to smuggle refugees out of North Korea thanks to a crack down by China's border control.

Meanwhile, the United Nations has formally approved a probe into North Korea's human rights abuses.

(AP Photo)

Email | Print | Permalink | Comments | Share

According to Japanese press reports, three political parties, comprising 76 percent of the seats in the lower house, have called for a change in Japan's Constitution. Specifically, they wish to revise "Article 9" which enshrines Japan's post-World War II pacifism.

The move to revise Article 9 is being led by the Liberal Democratic Party, whose leader, Shinzo Abe, is currently Japan's prime minister.

Most of the proposed revisions would assert Japan's right to "collective defense" and bestow official recognition on the country's Self-Defense Forces. The move is seen as a necessary first step for Japan to bolster its combat capabilities in light of its increasingly contentious standoff with China.

There is still some ways to go before Article 9 can be amended. A two-thirds majority in favor of the amendment must be achieved in both houses of congress. Elections for Japan's upper-house are due this summer.

That hasn't stopped Chinese media from firing a shot across the bow. Writing in the China Daily, Cai Hong claimed that the Abe government was ditching "Japan's commitment to world peace," which combined with his government's refusal to apologize for "Japan's aggression during World War II, the revision of Japan's constitution and easing of Japan's weapons exports is cause for concern for the rest of the world."

(AP Photo)

Email | Print | Permalink | Comments | Share

In a YouTube clip reportedly from a Syrian jihadi group called the "Mujahideen Brigade Front," a Chinese convert to Islam who claims to have fought in Libya and is now battling the Assad regime in Syria, apologizes to Syria on behalf of the Chinese for his government's support of the Assad regime.

He also threatens China with "economic sanctions" once the rebels prevail.

Foreign Policy has the translation.

Email | Print | Permalink | Comments | Share

Official statistics from China's health ministry indicate that the country's doctors have performed 336 million abortions since 1971 in support of the government's "one-child" policy.

In addition to the hundreds of millions of abortions, China has also sterilized 196 million men and women since 1971.

China's leaders have credited the one-child policy, which is often brutally enforced, with preventing overpopulation and spurring economic growth. Yet it is also leading to a serious demographic crunch as China ages, a dynamic which could imperil China's future growth.

The incoming government has pledged to "reform" its family planning policies, although it does not plan to eliminate the one-child policy.

(AP Photo)

Email | Print | Permalink | Comments | Share

The NewsHour conducted an interesting debate this between Kenneth Lieberthal of the Brookings Institution and Gordon Chang of Forbes about the Rise of Xi Jinping and the future of U.S.-China relations.

Email | Print | Permalink | Comments | Share

We're used to hearing about China's amazing 30 year run of blistering GDP growth. But there's another Asian country that has enjoyed 21 straight years of economic growth: Australia.

That's right, it's been 21 years since Australia has had a recession. That is the longest "for any nation at any time," according to Chris Richardson of Deloitte Access Economics.

What's the secret? China.

Australia has profited immensely from China's rise. Its mining industry serves as a key source of raw materials to fuel China's manufacturing industries. Australia's growth has also earned it the distinction of being the fastest growing rich nation in the world, according to Deloitte.

Yet with exports surging, Australia, like China, is trying to "rebalance" its economy to boost domestic consumption, an effort that has yet to yield much success.

And while Australia's economy is closely linked to China, the relationship is still marked by unease. Just today, Australia's central bank reported that it was attacked by hackers possibly operating in China. Australia recently agreed to station U.S. Marines at a base in Darwin and the country's strategic community has been engaged in a passionate debate (encapsulated well by Hugh White's The China Choice and the invaluable blog The Interpreteter) about the role it should play between China and the U.S.

(AP Photo)

Email | Print | Permalink | Comments | Share

This week China announced it would up its defense tab by 10 percent. While this may have been music to ears of America's military-industrial complex, the reality is more complicated and considerably less menacing.

First, as a report in the China Quarterly notes, inflation has eaten away at the real-world impacts of China's big defense spending increases, making them much lower than current figures suggest. The military is also receiving a declining percentage of Chinese government spending -- "it does not come close to dominating national priorities," the study's authors write.

Indeed, as Lily Kuo observed, China is actually spending more money on domestic, internal security than it is on its external defense forces. The Communist Party has 1.3 billion people to keep an eye on -- a "near enemy" that's considerably more dangerous to their rule than America's Pacific fleet.

China also faces significant demographic and economic pressures over the longer-term which could put a crimp in their defense outlays.

(AP Photo)

Email | Print | Permalink | Comments | Share

With no formal Coast Guard but plenty of coastal waterways in dispute, China has been cultivating its State Oceanic Administration into a "stealth navy" to "challenge existing maritime demarcations," writes Miles Yu.

Yu writes that the Marine Surveillance division of the Oceanic Administration has blossomed into robust fleet consisting of 13 ships, including several 4,000 tonners, and plans to launch 36 more vessels in the coming year. This ostensibly civilian service has 400 vessels, 10 aircraft and a transport plane, Yu notes.

According to a U.S. Navy official quoted by Yu, this fleet's sole purpose is harass other states' boats as it seeks to stake its claim in contested waters. Just last week, Japan claimed three ships from the Marine Surveillance division entered its territorial waters.

(AP Photo)

Email | Print | Permalink | Comments | Share

According to the Economic Observer, in the past two months three local Communist officials have killed themselves, joining a "growing number of high-ranking officials" who have committed suicide.

Published reports in China's state-run media typically attributed the deaths to depression but the public's reaction has been anything but sympathetic. The Observer noted that Internet users have taken to ridiculing the dead in part because the official reaction to these suicides has been so ham-fisted, with vague and elusive statements regarding the cause of death.

In some cases, such statements are clearly untenable. In 2011, Xie Yexin, an anti-corruption official, was found dead in his office with eleven stab wounds. After a "meticulous investigation," the authorities declared that Xie killed himself.

(AP Photo)

Email | Print | Permalink | Comments | Share

Watch China Looms as Main Concern in Obama and Abe Meeting on PBS. See more from PBS NewsHour.

Mike Mochizuki, associate dean of the Elliott School of International Affairs at George Washington University, was on the NewsHour yesterday and gave an interesting overview of the rising tensions between China and Japan.

Email | Print | Permalink | Comments | Share

They've done it at the movies:

Nearly one billion Japanese soldiers or enemies were killed off in TV productions filmed last year at Hengdian World Studios, the studio facilities known as the Hollywood of China, the Guangdong-based Yangcheng Evening News reports, suggesting that Chinese TV audiences like to achieve some degree of catharsis for their anti-Japanese sentiment with a high body count of enemy combatants in historical dramas.

As this figure breaks down as 2.7 million deaths per day for 365 days — a rate of over 30 per second — it seems reasonable to assume that most of these "deaths" occurred off-screen — or that this represents the cumulative total of every death in every series broadcast on myriad domestic networks. Put it this way: somewhere on Chinese television right now, Japanese people are being killed. And probably in large numbers.

In 2012, out of the more than 200 TV series broadcast on national networks, more than 70 of them had a wartime or anti-Japanese theme, more than any other "genre." The trend is definitely set to continue this year, said the newspaper.

The Yangcheng Evening News looks a bit like China's equivalent of the UK's Sun paper, so we shouldn't take these figures as authoritative.

(Photo: Reuters)

Email | Print | Permalink | Comments | Share

What do Americans fear most? When it comes to America's international security interests, the North Korean and Iranian nuclear programs are deemed most threatening, according to a new survey from Gallup. Americans were giving a list of nine developments and asked to rank them from more to less critical. Here are the top five threats Americans say are most critical:

1. The nuclear programs of Iran and North Korea (tied for first)
2. International terrorism
3. Islamic fundamentalism
4. The economic power of China
5. The military power of China

The poll was conducted before North Korea's most recent nuclear test.

Other issues that had previously ranked higher -- such as the Israeli-Palestinian conflict and tensions between India-Pakistan -- have declined.

Here's a look at the full list of Gallup's results:

(AP Photo)

Email | Print | Permalink | Comments | Share

Outside observers have long complained about the quality of official economic statistics from China but according to Asia Sentinel, the disconnect between what multinational corporations are reporting from China and what the Communist party is touting is growing sharper:

The assembled date, Walker says, indicate that 2012 was significantly weaker than either 2008 or 2009, even though the official GDP numbers show only a marginal tapering off.

"Demand in the real economy was as weak as the picture painted by our PMI and electricity production indicators," Walker writes. "Tax receipts and corporate earnings, not to mention what we know of cash flows in the first half of last year, also indicate the slowest economy in the last half decade, and not by a marginal amount."

Most of these figures show that the boom most China Bulls discovered in the second half of 2012, and the fourth quarter in particular, isn't there.

The Walker quoted above is Dr. John Walker of Asianomics. He has pegged China's real growth rate for 2013 at between zero and four percent. Official Chinese estimates are closer to eight percent.

(AP Photo)

Email | Print | Permalink | Comments | Share

During his State of the Union address, President Obama pledged to further cut America's nuclear arsenal. The exact figure wasn't specified, but it's been reported that the goal is to reduce the force from the current 1,700 "deployed weapons" down to 1,000, provided some kind of deal can be reached with Russia.

While China's nuclear arsenal is tiny in comparison, it has been undergoing a process of modernization and C. Raja Mohan argues that China will continue to stand aloft from any disarmament talks for the time being:

This approach leaves Beijing much leeway in responding to Obama's latest nuclear initiative. It allows Beijing to hold the high diplomatic ground on supporting the long-term goal of global zero, promising to join multilateral talks on nuclear reductions when it is convenient, and leaving room for its nuclear weapon modernisation in the interim.

Mohan argues that while most of America's close allies in Asia may be worried that America's "extended deterrence" would be weaker with a smaller arsenal, one major player is likely to be heartened by Obama's reductions:

In contrast to some in East Asia, India has every reason to welcome Obama's plans to negotiate deeper nuclear cuts with Russia. Like China, India has seen deep cuts in the US and Russian arsenals as an important first step on the road towards nuclear disarmament.

Email | Print | Permalink | Comments | Share

China has long propped up the North Korean regime as a buffer state between it and U.S. ally South Korea. But China's patience with North Korea is reportedly running thin and this latest nuclear test may be the atom that broke the camel's back, at least if China's web users had their say (which, of course, they don't).

Liz Carter of Tea Leaf Nation took the pulse of Weibo (China's version of Twitter) and found the response decidedly hostile to North Korea. One commentator described China's policy of propping up the Hermit Kingdom as "raising a mad dog to protect your house."

Josh Kim is also surveying China's online reaction, where several commentators have had harsh words for "Fatty Kim the Third." Lian Peng, anewspaper columnist, complained that the "bitterest loser" of North Korea's antics is China. Another, Yao Bo, argued that if "China continues to tolerate this thug nation, we will lose big."

The official Chinese reaction is more restrained, with the Foreign Ministry claiming to be "strongly opposed" to North Korea's nuclear experimentation.

(AP Photo)

Email | Print | Permalink | Comments | Share

It's a favorite saying of the Obama administration, but it's equally valid for China's rulers, according to a new report from the Lowy Institute's Linda Jakobson. Where many in the U.S. and the world see a rising China, most of China's elite (from businessmen to politicians) are instead "deeply worried" about the trajectory of their country and whether China can overcome "daunting" domestic problems, Jakobson writes.

The upshot is that foreign policy won't be a top priority for China's leaders and their policy will continue to be "reactive," Jakobson notes. Nevertheless, the contours of future trouble are evident in Jakobson's report. Among China's key foreign policy aims, she writes, the top priority is the stability of the regime -- a stability which could be endangered if China is seen as being humiliated by foreigners in China's growing web of territorial disputes.

The potential for conflict with Washington is also prevalent. The biggest flash point, according to Jakobson, is U.S. intelligence gathering in China's "exclusive economic zone." The U.S. believes UN laws permit such activity, while China disputes that and both have military assets in the zone to monitor and (in China's case) intercept reconnaissance flights.

(AP Photo)

Email | Print | Permalink | Comments | Share

Tensions have been steadily rising in the Pacific as China and her neighbors butt heads over disputed territories in the South and East China Sea. While the U.S. has tried to dampen tensions, Captain James Fanell, a top intelligence adviser to the U.S. Pacific Fleet, used what the Lowry Institute's Sam Roggeveen described as "bracing" language when describing China's naval ambitions at a recent conference. According to Fanell:

"...China is knowingly, operationally and incrementally seizing maritime rights of its neighbours under the rubric of a maritime history that is not only contested in the international community but has largely been fabricated by Chinese government propaganda bureaus in order to 'educate' the populous about China's rich maritime history, clearly as a tool to sustain the Party's control."

James Goldrick, a retired Rear Admiral in the Royal Australian Navy explains China's approach:

The danger is that a combination of China's self-image as the Middle Kingdom and continentalist ideas of strategy may manifest themselves in efforts to create what can only be described as an ever extending 'Great Wall over the Sea'. This is why the territorial concepts which are sometimes mentioned in relation to the South China Sea (in particular the 'nine dashed line') should be of such concern, as should some of the recent ideas about the way in which offshore oil platforms might be employed as instruments of sovereignty.

Basically, Goldrick argues that China views the seas as "blue territory" and not a "commons" accessible to all.

Email | Print | Permalink | Comments | Share

A 101-year old woman in China "woke up" after being declared dead and being unconscious for 16 hours. The best part: she was already in the funeral home, in a shroud and was being laid in the coffin when she opened her eyes and protested that she wasn't dead. No word on how rattled the funeral home workers were...

The woman was, according to reports, in "very good spirits." The assembled mourners than pivoted to party mode.

(AP Photo)

Email | Print | Permalink | Comments | Share

According to a recent survey from the World Wide Wind Energy Association, China is the world's leading producing of wind power. They boast a total of 67.8 gigawatts of wind power capacity. The U.S. is a fairly close second, with 60 gigawatts of wind power generation. Germany, Spain and India round out the top five.

Personally, I think the U.S. could probably vault to the top spot if it harnessed the abundant flow of hot air emanating from its capital.

(AP Photo)

Email | Print | Permalink | Comments | Share

Last year, Apple came into some fierce criticism for poor conditions at its suppliers' factories in China. Today, Apple gave the boot to a supplier for using child labor:

Apple has terminated a contract with Chinese circuit board manufacturer PZ after discovering 74 under-age workers were working there.

The workers, who were all under 16, had been supplied by a regional recruitment company who gave them fake identity papers, the tech giant said.

They have since been returned to their families.

In the short term, this mismatch is going to do damage to China's attractiveness as a destination for low-cost manufacturing, but longer-term it's going to put immense strain on white collar work around the world. Consider what happened to U.S. manufacturing as rural Chinese flooded into urban factories over the past three decades. Now imagine what happens to higher-skilled work as the children of those factory workers graduate from college with advanced degrees and compete on a globalized market. Those jobs may not be as susceptible to out-sourcing as factory jobs were (although that's a point of debate), but it would be naive not to think the ramifications are potentially just as significant.

(AP Photo)

Email | Print | Permalink | Comments | Share

Bubble, bubble:

China’s central bank, the People’s Bank of China, just okayed 3 trillion yuan ($482.6 billion) in new lending for 2013. It’s not much more than what it allowed in 2012—but still a considerable sum for a country struggling with overcapacity.

That’s merely worrisome though. What is actually stomach-churning, though, is the 679% year-on-year increase in “trust loans” disbursed in December, hitting 264 billion yuan. And, yes, that’s 679%, not a typo. (We recently explained in detail why these super-shady investment vehicles—which allow banks to finance off-the-books loans to companies and local governments by offering them to their retail customers as investments—should unnerve everyone, but the key words here are “Ponzi” and “scheme.”) The central bank also noted today that it expects a 16% year-on-year increase in “total social financing,” a hefty portion of which is trust loans.

Meanwhile, Kate Mackenzie worries that this is proof that China has failed to "rebalance" its economy away from state investment and toward a consumption based economy. Matthew Yglesias is less concerned:

To MacKenzie (or her headline writer) that means China "still has the same old problems." I would say the other way to look at that is that China still doesn't have the same old problem of having settled into a slow-growth, low-resources-utilization equilibrium that we see in much of the developed world.

One thing we learned from the U.S. financial crisis is that there's no gentle unwinding of bad debt when it's this pervasive. China, fortunately, is not as intertwined into the global financial machinery as U.S. and European banks are, but we'd be fooling ourselves to think that a financial crisis leading to a recession or sharply curtailed growth in China wouldn't have ripple effects on the global economy.

Still, before that financial Armageddon arrives we'll be able to enjoy an influx of Chinese gadgets:

China's industry ministry Tuesday set an aggressive goal of forging global giants in the electronics sector within the next two years through mergers and alliances and reiterated a long-standing push for Chinese companies to explore overseas acquisitions.

(AP Photo)

Email | Print | Permalink | Comments | Share

So bad that a factory fire raged for three hours before anyone noticed it through the smog.

Email | Print | Permalink | Comments | Share

Joe Glenton argues that Western policymakers may be crying "jihadi" in Mali, but they're secretly worried about China too:

Mali and the other former French colonies which surround it have had extensive dealings with China. The country, one of the poorest in the world, has received substantial Chinese money for development. In 2011 China made good on a package of hundreds of millions, partially as a “gift” to improve the “living standards of Malian people”.

Some argue that China will sit back and let the French do its work for it by handling the crisis and restoring some kind of stability, with China perhaps moving back in later. Contrary to that view, it is worth considering that the intervention may be at least partially informed by a need to counter the Chinese, certainly on the part of the US and also on the part of major European countries.

For what it's worth, I don't doubt that prior U.S. and Western investment in Mali and other African nations had at least half an eye on China's rising influence there (China is said to have 2,000 citizens and roughly 20 firms operating in Mali), but that would hardly be a sufficient condition to motivate such a hasty intervention.

Moreover, I honestly cannot imagine Western policymakers would be so naive -- and historically ignorant -- to believe that a military campaign would foreclose the possibility of restored Chinese influence in Mali after the war. It didn't happen in Iraq or Afghanistan, where China was able to swoop in and scoop up resource contracts when the dust had partially settled. It's more likely that the West is acting against a perceived urgent threat and that the longer-term strategic implications with respect to China are pretty far on the back-burner.

(AP Photo)

Email | Print | Permalink | Comments | Share

...in two days. ABC's Kaijing Xiao has the story:

According to the figures released by Taobao and Tmall, China’s two biggest shopping websites, 500,000 masks were sold in two days. That number was three times more than the previous week.

The air quality index, or “AQI,” is how both the U.S. Embassy and Chinese government computes air quality. As set by the Environmental Protection Agency (China uses its own environmental agency) the AQI measures five different pollution components. PM2.5, or particles smaller than 2.5 microns, are considered the most harmful to your health because they get deeper into the lungs and can be absorbed directly into the bloodstream. Short-term effects of air pollution commonly include coughing, shortness of breath, eye irritation, headaches, nausea and dizziness.

It has been three days since I got back to Beijing, I haven’t seen the shape of the sun yet, and my chest has been feeling a consistent pain. Because Beijing sits in a basin, once the bad air gets in only a strong wind can push it out. Winds are expected in the coming days, and they can’t get here soon enough.

And it only appears to be getting worse, according to James Fallows:

The readings in the past few days have been in the previously unimaginable 700s-and-above range, reported as "beyond index" by @BeijingAir. The worst I have personally seen in Beijing was in the high 400s, and that day I did not understand how life could proceed any further in such circumstances. The conditions this weekend have been much worse

Email | Print | Permalink | Comments | Share

The last several presidential campaigns have seen increasing angst over the outsourcing of American jobs to lower-wage locales such as China and Southeast Asia. One enterprising software coder, however, took advantage of this new era of liberal labor rules by outsourcing his own job to China:

A security audit of a US critical infrastructure company last year revealed that its star developer had outsourced his own job to a Chinese subcontractor and was spending all his work time playing around on the internet....

After getting permission to study Bob's computer habits, Verizon investigators found that he had hired a software consultancy in Shenyang to do his programming work for him, and had FedExed them his two-factor authentication token so they could log into his account. He was paying them a fifth of his six-figure salary to do the work and spent the rest of his time on other activities.

The analysis of his workstation found hundreds of PDF invoices from the Chinese contractors and determined that Bob's typical work day consisted of:

9:00 a.m. – Arrive and surf Reddit for a couple of hours. Watch cat videos

11:30 a.m. – Take lunch

1:00 p.m. – Ebay time

2:00-ish p.m – Facebook updates, LinkedIn

4:30 p.m. – End-of-day update e-mail to management

5:00 p.m. – Go home

Not only did "Bob" outsource his own job -- he took jobs at other firms and outsourced them as well. He is now out of a job. Truly, globalization giveth and globalization taketh away.

Email | Print | Permalink | Comments | Share

Clifford May argues that Stratfor's Robert Kaplan is wrong to worry about Asia's brewing nationalism:

Similarly, in Asia, Kaplan sees China, Japan, and other nations “rediscovering nationalism,” undermining the notion that “we live in a post-national age.” He adds: “The disputes in Asia are not about ideology or any uplifting moral philosophy; they are about who gets to control space on the map.” True, but is the revival of such nationalistic sentiment really a crisis or even a major problem? Meanwhile, much more significant, Islamists are offering an alternative to both the old nationalist and the newer post-nationalist models.

It seems self-evident to me that Asia's disputes are considerably more worrisome. Islamists may be offering alternative models to discredited pan-Arab movements, but it doesn't mean the countries they lead (or could lead, if they take power) have much in the way of power or influence on a global scale. We know that when militant Islamist groups take power, the country in question tends to fail (see Afghanistan, Iran, etc.). Egypt's Brotherhood may offer an alternative to Taliban-style militancy, but then it will be stripped of the elements that make it dangerous to Western interests. Islamist governments of the kind May fears produce dysfunction, not global power.

The principle threat Islamism poses to the West is sporadic terrorism. There are some worst-case scenarios which could see sweeping upheaval across the Mideast that deposes the Saudi monarchy and plunges the global energy market into a major crisis. There's also the possibility that terror networks in Syria and Iraq could disrupt regional energy resources. That's clearly a danger, but one that carries the seeds of its own solution -- i.e., the more terrorism disrupts Middle East energy supplies, the faster the globe will transition away from Middle East energy. (A smart political class would be trying to head this off now, by reducing the use of oil -- not just producing more of it domestically -- but that's an argument for another day.)

Switching to Asia, the dynamics are just as combustible but the players far more important. It touches on two U.S. treaty allies, South Korea and Japan. It implicates three of the largest economies in the world (China, Japan, and the United States) as well as major maritime trade routes. The potential for conflict is rife, since unlike the Middle East where every country knows who owns what oil field (for the most part), Asia's untapped resources lie in contested waters. There's just as much history and bad blood among the major players in Asia as there is among the Mideast's various rivals (if not more), but unlike the Mideast, Asian states have advanced militaries.

So I think Kaplan has it right: we should be more concerned with Asia's brewing conflicts than Islamism.

Email | Print | Permalink | Comments | Share

China's torrid economic growth is one of the most spectacular tales of human improvement in recent memory, with literally millions of people being lifted from poverty into higher standards of living. Yet it's come at a cost -- environmental devastation on a truly large scale, as a new study from the Australian Research Council makes clear. To wit: China's coastlines have lost 80 percent of their coral reefs due to pollution, over-fishing and development.

To make the matter more challenging, some of the devastated coral is located in parts of the South China Sea with multiple claimants. Whoever assumes control over these waterways will not only inherit resource rights, but a serious ecological problem to boot.

(Photo: California Academy of Sciences)

Email | Print | Permalink | Comments | Share

More evidence that China's assertiveness over its territorial disputes is backfiring:

Anti-Japan riots in Beijing, Shanghai and elsewhere in China in September triggered by Japan's nationalization of the disputed Senkaku Islands brought vandalism and violence to Japanese restaurants, stores and car dealers and a boycott of Japanese products.

The disturbances prompted Japanese companies to worry that they have been too dependent on China for their sales and production and thus should consider diversifying their global exposure.

The "China-plus-one" concept, in which firms look to establish footholds elsewhere in Asia, was fostered several years ago but since September has gained greater traction.

Many Japanese firms are now looking to other emerging Asian markets to spread their risks.

James Clad and Robert Manning dubbed this "China's self-containment" and it appears to be unfolding before our very eyes. It does not appear that Asian states will meekly drop into Beijing's orbit as compliant satellites. Instead, it looks like they will push back against pressure from China, heightening the risks of a conflict -- one that would almost certainly implicate the U.S.

Email | Print | Permalink | Comments | Share

Brian Dumaine reads the latest global trends report from the National Intelligence Council and concludes that China could hit a rough patch:

One theme in particular that stands out this year is the coming food and water crisis in China. According to the report, climate change coupled with China's move toward urbanization and middle class lifestyles will create huge water demand and therefore crop shortages by 2030. As the report states: "Water may become a more significant source of contention than energy or minerals out to 2030."

Globally, demand for food is estimated to increase by more than 35% by 2030 and that means the world will need more water. After all, agriculture and livestock account for 70% of our water use. According to a major international study, global water requirements—mostly to sustain agriculture and livestock—will rise to 40% above our current sustainable water supplies.

China is particularly vulnerable to this trend. The report points out, for example, that cereal production in China faces significant challenges from environmental stresses relating to water scarcity—the melting Himalayan glaciers aren't helping—soil depletion, and pressures on land availability from urbanization. China is a major wheat producer and the second-largest producer and consumer of corn after the US.

Email | Print | Permalink | Comments | Share

By all accounts, the North Korean missile test was a significant technical milestone in the advancement of the country's arsenal. Jonathan Pollack wonders whether the test will strain the Hermit Kingdom's ties to China:

The bigger risks for Pyongyang concern its relations with China. The US, Japan, and South Korea have already called for an emergency meeting of the UN Security Council, since the North’s test are in direct violation of Resolutions 1718 and 1874, which prohibit North Korea from undertaking any rocket tests “using ballistic missile technology.” Since North Korea announced on December 1 that it would attempt another satellite launch, there have been persistent reports that the Obama Administration would seek to impose even harsher sanctions, even though North Korea is probably already the world’s most heavily sanctioned state. The US thus seems very likely to put great pressure on China to agree to additional sanctions. In recent weeks, the Chinese have openly cautioned the North Koreans from undertaking another test, without signaling what China would do should Pyongyang decide to test. Beijing’s first comments on the test had an ominous tone: “all parties concerned should stay cool headed and refrain from stoking the flames so as to prevent the situation from spiraling out of control.” How China chooses to respond will be the first foreign policy challenge for the newly installed Party General Secretary Xi Jinping.

Email | Print | Permalink | Comments | Share

Zheng Wang explores China's historical memory and how it impacts present day attitudes:

The English translation of the Chinese phrase "Wuwang Guochi" is "Never forget national humiliation." It is the title of the book that I have just published. In this book, I refer to it as the "national phrase" of China. The Chinese characters associated with this motto are engraved on monuments and painted on walls all over China. For the Chinese, historical consciousness has been powerfully influenced by the so-called "century of humiliation" from the First Opium War (1839-1842) through the end of the Sino-Japanese War in 1945. The Chinese remember this period as a time when their nation was attacked, bullied, and torn asunder by imperialists.

As the research in this book has identified, China's unique national experiences, most significantly pride over its civilization as well as a collective memory resulting from the "century of humiliation" vis-à-vis Western powers, have played a crucial role in shaping the Chinese national identity.

Wang notes that China's educational system was revamped in the 1990's away from the class struggle narrative and toward a "victimization narrative" with the West as the principle architect of said victimization. If China were to move to a a multi-party democracy, Wang writes, these narratives could easily be seized on by nationalist leaders to mobilize support.

This is something many policymakers in the U.S. need to be mindful of. There's a thread that runs through some hawkish commentary on China that until the country democratizes to Western standards, the U.S. can never have a good relationship with Beijing. This stance not only overlooks the nationalist dangers that democratization could provoke, it also reinforces the idea in China that the West is intent on dominating their domestic politics. And as Wang notes, that is a potent historical grievance -- one the U.S. should be mindful of.

(AP Photo)

Email | Print | Permalink | Comments | Share

Daniel Gross dives into the figures:

Over the past few years, our dependence on China as a lender has declined in both absolute terms and in relative terms. For all those who say the U.S. doesn’t make anything the world wants, look no further than the Treasury’s monthly statement of the public debt, which can be seen here (PDF). We manufacture government debt. And the world buys it. In the recently concluded fiscal year, the deficit was about $1.1 trillion. Between September 2011 and September 2012, the grand total of marketable debt held by foreigners rose from $4.9 trillion to $5.455 trillion, or about $555 billion.

So, yes, the amount of debt owned by foreigners has risen in the past year. But the portion of the debt owned by foreigners has stayed about the same—at about 51 percent—and the portion owned by China has fallen sharply. China’s total holdings of U.S. debt are about where they were in the middle of 2010, when the volume of total U.S. debt was much smaller.

Email | Print | Permalink | Comments | Share

As the U.S. produces more and more of its own energy, the rationale for sustaining a large forward military presence in the Persian Gulf starts to weaken. But it's not like Middle Eastern energy won't find willing consumers. Instead, Gulf oil will flow to Asian markets, which puts major Asian oil consumers like China in something of a bind, as John Mitchell explains:

The United States military and naval presence contributes to stability in the Middle East and protects oil shipping through the Straits of Hormuz. This oil now goes east, not west, and the US security of oil supply no longer depends on it. Under these circumstances, how far will the US go to defend sea lanes that mainly benefit Asian markets?

The flip-side to this subsidy is that U.S. "defense" of Gulf sea lanes is another form of leverage over rivals like China. Any military force strong enough to keep the Gulf open could, in theory, close the Gulf down in a time of crisis (albeit at enormous costs to the global economy). That, in turn, will surely weigh on the minds of any Chinese strategist if (or when) the security competition between the U.S. and China really heats up.

On the other hand, the job of keeping the Gulf sea lanes open comes with a host of costs, like terrorism and military interventions, that the Chinese are probably happy not to bear.

Email | Print | Permalink | Comments | Share

One Russian analyst thinks the Chinese have a lot more warheads than the U.S. assumes:

China has nearly 750 theater and tactical nuclear warheads in addition to more than 200 strategic missile warheads, a stockpile far larger than U.S. estimates, according to a retired Russian general who once led Moscow’s strategic forces.

New details of China’s strategic and tactical nuclear warheads levels were disclosed by retired Col. Gen. Viktor Yesin, former commander of Russia’s Strategic Rocket Forces, during a conference several months ago. A copy of Yesin’s paper was translated last month by the Georgetown University Asian Arms Control Project and obtained by the Washington Free Beacon.

Either way, the "consensus" appears to be that China has about 240 nuclear weapons (give or take a hundred).

Email | Print | Permalink | Comments | Share

Brian Fung explains:

Here's how it works: the National People's Congress brings together some 2,000 delegates. Those representatives are responsible for choosing between 200 and 300 members of what's called the Central Committee of the Communist Party. Out of those, 24 ascend to the ultra-powerful Politburo, which in the past has been responsible for many of China's major decisions. But it doesn't end there. Above the politburo sits the country's highest decision-making body, the Politburo Standing Committee (PSC). It's effectively a seven-member inner cabinet staffed by China's most powerful individuals, who themselves are drawn from the 24-member politburo.

Email | Print | Permalink | Comments | Share

This chart, via Stuart Staniford, shows cement production. As Staniford notes, cement is a good proxy for construction activity and the chart shows how China kept surging while the rest of the world began a downward trend.

Email | Print | Permalink | Comments | Share

That's the evocative imagery used by Michael Pettis to describe China's stimulus-induced growth strategy:

It is as if you saw a middle-aged man in terrible physical shape running a marathon, and you predicted that after five or six miles he would be forced to quit. If however he took out a syringe and shot himself up with crystal meth, he would be able to continue running a few more miles, but this doesn’t mean that your analysis and prediction were wrong. It means that in a few more miles he will be worse off than ever (or will have to take an even bigger dose of crystal meth).

That's via Naomi Rovnick who offers some bullish takes on China:

The Beijing government has not announced a major economic stimulus project, as it did in 2009-10. But since the summer, central and local planners have begun propping up GDP with lavish spending on new projects. Industrial production rose 9.2% in September, year on year, after touching a 39-month low in August. So it is likely Chinese manufacturers are seeing the horrific conditions they have been laboring under start to ease.

I would say there are about as many people worried about a crashing (but not collapsing) China as there are about a rising one.

Email | Print | Permalink | Comments | Share

China is about to be replaced as America's biggest creditor by Japan:

China is poised to lose its place as the U.S.’s biggest creditor for the first time since the height of the financial crisis, blunting one of Mitt Romney’s favored attacks in the presidential campaign.

Chinese holdings of Treasuries rose 0.1 percent this year through August to $1.15 trillion, Treasury Department data on international capital flows released today show. Japan, a stronger ally of the U.S., raised its stake by 6 percent to $1.12 trillion, on pace to top the list of foreign creditors by January.

Getting tough on Japan just doesn't have the same ring to it.

Email | Print | Permalink | Comments | Share

China's been something of a 2012 campaign punching bag, but Tyler Roylance wonders if the candidates are missing an important angle when it comes to the rising power:

Like generals preparing for the last war instead of the next one, President Barack Obama and Mitt Romney, his Republican challenger, have built their China-related campaign rhetoric around the notion that the Chinese are out to steal American jobs by manipulating exchange rates and heavily subsidizing their booming export industries. But this story of rapid, state-led economic growth is increasingly a thing of the past. As China's economy slows, the real concern for the next U.S. administration should be the potential fallout from a hard landing, including social unrest and political ferment.

Indeed. It's probably not good form to muse openly about a U.S. response to a Chinese "hard landing" - particularly one that unseats the Communist party - but hopefully it's something everyone is thinking carefully about.

Email | Print | Permalink | Comments | Share

We've heard a bit in recent days about how Japan's security establishment is drifting to the right - becoming more assertive over its claims to disputed Islands also claimed by Russia and China.

But as Justin Logan points out, nationalist bluster aside, Japan is actually cutting its defense spending. Moreover, in response to the U.S. pivot, China is upping its own defense budget. These are two trend lines moving in the wrong direction.

Of course, the U.S. taxpayer is on the hook, as Logan notes:

So if Japan’s leaders are getting increasingly concerned about security, why are they cutting defense spending? Simple: They believe that they have a defense commitment from the United States that can serve as their deterrent against China.

So when you hear members of Congress rending their garments about sequestration, remember what they are worried about: the prospect that the transfer payments from American taxpayers to taxpayers in places such as Japan may be trimmed.

Email | Print | Permalink | Comments | Share

The crisis between China and her neighbors over a series of contested islands has been steadily ratcheting up. Duong Huy does a deep dive into the legal basis for China's broad claim and finds it wanting.

Email | Print | Permalink | Comments | Share

James Clad and Robert Manning make the case for deft diplomacy in the South China Sea:

Of course, we can keep relying on America's countervailing actions, knowing that China doesn’t play well in a multilateral space. But this game is prone to miscalculations by all sides. Nor does there seem much to gain from spending more time on “confidence building measures” or on a “multilateral security architecture” of regional groupings heavy on acronyms and light on results.

To find something new, we might try looking backwards – to a type of split-the-difference US diplomacy last deployed after Russia and Japan had fought a war in 1905. The next year, Theodore Roosevelt brokered a peace that lasted three decades, allowing China, Europe and the US to adjust to Japan’s rise as a major power.

To achieve something similar today would mean finding ways to facilitate commercial exploitation of the South China Sea. Privately, some chief executives of Chinese energy companies have spoken recently of their desire to form offshore joint ventures with western companies. Such joint exploitation could proceed by means of agreements resting expressly on a “without prejudice” basis – where companies, and the states in which they are domiciled, would make clear that mutual oil and gas exploration and production would occur “without prejudice” to their parent country’s sovereign claims. The competing claimant countries could agree among themselves as to which companies might participate in extraction in the areas in dispute.

Who knows if this would work, but it sounds like an idea worth pursuing.

Email | Print | Permalink | Comments | Share

In the most recent issue of Foreign Affairs, Aaron Friedberg, a China expert and adviser to the Romney campaign, published a long piece arguing that it was time for the U.S. to get tougher with China. Friedberg begins by describing America's current strategy:

Although U.S. policymakers have grown more circumspect in recent years, they have long hoped that trade and dialogue would help eventually transform China into a liberal democracy. The other half of Washington's China strategy, the balancing half, has looked to maintain stability and deter aggression or attempts at coercion while engagement works its magic.

But this isn't working, he writes:

The CCP's determination to maintain control informs the regime's threat perceptions, goals, and policies. Anxious about their legitimacy, China's rulers are eager to portray themselves as defenders of the national honor. Although they believe China is on track to become a world power on par with the United States, they remain deeply fearful of encirclement and ideological subversion. And despite Washington's attempts to reassure them of its benign intentions, Chinese leaders are convinced that the United States aims to block China's rise and, ultimately, undermine its one-party system of government.

What's odd here is that Friedberg is essentially arguing that China's leaders have it right: they have correctly understood American strategy (as stated by Friedberg in the first graf). Whatever Washington is doing to reassure them, it's clear (from the Communist Party's standpoint) that America's intentions are not benign. Friedberg's advice largely hinges on making the Communist Party feel even less secure - on the grounds that if a little insecurity and sense of besiegement have not produced Washington's desired outcome, doubling down on the strategy will do the trick.

An alternative (better?) strategy might be to disaggregate America's concerns for how China is governed - an issue that is not properly Washington's business anyway - with how China behaves abroad. Many insist on drawing linkages between the two - and undoubtedly some do exist - but it's hard to see how a democratic China becomes less interested in natural resources in the South China Sea or less immune to the nationalist urge to make expansive and aggressive claims on other nation's territorial waters. By objecting not just to China's behavior, but to the legitimacy of its very system of government, the U.S. takes an already difficult problem and makes it infinitely harder to manage.

Friedberg also offers some suggestions for how to right the military balance in Asia. Much of it makes sense - the U.S. should harden its facilities in range of China's increasingly sophisticated missiles and develop new capabilities that are less vulnerable to Chinese attack. But the advice is anchored in what I'd argue is a very questionable assumption:

Failing to respond adequately to Beijing's buildup could undermine the credibility of the security guarantees that Washington extends to its Asian allies. In the absence of strong signals of continuing commitment and resolve from the United States, its friends may grow fearful of abandonment, perhaps eventually losing heart and succumbing to the temptations of appeasement. To prevent them from doing so, Washington will have to do more than talk. Together, the United States and its allies have more than sufficient resources with which to balance China. But if Washington wants its allies to increase their own defense efforts, it will have to seriously respond to China's growing capabilities itself.

Won't this have precisely the opposite effect - i.e. the more America does, the less its allies will do? Haven't we already seen the script play out already in Europe? Why yes we have.

In fact, Asian militaries have been bulking up since before the Obama administration made its famous "pivot" to Asia. There is every reason to believe that Asian states will continue to invest in their defenses and that American moves to beef up their own defenses, particularly the kind of lavish, Cold War-style commitment Friedberg advocates, would take the pressure off. At a time when the U.S. is up to its eyeballs in red ink, this hardly makes much sense.

Friedberg's reasoning flies in the face not just of the very recent and relevant history of European defense spending, but in the face of his party's own orthodoxy when it comes to how incentives work. To understand how discordant this is, imagine Mitt Romney saying that the best way to get people to work is to give them lavish unemployment benefits and promise to support them no matter what they do.

However Friedberg is right to note that the trajectory of the U.S.-China relationship appears rocky and that some form of security competition is already underway. Anyone seeking some ideas of how a prospective Romney administration might approach this competition would do well to grapple with his arguments.

(AP Photo)

Email | Print | Permalink | Comments | Share

David Frum argues that the U.S. must remain the world's top dog:

The prospect of the U.S. as number 2 is a threat and challenge. So long as China remains a repressive authoritarian oligarchy, the prospect of a world reordered to meet Chinese imperatives is an ugly one.

The U.S. has only been the undisputed leading global power for about 30 years, meaning that for most of American history we have had to contend with either equal or stronger global powers, some of whom did not share our values and had conflicting interests.

Additionally, China has not proven that it can reorder its own backyard (although it clearly wants to) and they have never evinced any sign of having the kind of global ambition that so regularly infects America's Wilsonians and neoconservatives. And even in the event China overtakes the United States and suddenly decides it wants to exert its benevolent hegemony over the world, it would be opposed by a coalition that would likely include - at a minimum - the EU, Japan, India, Australia, the UK and the United States. Almost every major power, that is, except Russia and Brazil. China might find it rather lonely at the top.

A world with a more powerful China will not pose any ideological threat to the United States or the idea that free-market capitalism is the best way to organize a society. The biggest threat to that idea are the free-market capitalist societies themselves, which are busy imploding or staggering along with sub-par growth. Righting that ship has very little to do with the relative position of China - and would be the right thing to do with or without the prospect of a rising China. And China has already embraced the market (albeit with a heavy dose of state interference). Moreover, the lack of freedom in China's one-party state is not something that they have expressed much interest in exporting to other countries.

By all means the U.S. should take China seriously - more seriously than it has to date. As far as potential challenges to global stability goes, the territorial disputes in Asia are arguably more dangerous than an Iranian nuclear weapon. But we're not facing a Cold War style contest for global supremacy. Acting otherwise is not conducive to clear-headed thinking about what the U.S. does next.

Email | Print | Permalink | Comments | Share

Senator James Webb is concerned about China:

While America's attention is distracted by the presidential campaign, all of East Asia is watching what the U.S. will do about Chinese actions in the South China Sea. They know a test when they see one. They are waiting to see whether America will live up to its uncomfortable but necessary role as the true guarantor of stability in East Asia, or whether the region will again be dominated by belligerence and intimidation.

The Chinese of 1931 understood this threat and lived through the consequences of an international community's failure to address it. The question is whether the China of 2012 truly wishes to resolve issues through acceptable international standards, and whether the America of 2012 has the will and the capacity to insist that this approach is the only path toward stability.

We're likely to hear more of this type of rhetoric as Asia's territorial drama heats up. Unfortunately this is where Webb ends his op-ed. It would have been more profitable to spell out more concretely just what he thinks the U.S. should do vis-a-vis China's claims. Vague invocations of will really aren't sufficient. Current U.S. policy - that these disputes be settled diplomatically - sounds reasonable, but what else should the U.S. be prepared to do if China (or other Asian claimants like Vietnam) assert broad claims? If this is a "test" - what constitutes passing?

Email | Print | Permalink | Comments | Share

Bill Powell says that after pinning its hopes on solar, Chinese firms are finding it to be a "capital destruction" machine:

These are epic, historic collapses in market valuation, made all the more stunning by the assumption, so prevalent just four years ago, that "clean" energy's time had come. How ironic it is that Barack Obama's insistence that the United States invest government money into the creation of so called "green jobs" -- which led to the debacle of Solyndra and other wasted investments -- was predicated on the fact that if the U.S. didn't do so, the industry of the future would be Made in China. A credulous political press, egged on by the environmental lobby, swallowed the reasoning wholesale.

Powell argues that solar's ability to reach "grid parity" - where it is price competitive with other fuel sources - has been dealt a big blow by the collapse in U.S. natural gas prices, but may yet still happen in China, where gas is still expensive. That is, until they start fracking.

Email | Print | Permalink | Comments | Share

The news that China imported more oil from Iran in June than it did on average the previous year brought to mind an interesting series of questions.

The Chinese, we're told, are masters of realpolitik - coldly weighing their strategic interests. They're certainly not shy about protecting what they view as core interests, as evidenced by the dust-up over the South China Sea. So why are they not concerned about the potential for a nuclear Iran to "dominate" the Middle East, as so many American strategists are? Do the Chinese have a better read on the consequences than their American counterparts? Are they naive or is Washington alarmist?

A few possible answers come to mind. The first is that China isn't in much of a position to contest Iran's pursuit of a nuclear weapon (or some form of nuclear capability) outside the generally ineffective mechanisms of sanctions and lecturing, and so they're simply prepared to deal with whatever environment arises when/if Iran eventually goes nuclear. The second possibility is that they believe that the Iran threat is inflated and that an Iran with a nuclear weapon won't ultimately act to endanger the flow of energy through the Mideast. A third possibility is that they think a nuclear Iran would, in effect, balance against U.S. power in the region. In this view, China would apply the same principle to the region that the U.S. does - that no one power should dominate - only directed against America's actual dominance and not Iran's latent potential.

It's not clear which of these possibilities is the operable concept. In all likelihood, it's a delicate balance among several competing priorities. As Richard Weitz noted, China ultimately does not want to see a nuclear-armed Iran, but neither does it want regime change or another war in the Middle East.

(AP Photo)

Email | Print | Permalink | Comments | Share

China's getting beaten up in the U.S. presidential campaign for its practice of currency manipulation, but according to the Peterson Institute's Joseph Gagnon, most of the world's worst currency manipulators are close U.S. allies. Here's the ranking of the worst of the worst:

China
Japan
Saudi Arabia
Russia
Taiwan
Korea
Hong Kong
Switzerland

Hit the link for the full list.

Email | Print | Permalink | Comments | Share

A new game - Defend the Diaoyu Islands - recently popped up on Apple's app store. According to the Register, the game had players defending islands in the East China Sea from a Japanese invasion. From the game's description:

Defend the Diaoyu Islands, for they are the inalienable territory of China! Recently, the Japanese government has been sabre-rattling, making attempts to seize the Diaoyu Islands and even arresting our fishermen compatriots while selling off fish from the islands. Today, you can vent your anger by trying this game demo, working together to eradicate all Japanese devils landing on the island and turning them back towards their own lands. Defend the Diaoyu Islands!

Given the inflammatory nature of the app, Apple pulled the game from its store. The Diaoyu Islands are known as the Senkaku Islands in Japan.

Email | Print | Permalink | Comments | Share

According to the BBC's Mukul Devichand, China's policy battles owe much to Western ideas:

For mainland Chinese intellectuals, the journey to the West - and then back to Communist China - is now a well-trodden path.

In fact, the main schools of intellectual thought in China have one thing in common - their leading thinkers have often spent time in Western universities.

That means that for Westerners, who may struggle with China's very different language or food, Chinese policy debates are split along strikingly familiar lines.

Email | Print | Permalink | Comments | Share

In an interview with Josh Rogin, Google Chairman Eric Schmidt decried China's web censorship:

"I believe that ultimately censorship fails," said Schmidt, when asked about whether the Chinese government's censorship of the Internet can be sustained. "China's the only government that's engaged in active, dynamic censorship. They're not shy about it."

When the Chinese Internet censorship regime fails, the penetration of information throughout China will also cause political and social liberalization that will fundamentally change the nature of the Chinese government's relationship to its citizenry, Schmidt believes.

"I personally believe that you cannot build a modern knowledge society with that kind of behavior, that is my opinion," he said. "I think most people at Google would agree with that. The natural next question is when [will China change], and no one knows the answer to that question. [But] in a long enough time period, do I think that this kind of regime approach will end? I think absolutely."

Interestingly, in March Reuters reported that China's innovation sector was surging:

International filings for patent protection, a key indicator of technological innovation in major economies, hit an all-time record last year driven by growth in China and other middle- income countries, a United Nations agency said on Monday.

The World Intellectual Property Organization, which administers the global patent pact, reported that 2011 saw a 10 percent rise in applications to a total of 181,900...

WIPO figures showed the United States, Japan and Germany, the long-time leaders in total applications, accounted between them for 58 per cent of total filings, but China, with a rise of 33.4 per cent on the previous year, was pushing them hard.

Patents in and of themselves don't tell you all there is to know about the long-term dynamism of a country's tech sector. But in 2012, the lack of freedom doesn't appear to be slowing China's technological edge (although given the rampant intellectual property theft it's difficult to judge just how much indigenous innovation is actually occurring).

(AP Photo)

Email | Print | Permalink | Comments | Share

Every year, China removes silt from the Yellow River in an operation that moves an amazing amount of water through a specialized dam. The Daily Mail has more photos.

(AP Photo)

Email | Print | Permalink | Comments | Share

According to Sarah Rainsford, it's China:

Cuba has begun introducing measures intended to kick-start its inefficient, unproductive planned economy.

It is a tentative start: The word "reform" is never used, nor "private enterprise" - instead, Cuba says it is "updating" its economic model.

Like China and Vietnam before it, the island's aim is to protect and prolong its socialist political system by introducing elements of market economics.

So it seems Raul Castro is in Asia looking for inspiration.

(AP Photo)

Email | Print | Permalink | Comments | Share

Victor Davis Hanson offers some advice to Governor Romney when it comes to attacking President Obama's foreign policy. Daniel Larison picks apart some of the weaker points here, but I wanted to draw attention to this charge:

The addition of $5 trillion in national debt was disastrous in terms of U.S. foreign policy. It lost us what leverage we had over China. It destroyed any credibility in advising the European Union about its own financial meltdown.

When, I wonder, did the United States have leverage over China? Was it when the prior administration bestowed America with two enormous tax cuts, two large land wars, one huge (debt-funded) expansion of federal entitlements and a housing bubble? Indeed, if I were the Romney campaign (stocked, as it is, with members of the prior administration) I would be very leery about making this charge for several reasons. First, if the Obama administration's huge debt increase was a foreign policy "disaster" then Bush's debt increase was at least as bad

Here's a handy debt chart that allows you to rank changes in gross U.S. federal debt (starting at WWII). It shows that while the Obama administration is no piker when it comes to larding it on (ranking third), it's outdone by its predecessor (ranked second and seventh). The Obama administration has been no slouch in the debt department, exceeding the Bush administration's total spend, but they can't (yet) hold a candle to the rapid pace at which the debt soared when President Bush and the GOP controlled the nation's purse strings.

Either way, it's patently absurd to argue that with this record, the Romney camp would have any credibility when it comes to lecturing Europe about how to handle national finances.

Second, the Bush era is noted as one of relative calm in Sino-U.S. ties precisely because the administration was in no position to challenge Beijing because it was preoccupied with the high strategic task of policing Baghdad and begging an elderly Shiite cleric to say nice things about democracy. It was the Bush administration's spendthrift ways, disastrous handling of the Iraq war and the calamitous financial crisis which unfolded on its watch that led many Chinese analysts to believe the U.S. was in a period of decline. It's not clear if the current administration has actually increased U.S. leverage over China, but it's not like they squandered some terrific inheritance.

Email | Print | Permalink | Comments | Share

China has made a lot of space-related news of late. They put their first female astronaut into orbit and recently completed their first space-docking mission.

Morris Jones writes that while China still trails America in space, the world should not dismiss their achievements:

There is a condescending tone to much of the international reportage on China's recent space docking and expedition to its first space laboratory, Tiangong 1. Commentators applaud China's progress in space exploration but claim they are decades behind the US and Russia, who achieved similar feats in the 1970s.

These reports fail to account for the 'leapfrog' effect of technological advances, and the benefit of experience from other nations. Such effects are propelling much of Africa from being disconnected from telecommunications to enjoying broadband wireless services in just a few years. The effects are just as significant for China's space missions.

Morris concludes that the "US will probably only restore vitality to its space program when it realises that China has achieved near-parity with its own activities."

I think it's just as likely that China will advance a bit more before realizing, like the U.S., that a very expensive manned space program has little practical utility. The U.S. has not abandoned space exploration or the strategic exploitation of space for defense purposes. China will certainly continue to improve its space-related technologies, but I don't think the U.S. should fear a Sputnik 2.0. The Chinese economy won't grow at 8 percent forever.

(AP Photo)

Email | Print | Permalink | Comments | Share

In part two of my very infrequent series of posts on Aaron Friedburg's A Contest for Supremacy, Friedburg makes the following assertion regarding the sources of China's quest for regional hegemony:

To sum up: China’s current rulers do not seek preponderance solely because they are the leaders of a rising great power or simply because they are Chinese. Their desire for dominance and control is in large measure a by-product of the type of political system over which they preside. A liberal democratic China would certainly seek a leading role in its region, and perhaps an effective veto over developments that it saw as inimical to its interests. But it would also be less fearful of internal instability, less threatened by the presence of strong democratic neighbors, and less prone to seek validation at home through the domination and subordination of others.

The real question Friedburg is dancing around (and may address later in the book) is whether a democratic China would be a more pliant one with respect to U.S. hegemony in Asia. There is every reason to believe this will not be the case. The demands of national pride and strategic common sense would seem to dictate that a more powerful China will take a more forward-leaning role in policing the sea lanes it depends on for trade and natural resources.

Update: Larison adds another comparison:

The record of late 19th-century Britain or Meiji-era Japan ought to disabuse everyone of the notion that having a liberalizing and democratizing political system precludes the pursuit of an aggressive foreign policy. Rather than looking at America’s post-Cold War policies around the world, a more useful comparison might be with America’s early republican history as an expansionist power in North America. Early republican America was the most liberal and democratic country in the world by the start of the nineteenth century, but that hardly prevented it from using force or dominating other peoples. Increasingly democratic politics included expansionist goals that shaped U.S. relations with the rest of the continent. A democratizing China might or might not become more aggressive toward its neighbors than the current regime, but the assumption that a democratic China would be less aggressive in its dealings with other states in the region is a shaky one.

Just so. The makeup of China's government is not immaterial to these questions, but we shouldn't simply assume that a democratic China is going to relinquish longstanding territorial claims or strategic interests because it's a democracy.
(AP Photo)

Email | Print | Permalink | Comments | Share

Niall Ferguson, long a proponent of an imperial role for the U.S., makes this rather shocking (for him) suggestion:

In terms of geopolitics, China today is the world’s supreme free rider. China’s oil consumption has doubled in the past 10 years, while America’s has actually declined. As economist Zhang Jian pointed out in a paper for the Brookings Institution last year, China relies on foreign imports for more than 50 percent of the oil it consumes, and half of this imported oil is from the Middle East. (China’s own reserves account for just 1.2 percent of the global total.)

Moreover, China’s dependence on Middle Eastern oil is set to increase. The International Energy Authority estimates that by 2015 foreign imports will account for between 60 and 70 percent of its total consumption. Most of that imported energy comes through a handful of vital marine bottlenecks: principally, the straits of Hormuz and Malacca and the Suez Canal.

Yet China contributes almost nothing to stability in the oil-producing heartland of the Arabian deserts and barely anything to the free movement of goods through the world’s strategic sea lanes.

Imagine, for a moment, if the Chinese said they would be building naval bases in the Persian Gulf to help stabilize the region and protect their vital sea lanes. Would the U.S. reaction be to celebrate the burden-sharing and use the move as an opportunity to downsize its own commitments? Or would Washington have a collective freak-out about Chinese "assertiveness" and the dangers of being locked out of the Middle East forever?

I'm going with the second option.

Indeed, the reason the U.S. is "pivoting" to Asia is partly because China is beginning to shore up its own sea lane defenses in its immediate neighborhood. The U.S. response hasn't been to celebrate China's assumption of greater responsibility but to complain that China is "destabilizing" the region with its arms buildup and "assertive" foreign policy. If China can't take steps to protect what it views as vital interests in its own neighborhood without provoking howls of protest from the U.S., why do we think they'd be welcome in the Middle East?

If anything, the arguments for a redoubled U.S. commitment to the Middle East are going to grow in direct proportion to China's strategic rise. If China is dependent on Mideast oil and the U.S. is holding the most leverage in the Middle East, we are de-facto arbiters of China's energy security. That's not a position the U.S. is likely to relinquish if a Cold War-style standoff with China starts to take shape.

The flip side to this, and the argument I'm more sympathetic too, is that fobbing off the troublesome region on China (or anyone) would be a very good idea. It's just interesting that Ferguson, of all people, would be advancing it.

Email | Print | Permalink | Comments | Share

On Monday I linked to a Brendan Taylor analysis that argued that the South China Sea wasn't much of a flashpoint. Kirk Spitzer reports on an opposing view:

A shooting war with China may not be inevitable, but a dangerous arms escalation seems a dead certainty. That’s the take from a rare public discussion here this week among naval experts from Japan, the U.S. and China.

“Eighty percent of the population wants us to use the military,” says Yang Yi, former director of the Institute for Strategic Studies at the National Defense University in Beijing. “They’re asking, ‘Why are we so weak? Why are we wasting money on our Navy if we are not going to use it?’ Outsiders really do not appreciate what is going on inside China.”

It's ironic that one potential bulwark against Chinese escalation in the South China Sea is the fact that its government is not accountable to the will of its people. Of course, democracies are no stranger to ignoring their own citizen's desires, but Yang's account should give us pause the next time someone claims that the only way the U.S. can live peacefully with China is if it democratizes.

Email | Print | Permalink | Comments | Share

Brendan Taylor thinks that, contrary to the emerging conventional wisdom, the South China Sea isn't all that important:

I should start by saying that my scepticism regarding the strategic significance of the South China Sea is largely a reaction to the flurry of recent op-eds and essays identifying this area as a potential trigger for great power conflict. I doubt that such a trigger really exists, certainly not one with the potential to impact upon Asia's larger strategic order.

The reasons for my scepticism become clear when we compare the South China Sea with Asia's two most widely accepted flashpoints, Taiwan and the Korean Peninsula. Richard Bush and Michael O'Hanlon have argued that the problem of Taiwan could spark a nuclear war involving 1.5 billion people and produce a fundamental change in the international order. Similar estimates suggest that a Korean conflict would cost somewhere in the vicinity of US$ 1trillion and 500,000 lives during its first 90 days.

It's difficult to envisage a scenario where a skirmish in the South China Sea could erupt into a conflict of that magnitude. For this reason, I just don't think it's a real flashpoint.

Email | Print | Permalink | Comments | Share

Jacob Stokes comments on China's role in the U.S. presidential race:

Ultimately, the 2012 U.S. presidential election will have a long-term effect on Sino-American relations to the degree that it increases or decreases strategic mistrust between the two countries. The Chinese leadership understands that the rough and tumble of U.S. politics is often more smoke than fire—that most heated rhetoric gets moderated when it runs up against the demands of real-world policy making.

But a political discussion that frames the relationship between the two countries as an exclusively zero-sum competition, one that mirrors the ideological and strategic dimensions of the Cold War--instead of a process of managing differences and identifying common interests--risks creating an atmosphere of strategic distrust that will do long-lasting damage in relations with China. While it’s essential for the U.S. leaders to stand firmly in support of American interests and values, candidates should be wary of letting political point-scoring damage the world’s most important bilateral relationship.

I think the atmosphere of strategic mistrust predates the presidential campaign and that, as Stokes notes, the Chinese almost certainly discount everything they hear from the candidates until election season is over. That's probably a good strategy for the rest of us, too.

Email | Print | Permalink | Comments | Share

The pivot, we tell the Chinese, is not about them. But then Manila and Tokyo ask: "What do you mean the pivot isn't about China. The Chinese are unwelcome visitors into our waters at least once a week!"

Oh, and we have new battle plan called "Air Sea Battle" that again is not about China. However, it is meant to operate in "anti-access" environments -- those in which enemies have many missiles, submarines, and cyber warfare capabilities. Sounds like China. We will be able to operate again in those environments once the plan is executed, but we will not execute it because we are cutting the defense budget, so China should worry a bit but not too much. Our allies should have just a little dose of reassurance to go along with their fears. - Dan Blumenthal

I wonder if "uncertainty" is actually the problem. What Blumenthal highlights is not really "uncertainty" but the administration's mealy-mouthedness (my word) with respect to what's it's doing in Asia. As Blumenthall notes, it's putting in place a semi-militarized containment strategy with the pivot, but is also taking great pains not to call it that lest it damage relations with China, which are rather important.

So what's the problem with this? There is nothing "uncertain" about establishing military bases in Australia and holding naval exercises with countries at China's perimeter. Does Blumenthal think U.S. allies in Asia would be more reassured if the administration actually took a sharper tone with China or explicitly framed its "pivot" in terms of Chinese containment?

He also writes:

Here is another part of the uncertainty doctrine that must leave Europeans and Middle Easterners scratching their heads: The United States is pivoting to Asia (under fiscal constraint) but not abandoning its allies in Europe or the Middle East.

I agree this is silly. If we're prioritizing Asia then it means we must correspondingly de-emphasize other regions. So imagine if President Obama said: "the U.S. is under fiscal strain and has to prioritize resources accordingly. That means we must shift our attention from a Europe that is peaceful and secure to Asia, where our interests will require more attentive monitoring."

Would Blumenthal hail this as providing clarity or would he condemn Obama for betraying U.S. leadership? The president's current rhetoric is designed to shield him from just such an accusation because Washington is unable to have an adult conversation about this stuff.

Email | Print | Permalink | Comments | Share

The Obama administration decided last month to slap tariffs on Chinese-made solar panels because, they claim, Chinese subsidies undercut U.S. manufacturers. It's an odd industry for the administration to target - all those Chinese subsidies have made solar roughly price-competitive as an energy source for the first time, something the supposedly environmentally-minded administration would approve of. Now the administration wants to make it more expensive.

Yet as DigiTimes notes, Chinese suppliers may be able to skirt the costs:

China-based solar firms, however, have been finding ways to avoid paying the tariff such as transfering solar cell orders to Taiwan. Taiwan-based solar cell makers have been experiencing rising capacity utilization rates but indicated that orders from China-based firms often have unprofitably low quotes. China does not want to give up on the US market because it is one of the fastest growing solar markets in the world.

Beyond that, it's very odd that the Obama administration would go to such great lengths over Iran, including, potentially, using military force but won't countenance cheap solar panels from China. One policy potentially threatens the lives of American service personnel and runs the risk of a near-term recession if a brief war in the Gulf causes oil prices to soar (among a host of other potentially negative outcomes). Letting cheap Chinese solar panels into the U.S. market, however, hurts the employment prospects of a small industry (unless these panels are somehow dangerous - a case I've not yet heard).

Obviously these two events are not tightly correlated, but they are related. Solar power isn't going to ween the U.S. off of oil as a transport fuel in the short-term (as I understand it, the solar roof experiment on the Prius was a bit of a flop), but the more alternative energy sources go online, the more the overall energy mix will tilt away from oil and the greater the chance that Washington can finally stop obsessing about the Mideast.

Email | Print | Permalink | Comments | Share

Chinese media has reportedly mocked India's recently-tested Angi V long-range missile as a "dwarf." The Hindustan Times takes on the story with its own provocative headline. I guess it's still better to jaw, jaw...

Email | Print | Permalink | Comments | Share

Freedom House's Arch Puddington thinks the world is giving China a free pass when it comes to human rights abuses:

More than anything else, it is this calibrated economic integration, and the opportunities it represents, that has allowed China’s government to evade international opprobrium for its acts of repression. To be sure, the regime’s crimes are not entirely ignored. Human rights organizations regularly denounce the jailing of dissidents, the mistreatment of minorities, and the lack of anything resembling the rule of law. Occasionally, foreign governments are compelled to speak out, as when Beijing launched a campaign against the Nobel committee after jailed democracy advocate Liu Xiaobo was given the peace prize. But in an age when Hungary, Ukraine, and Turkey are rightly chastised for breaches of democratic standards, China usually gets a pass for policies that have brought pain and misery to millions. The separate category that China has carved out for itself goes beyond the usual double standard that has historically been applied to “progressive” dictatorships—to Cuba, or Nicaragua under the Sandinistas, for example. Instead there is a kind of stand-alone China Exception, under which repression and autocracy are quietly acknowledged but actual objections are seldom voiced.

Puddington will have none of it:

The one-child policy and the persecution of the Uighurs are but two in a long roster of odious practices that, taken together with the world’s indifference, make up the China Exception. This indifference is a choice, often by people who hope for economic gain, or fear economic losses.

The fear of economic loss might strike Puddington as no reason to tread cautiously with respect to China's internal governance, but it's a perfectly legitimate concern. Any government has a primary obligation to the welfare of their own citizens. Putting that welfare at risk to deliver moral lectures to China about how China behaves internally would be an abdication of that responsibility.

And it's unlikely to even work. When some (democratic, human rights-abiding) European capitals objected to the U.S. push for a war with Iraq, the American response wasn't measured self-reflection and changed behavior but adolescent petulance and "Freedom Fries." Is China really going to behave differently?

Email | Print | Permalink | Comments | Share

I think I'll be amending my philosophy of trying any food once.

Email | Print | Permalink | Comments | Share

We know Mitt Romney thinks it's Russia and now the White House is on record giving al-Qaeda the dubious honor, but neither of these answers seems all that satisfying. Romney's answer, redolent of the Cold War, at least has the benefit of anointing a bona-fide geopolitical heavyweight. The White House's response has the benefit of identifying a group that is actually implacably hostile to the U.S., even if its power is negligible.

So who should get the top spot? China, like Russia, has geopolitical clout but isn't hostile to the U.S. across the board in the manner of an al-Qaeda. Beyond China, countries like Iran or North Korea (or even Pakistan) could earn a nod for their hostility to U.S. regional aims, but again, not for their power or geopolitical weight.

Even conducting this thought experiment usefully illustrates the fact that the U.S. is actually in a pretty nice geopolitical position in 2012: it has very few implacable enemies and none that are very powerful. There are very powerful states that, on certain issues, play a spoiler role, but the era of straight-up great power antagonism is gone. As James Joyner pointed out, the entire notion of the U.S. having a "number one geopolitical foe" is an "outmoded concept."

At least for now.

Email | Print | Permalink | Comments | Share

Ironically, China's best efforts to increase its security by developing powerful military capabilities and asserting its interests more vigorously may only render its leaders more insecure. Other Asian countries are moving closer to the United States, and each other, to balance growing Chinese power. President Barack Obama is reorienting the United States' military posture away from Europe and the Middle East in ways that reinforce, rather than diminish, the U.S. leadership role in Asia. - Daniel Twining

It's an interesting observation because it's also one that, if reversed, would be rejected by a broad swath of the U.S. defense and foreign policy establishment (to say nothing of the political establishment). The idea that building up one's military strength and forcefully interjecting oneself in the affairs of others is destabilizing and ultimately results in greater insecurity is a concept that really doesn't have a lot of traction in American policy-making circles. Instead, there is the belief (not unfounded) that American security lies in an overwhelming preponderance of power and a coalition of allies to maintain favorable regional balances around the world.

We shouldn't be all that surprised to see China mimic this strategy as its own power grows.

A more interesting question to ponder is whether Twining is right about the sources of Chinese insecurity and, if he is, what lessons that poses for U.S. strategy.

Email | Print | Permalink | Comments | Share

There are bull markets. There are bear markets. But in China, there's also a bear bile market. Yum.

Email | Print | Permalink | Comments | Share

President Obama's Google Plus account is making news:

Chinese Internet users taking advantage of temporary access to Google's social networking site, Google+, have flooded U.S. President Barack Obama's page on the site with calls for greater freedom in the world's most populous country.

"Oppose censorship, oppose the Great Firewall of China!" one user posted, one of hundreds of comments in Chinese or by people with Chinese names that dominated the site over the weekend.

Beijing's blocking of websites and censoring of search results for politically sensitive terms is known colloquially as the "Great Firewall of China." With sites such as Facebook and Twitter blocked, self-censoring homegrown equivalents like Sina Corp's microblogging platform, Weibo, fill the void.

It was unclear why Google+ was accessible for some users in China for part of the past week. A Google spokesman said the company had not done anything differently that would have led to the access. One Google executive told Reuters that the company had noticed the opening early last week.

Email | Print | Permalink | Comments | Share

Adam Segal argues that the popular perception of China as a cyber superpower is overwraught:

Two recent studies of national cyber power have placed China near the bottom of the table. China is number 13 on the EUI-Booz Allen Hamilton Cyber Power Index, behind Argentina, Mexico, and Brazil but better off than Russia, Turkey, South Africa, and India (the United Kingdom, United States, and Australia are the top three). The Brussels-based Security & Defence Agenda groups China with Italy, Russia, and Poland in the fifth tier (the U.S. and the UK are in the third tier, below Finland, Sweden, and Israel; the top group is empty).

These are very subjective studies based on interviews, surveys, and vague metrics. Still, they cut against the grain of popular perceptions. If you were just paying attention to the almost weekly reporting in the Western press about alleged Chinese cyber espionage, you could be forgiven for thinking that China ruled the cyber waves. Yet recent writings in the Chinese press have more of a “China is vulnerable” flavor and suggest that analysts, if not characterizing the country’s cyber strategy as weak, think there is a great deal of work that remains to be done.

Email | Print | Permalink | Comments | Share

A nation that represses its own people cannot ultimately be a trusted partner in an international system based on economic and political freedom. While it is obvious that any lasting democratic reform in China cannot be imposed from the outside, it is equally obvious that the Chinese people currently do not yet enjoy the requisite civil and political rights to turn internal dissent into effective reform.

I will never flinch from ensuring that our country is secure. And security in the Pacific means a world in which our economic and military power is second to none. It also means a world in which American values—the values of liberty and opportunity—continue to prevail over those of oppression and authoritarianism. - Mitt Romney

So American values can't be imposed on China, but we mustn't let that realization get in the way of brow beating them about all their internal failings anyway and surrounding them with U.S. military power.

And then President Romney will ask the Chinese - pretty please - to borrow their money.

Email | Print | Permalink | Comments | Share

Stan Grant says the era of "cheap China" is over:

The Chinese factory floor ain't what it used to be. Heavy industry machines now sit idle, where once hundreds of workers would have crammed into Dickensian sweat shops, slaving away for little pay.

China's army of migrant workers are smarter than ever, demanding higher pay and better conditions, armed with tough government labor laws.

Email | Print | Permalink | Comments | Share

Stephen Roach thinks so:

Yet fears of hard landings for both economies are overblown, especially regarding China. Yes, China is paying a price for aggressive economic stimulus undertaken in the depths of the subprime crisis. The banking system funded the bulk of the additional spending, and thus is exposed to any deterioration in credit quality that may have arisen from such efforts. There are also concerns about frothy property markets and mounting inflation.

While none of these problems should be minimized, they are unlikely to trigger a hard landing. Long fixated on stability, Chinese policymakers have been quick to take preemptive action....

India is more problematic. As the only economy in Asia with a current-account deficit, its external funding problems can hardly be taken lightly. Like China, India’s economic-growth momentum is ebbing. But unlike China, the downshift is more pronounced – GDP growth fell through the 7% threshold in the third calendar-year quarter of 2011, and annual industrial output actually fell by 5.1% in October.

But the real problem is that, in contrast to China, Indian authorities have far less policy leeway. For starters, the rupee is in near free-fall. That means that the Reserve Bank of India – which has hiked its benchmark policy rate 13 times since the start of 2010 to deal with a still-serious inflation problem – can ill afford to ease monetary policy. Moreover, an outsize consolidated government budget deficit of around 9% of GDP limits India’s fiscal-policy discretion.

Email | Print | Permalink | Comments | Share

I've gotten underway on Aaron Friedberg's new book: A Contest for Supremacy: China, America and the Struggle for Mastery in Asia. One thesis of the book that has surfaced in reviews is that a democratic China would cede the contest for supremacy to the United States. A democratic China, he argues:

would certainly seek a leading role in its region…. But it would be less fearful of internal instability, less threatened by the presence of strong democratic neighbors, and less prone to seek validation at home through the domination and subordination of others.

I personally doubt this, but will keep an open mind until I finish the book. What's interesting is that Friedberg notes approvingly at the outset of Contest that U.S. strategy has long sought to deny the emergence of a dominant power in Eurasia - which makes the U.S., if not a "dominant" power there than at least a decisive one in Eurasia. In other words, the U.S. - a democracy - can have a strategy of exercising robust military power far from its shores to protect its interests. It's not clear to me why a democratic China would forego the same opportunity.

Email | Print | Permalink | Comments | Share

Ma Guangyuan argues that it's not the "China model" that many in the West ascribe to:

Those viewing China’s model often point to the powerful Chinese government and its centralized authority as the key in propelling the development of the Chinese economy. They argue that centralization of forces makes it possible to launch major undertakings and minimize internal frictions.

However, this conclusion does not hold water when examined from a historical point of view. When the, Chinese government controlled everything at the start of the reform and opening-up drive in China, China did not prosper. On the contrary, China’s national economy fell to the brink of collapse during this period due to extreme political and economic leftism. It is obvious, therefore, that policy stability and the exercise of government power are not the key to economic transformation. In fact, the biggest hurdle blocking China’s course of development has been its stagnation in political reform and the transformation of government, as well as the government’s control over resources. Because its political reform has lagged, the Chinese government has become too involved in economic affairs and its officials have received unfettered powers over the distribution of land, capital and other economic resources. By getting directly involved in project examination and approval, licensing standards for market access, price control, and the execution of other types of administrative measures, the government not only frequently interferes with micro economic operations, but also commits many types of malpractices such as rent seeking to throttle market economic vitality.

Email | Print | Permalink | Comments | Share

NightWatch sees China's partnership with the UAE as filling a void left by the U.S. :

China has maintained a strategic relationship with Saudi Arabia since before the first Gulf War. The closer relationship with the UAE signifies that China intends to be consequential in both Sunni Arab states as well as Shiite Iran.

A recent analysis concluded that Arab states friendly to the US now perceive that the will to use US influence in the Middle East is waning and thus have begun looking for other partners to help ensure their long term security. China is the obvious candidate and is showing that it is prepared to fill any power vacuum the US choses to leave.

Omri Ceren sees this as some kind of problem, but I'd argue it's a positive development. China is more dependent on Gulf oil than the U.S. (the short-sighted killing of the Keystone pipeline notwithstanding) and should therefore take on a larger share of the Gulf's security headaches.

Email | Print | Permalink | Comments | Share

According to John Bennett, the Obama administration is flooding Asia with advanced fighter aircraft:

The culmination of this work will leave Washington with nearly 150 F-35s in the Asia-Pacific region and more than 100 F-16s.

That means about 250 of the world's most advanced warplanes are on their way to the region, even as China is building its own sophisticated jets and anti-aircraft systems.

The U.S. Air Force also has its super-stealthy F-22 fighter stationed in the region, bringing even more firepower as a check on possible Chinese aggression.

What’s more, Japan’s decision to buy 42 F-35s ... "increased the likelihood that South Korea will follow suit, enabling the U.S. to maintain a coalition of friendly forces in the region that operate compatible combat systems,” defense insider Loren Thompson of the Lexington Institute wrote in a column on Forbes.com Tuesday.

It's better for the U.S. to sell allies the tech required for self-defense than promise to do it for them, so all-in-all this is a positive development. It also proves, once again, that there is little chance that China's rise is going to create a cascade of states falling into its orbit. Most countries in the region are reacting in just the opposite fashion, which means the U.S. has more leeway to remain the "balancer of last resort."

Email | Print | Permalink | Comments | Share

Martin Green documents it:

On October 18, the U.S. government was asked to impose tariffs on imports of Chinese solar cells and modules, based on the argument that China-based producers have been heavily subsidized and are selling solar products at unfairly low prices. Perhaps not surprisingly, some Chinese companies have now asked the Chinese government to impose tariffs on imports of American solar products, arguing that U.S.-based producers have been heavily subsidized, too. And just like that, the production of affordable and competitive solar products has become a political liability in the world's two largest producers and consumers of energy.

(AP Photo)

Email | Print | Permalink | Comments | Share

President Obama has called himself America's "first Pacific president." Tom Lasseter created the map above to highlight visits from key Obama administration officials:

It strikes me that the map's message is in the eye of the beholder. If you throw in Obama's trip to China in 2009, it suggests the blanket approach that the Americans have claimed. And there are, of course, many non-China reasons for trips to places like Pakistan and Russia.

But if you don't trust the United States and see its increased engagement in Asia as a way of hemming in China's rise, well, it might suggest that too.

Email | Print | Permalink | Comments | Share

A recent study from Georgetown suggested that China had 3,000 nuclear weapons. Hans Kristensen isn't so sure:

Although we don’t know exactly how many nuclear weapons China has, we are pretty sure that it doesn’t have 3,000. In fact, the Georgetown University estimate appears to be off by an order of magnitude.

In fact, he thinks the number is actually ... 100.

Email | Print | Permalink | Comments | Share

The foreign policy debate in the GOP primary has been something of a non-event, but Galrahn raises some important issues:

The Republican candidates, one of which is likely to replace Barack Obama unless the President can learn economics in the next 12 months, are almost certain to adopt the Obama doctrine for Asia that centers on US primacy. All evidence suggests that US political leaders cannot take any political stand except one that focuses on US primacy in Asia now and forever. This is a fools gold, but no one ever said politics wasn't foolish.

So we are left to search for other leaders, whether civilian or military, who are ready to promote visions of Americas future foreign policy in Asia and around the world that is congruent with the very real possibility that China may indeed have the largest economy in the world by 2025 - just 15 years from now. If China becomes the worlds largest economy, would that disrupt American primacy in Asia? President Obama's policy record isn't very good, indeed he isn't running a reelection campaign based on his record in case you haven't noticed, so there is certainly no evidence this new Obama Doctrine for Asia will be successful. There is also little evidence that anyone is thinking about a Plan B.

As China builds up military resources and capabilities commensurable with their economic growth, how should the US respond? Whose strategic vision of the future includes US prosperity and security regardless of whether China is the largest economy in the world or not?

Email | Print | Permalink | Comments | Share

Writing in the Wall Street Journal (of all places) Andy Stern argues that China's model of single party authoritarianism and state-directed capitalism is superior to America's economic model. I think Stern is wrong - but his piece does raise two very important questions: 1. At what point does Stern's diagnosis become correct? 2. Would the United States possess the capacity to recognize that its system was failing and change course?

Usually when talk turns to China's performance and fears about America's future, we're reassured by knowledgeable experts that Churchill's maxim applies: "democracy is the worst form of government except for the all the others." We're also reminded of China's very deep social and economic problems - problems which even three decades of torrid economic growth have not fully solved (and in some cases may be exacerbating). I also find this analysis very persuasive - I'd be more willing to bet that the U.S. looks a lot stronger in 10 or 20 years than China does. I don't believe history vindicates the kind of strong central planning role that Stern lauds in his piece (to say nothing about the many abuses that abound in China's single-party system).

But what if China makes it work? What if over the next 20 years, China continues to experience strong economic performance with ever larger numbers of people rising from unemployment or subsistence wages and the U.S. creaks along with stagnant growth, very high unemployment and very high levels of income inequality? What if China makes the leap from a manufacturing-based economy to an innovations-based economy? What would defenders of the American status quo say then? At what point does China's economic performance, and America's lack thereof, speak to something more systemic? Something ideological?

The second question is even more intriquing - would the United States and its political leaders even be willing to acknowledge it had fallen behind and look abroad for solutions? We know that several Asian countries were able to do this kind of rigorous self-assessment and adopt growth-boosting reforms. At the end of the 19th century and the beginning of the 20th, Japan realized their society was lagging behind the West and embarked on a crash modernization that saw Japanese power grow enormously before World War II. China has done much the same thing in the economic arena. Could America?

(AP Photo)

Email | Print | Permalink | Comments | Share

China's not interested:

Much like the U.S., China is aiming to address a problematic demographic that has recently emerged: a generation of jobless graduates. China’s solution to that problem, however, has some in the country scratching their heads.

China’s Ministry of Education announced this week plans to phase out majors producing unemployable graduates, according to state-run media Xinhua. The government will soon start evaluating college majors by their employment rates, downsizing or cutting those studies in which the employment rate for graduates falls below 60% for two consecutive years.

The move is meant to solve a problem that has surfaced as the number of China’s university educated have jumped to 8,930 people per every 100,000 in the year 2010, up nearly 150% from 2000, according to China’s 2010 Census. The surge of collge grads, while an accomplishment for the country, has contributed to an overflow of workers whose skill-sets don’t match with the needs of the export-led, manufacturing-based economy.

Email | Print | Permalink | Comments | Share

According to Jon Russell, a video campaign from the authorities coupled with stricter policing have cut drunk driving accidents in China by a third. Above, an image from the campaign that reads: "Driving after drinking is deadly."

Email | Print | Permalink | Comments | Share

I bet Bernie Madoff's happy he doesn't live in China:

Chinese official dubbed the "land granny" was executed after amassing 145 million yuan ($23 million) in bribes and illicit wealth, media reported on Thursday, offering a glimpse into the country's underground economy in land deals.

Luo Yaping was head of a land sub-bureau in a district of Fushun, a city in northeast China -- not an especially high position -- and yet she was able to use her power over land development and compensation to accumulate a fortune in bribes and embezzled compensation, the China News Service reported.

Luo, 50, was executed on Wednesday, the report said.

Email | Print | Permalink | Comments | Share

Robert Bigelow thinks they will by 2025:

At the International Symposium for Personal and Commercial Spaceflight, Bigelow laid out a timeline of a wild-west-style Chinese takeover of the moon, calling China "the new gunslinger in Dodge." Bigelow's timeline notes China's increasing success in space projects, up to and including last month's launch of the Tiangong Space Station module. He further declares that the moon's abundance in helium-3, a possible future fuel, but more importantly that "claiming" the moon would be a major glory moment for China. The timeline suggests that China will complete surveys of the moon, withdraw from the Outer Space Treaty of 1967 and formally claim the moon as part of China. Bigelow even suggested diverting 10 percent of the defense budget--some $60 billion--to preventing this moon theft.

Email | Print | Permalink | Comments | Share

The National Journal took the measure of U.S. sentiment of both the recently concluded free trade pacts with South Korea, Colombia and Panama, as well as Senate action on China's currency manipulation:

When asked if they supported or opposed the congressionally approved agreements with South Korea, Colombia, and Panama, voters were just about evenly divided, with 38 percent supporting the accords and 41 percent opposing them. A full 21 percent of voters didn’t know enough to answer or refused to say.

While the overall number of voters was divided fairly evenly, the differences among subgroups were stark. Men favored the agreements 46 percent to 38 percent; women opposed them 44 percent to 30 percent. Although Republicans are sometimes thought of as being more pro-trade, 41 percent of GOP rank-and-file voters polled opposed the agreements. The number was slightly higher for Democrats: 45 percent of them opposed the treaties. When it comes to education, 44 percent of college graduates supported the agreements and 31 percent opposed them. Among those with some college or less education, 45 percent opposed the trade pacts and 35 percent supported them—perhaps reflecting views on the loss of manufacturing jobs to foreign competition.

Voters were similarly divided about a proposed measure that would slap tariffs on Chinese goods if Beijing is found to be manipulating its currency. Overall, voters were evenly divided on the measure, with 44 percent supporting it and 41 percent opposing it. College graduates supported the sanctions measure, 57 percent to 30 percent. When party affiliation was factored in among college grads, Republicans were the most supportive of the measure: 62 percent of them backed the bill and only 24 percent opposed it despite the widespread opposition to higher taxes in the Republican Party. Among Democrats and independents, the support for the measure was a bit lower. There was less enthusiasm for the punitive sanctions among voters who were not college-educated, although Republicans once again led the way; 44 percent of GOP voters with no college degree backed the bill, compared with 37 percent for Democrats and 40 percent for independents.

Interesting partisan split on the China question.

Email | Print | Permalink | Comments | Share

Speaking of busting China myths, Arthur Kroeber does a nice job with one persistent meme:

China is not in any practical sense “America’s banker.” China holds just 8% of outstanding US Treasury debt; American individuals and institutions hold 69%. China holds just 1% of all US financial assets (including corporate bonds and equities); US investors hold 87%. Chinese commercial banks lend almost nothing to American firms and consumers – the large majority of that finance comes from American banks. America’s banker is America, not China.

It is more apt to think of China as a depositor at the “Bank of the United States:” its treasury bond holdings are super-safe, liquid holdings that can be easily redeemed at short notice, just like bank deposits. Far from holding the United States hostage, China is a hostage of the United States, since it has little ability to move those deposits elsewhere (no other bank in the world is big enough).

Email | Print | Permalink | Comments | Share

In recounting the ten myths of America's China policy, Dan Blumenthal cites as a myth the fact that the U.S. is engaging with China:

This is a surprising policy unicorn. After all, we do have an engagement policy with China. But we are only engaging a small slice of China: the Chinese Communist Party (CCP). The party may be large--the largest in the world (it could have some 70 million members). We do need to engage party leaders on matters of high politics and high finance, but China has at least one billion other people. Many are decidedly not part of the CCP. They are lawyers, activists, religious leaders, artists, intellectuals, and entrepreneurs. Most would rather the CCP go quietly into the night. We do not engage them. Our presidents tend to avoid making their Chinese counterparts uncomfortable by insisting on speaking to a real cross section of Chinese society. Engagement seen through the prism of government-to-government relations keeps us from engaging with the broader Chinese public. Chinese officials come to the United States and meet with whomever they want (usually in carefully controlled settings, and often with groups who are critical of the U.S. government and very friendly to the Chinese government). U.S. leaders are far more cautious in choosing with whom to meet in China. We do not demand reciprocity in meeting with real civil society--underground church leaders, political reformers and so on. China has a successful engagement policy. We do not.

What an odd thing to say. As I understand Blumenthal, the point of engaging Chinese lawyers, activists, religious leaders, etc., inside China is to put pressure on the Communist Party and get them to change their policies. As Blumenthal notes, when Chinese officials come to the states, they meet with people "who are critical of U.S. policy" toward China, but has that changed anything about how the U.S. governs itself or behaves toward China? Blumenthal cites no evidence to suggest it has, so this can hardly be called a "successful" engagement on China's part, can it?

Email | Print | Permalink | Comments | Share

Instead of more tough talk and increased defense spending, the United States and its allies in Asia need to grasp the malleable nature of China’s strategic intentions and shape a “mixed” regional approach focused more on creating incentives to cooperate than on neutralizing every possible Chinese military capability of concern to U.S. defense analysts. In particular, there is a need for a more far-reaching U.S.-China strategic dialogue that focuses on long-term interests and intentions and on what steps each country could take to avert growing security competition.

This is not pie-in-the-sky utopian thinking. It is rooted in the realities of America’s changing economic position in the world, China’s own internal problems and debates, and Asia’s increasing openness to cooperative multilateral security approaches. - Michael Swaine

This sounds reasonable and it would certainly be helpful if U.S. defense planners put themselves in the shoes of their Chinese counterparts when thinking about the U.S. posture in Asia. To wit: the very act of bulking up U.S. power in the region is almost certainly going to cause China to accelerate their own defense build-up - which is the thing we find so objectionable in the first place. But that said, I think at this point China's defense build up is baked in - they're a growing economy and even if they enter into a recession, it's not unreasonable to expect that they'll rebound and resume building up their military power. I think Swaine is right to caution that China's strategic intent is still unclear, but as the U.S. demonstrates, the stronger you get, the more prone you are to define your interests in an expansive manner.

On a more mundane point, the U.S. doesn't need to raise its defense spending to compete with China. The U.S. is already well ahead of China in terms of defense spending and even in more austere times can remain a superior military force vis-a-vis the Chinese for decades to come, provided it prioritizes that outcome and jettisons the idea that the entire world is an arena of "vital" U.S. interest.

Email | Print | Permalink | Comments | Share

Another oops:

A Chinese TV news report unwittingly revealed how the communist regime’s Propaganda Department trains its army of paid Internet commentators, notoriously known as “50-cent-party,” to shape public opinion on the Internet.

On Sept. 8, Xishui TV, a local station in Hubei Province, reported a training conducted by the Xishui County Propaganda Department for spokespersons from various work units and all Internet commentators in the county. The purpose of the training, according to the report, was to continuously improve the skills of spokespersons and Internet commentators and to enable them to respond to a public crisis as well as guide public opinion in a “constructive way.”

Email | Print | Permalink | Comments | Share

John Copper makes a good, though somewhat narrow, case for Taiwan's strategic importance to the U.S., but hangs it around a rather odd analogy:

In December 1890, the United States Army won a battle against American Indians at Wounded Knee in South Dakota. This battle marked the end of the Indian Wars and meant that the United States could focus on external matters since it had finally consolidated its territory in the west.

Within ten years of Wounded Knee, the United States was on the way to becoming a world power. In 1898, the U.S. Navy won the Spanish American War. It acquired the Philippines and Guam as a result. The same year, the U.S. incorporated Hawaii and signed a tripartite agreement on Samoa....

China’s reunification of Taiwan will be its Wounded Knee. It will no longer need to focus on territorial matters and will doubtless look to realize power ambitions further from its shores.

So we must defend Taiwan lest China ... act like the United States.

In any event, I'm not sure this analogy is all that accurate since China is surrounded by much stronger powers (Russia, India, Japan, South Korea) than the United States was when it "broke out."

Email | Print | Permalink | Comments | Share

Ronald Bailey pours some cold water over fears that China is poised to eclipse America:

China’s total GDP is around $6 trillion today. Assuming 10 percent GDP growth for the next 20 years, China’s GDP would rise to $40 trillion. If the U.S. economy grew at say, 3 percent per year, total GDP would be $27 trillion. Back in 2007, before the financial crisis, the investment bank Goldman Sachs issued a report [PDF] that projected that Chinese GDP would be $26 trillion in 2030 compared to $23 trillion for the U.S. It bears noting that current Chinese purchasing power parity per capita is about $6,000 compared to $46,000 for Americans.

But it is unlikely that China’s economy can sustain 10 percent economic growth for two more decades. Economic history suggests that once countries catch up with leading economies in terms of technologies and business management, growth slows down. In which case, China’s growth might slow down to a mere 5 percent. Assuming sustained respective 5 percent and 3 percent growth rates for China and the U.S. for two decades, China’s total GDP would reach $16 trillion, not $34 trillion. In 30 years, it would grow to $26 trillion, by which time U.S. GDP would be $36 trillion. In 40 years, China’s GDP would $42 trillion and U.S. GDP would be $49 trillion. In 50 years, China’s GDP would finally surpass that of the U.S. reaching $69 trillion compared to $66 trillion.

Email | Print | Permalink | Comments | Share

Russia grants Venezuela $4 billion for military spending while China is lending Venezuela an additional $4 billion:

Venezuela is finalizing agreements for two separate credit lines of $4 billion each with Russia and China, with a portion of the financing earmarked for military equipment for the South American nation, according to Venezuelan state media.

With the world's largest oil reserves, Venezuela needs a well equipped military to defend itself from foreign aggression, President Hugo Chavez said during a broadcast phone call reported by the Venezuelan News Agency.

Chavez had to call in the news from Havana, where he is undergoing chemotherapy.

Readers of this blog may recall that Russia has financed over $6 billion worth of military equipment from 2005-2010.

On the other hand, Venezuela is borrowing at least $24 billion from China:

last year, Venezuela received a $20 billion credit line from the China Development Bank for housing

The housing construction has not started, but Hugo's betting on oil futures, so to speak, in a very big way.

Email | Print | Permalink | Comments | Share

As China's first aircraft carrier sets sail, Paul Dibb examines Chinese military power and finds it wanting:

China has 68 tactical submarines (28 of which are obsolete) whereas the USSR had 280 at the height of its military power. China has 78 principal surface combatants in its navy compared with 264 for the former Soviet Union. The Pentagon classifies only 25 per cent of China’s naval surface combatants (and fighter aircraft) as modern.

Many of China’s most advanced weapons are still based heavily on foreign designs (mostly Russian) copied through reverse engineering. This highlights a persistent weakness in China’s capability for innovation and a reliance on foreign suppliers for some propulsion units, fire control systems, cruise missiles, torpedoes, sensors and advanced electronics.

By all means we need to keep a close eye on the development of China’s military forces. China is undoubtedly an ambitious power seeking to claim its historical place in the sun. But let’s not succumb to the fatal assumption that China’s rise will be a simple straight-line extrapolation.

Dibb's description of Chinese conventional military weaknesses is more telling, but China doesn't have to be America's global equal or even to match the US in the Pacific. To change the regional strategic status quo, all it needs is the ability to challenge US control of the sea, and it is well on the way to doing that.

(AP Photo)

Email | Print | Permalink | Comments | Share

Stephen Walt wonders when it was the U.S. empire started to decline. His answer: the first Gulf War. Here's the rationale:

Unfortunately, the smashing victory in the first Gulf War also set in train an unfortunate series of subsequent events. For starters, Saddam Hussein was now firmly identified as the World's Worst Human Being, even though the United States had been happy to back him during the Iran-Iraq War in the 1980s. More importantly, the war left the United States committed to enforcing "no-fly zones" in northern and southern Iraq.

But even worse, the Clinton administration entered office in 1993 and proceeded to adopt a strategy of "dual containment." Until that moment, the United States had acted as an "offshore balancer" in the Persian Gulf, and we had carefully refrained from deploying large air or ground force units there on a permanent basis.

I think if we're going to pin the blame for a deepening U.S. role in the Middle East on anything it wouldn't be the Gulf War but the Carter Doctrine - that was what put the U.S. on the path toward an interventionist posture in the region. The Gulf War and the dual containment that followed were in many ways the logical heir to that doctrine.

But I'm not convinced that the Gulf War is really responsible, per se, for U.S. decline, mostly because "decline" is more of a relative phenomena (although we certainly haven't helped ourselves of late). That being the case, I'd argue that Deng Xiaoping's market-oriented reforms in China, which kicked off three decades of economic growth, have probably played a much more significant role in the narrowing of the power gap than America's post-Gulf War blunders.

(AP Photo)

Email | Print | Permalink | Comments | Share

Michael Auslin takes the measure of an increasingly contentious Asia:

Due to its military alliances, the United States will be further drawn into the conflicting webs of distrust and engagement that characterize Asian relations. Asserting its intent to forge closer ties with countries that seek to uphold regional stability and promote the adoption of effective norms of behavior is perhaps America’s best hope of retaining influence and relevance in a rapidly evolving region.

The question is - what happens if smaller Asian states use the presumption of U.S. defense to push maximalist claims against China? That would be just as destabilizing.

Indeed, in recent months we've seen quite clearly that Chinese "assertiveness" hasn't led to the "Finlandization" of her neighbors. Just the opposite: it has sparked outcries, protests and even military moves from the Philippines and Vietnam. For the U.S., this is an ideal recipe for off-shore balancing.

(AP Photo)

Email | Print | Permalink | Comments | Share

The Economist reports on a rather surprising event in China: the public criticism of the long-running family planning policy of the state by an official in the nation's most populous province. According to their report, Zhang Feng, director of Guangdong’s Population and Family Planning Commission, has proposed a rather modest reform of the current system, which would allow families where one parent is an only child to have more than one child. He may be sensing the political benefit of speaking out against a policy which is decidedly unpopular, but the incident of such a public challenge is still notable:

Whatever lies behind it, Mr Zhang’s demand is significant both because it is an implied public criticism of the one-child policy and because Guangdong was always likely to be in the forefront of any campaign for change. The province suffers many of the worst problems attributable to China’s population control, notably a grossly skewed gender imbalance among newborns. The combination of a strong cultural preference for boys and prenatal ultrasound imaging has led to couples identifying and aborting female fetuses so that their sole permitted child is male. This is a nationwide problem, but Guangdong has consistently had some of the worst sex ratios. Normally, 105 boys are born for every 100 girls. In 2010, Guangdong had 119 male babies for every 100 girls. Ten years earlier, the ratio was a shocking 130.

The province also has big worries about the balance between its working-age population and their dependants in the decades to come. Guangdong’s boom has sucked in huge numbers of young migrants from elsewhere (children and elderly migrants are deterred from moving by the household-registration system, or hukou). But as economic growth spreads to new areas, potential migrants may opt to stay at home, leaving Guangdong’s labour-intensive export industries vulnerable to labour shortages. This is a microcosm of China’s broader worries about ageing and the coming rise in the number of dependants for each working-age adult.

Zheng Zizhen, a demographer at the Guangdong Academy of Social Sciences (GASS), says even a modest change would help. “Every couple, in Guangdong and all over China, should be able to have two children. But before we take a second step or a third step in that direction, we need to at least take a first step like this one.”

Jonathan Last has written extensively about this problem, and I interviewed him about the challenges facing societies at similar points a few months ago. He noted the example of Singapore as one that illustrates the difficulty of shifting from population restriction to population encouragement:

Singapore began modernizing late, in the mid '60s. And they embarked on a China style one child policy, because China had a policy to stop people from having kids because they thought fertility was what was keeping them poor and they wanted to get industrialized and rich really quickly. So, they did a really eugenic program - forced sterilizations, increased taxes on people who had more than one kid - that sort of thing. And their program was fantastically effectively.

Within seven years their fertility rate was down by 60% and they realized dear God, we’ve made a huge mistake. They saw their fertility rates collapsing so quickly that they threw all the machinery into reverse and for now coming on 20 years they have been trying desperately to get people to have more kids. They hand out a full year of paid maternity leave. They give you a $10,000 bonus just for having the baby, each time you have the baby. They have what is essentially a 401k plan for kids where you put away money for your kid’s expenses every year and the government matches it for you. So, it’s a combination of like a 401k plus flex spending. In Singapore the government controls all housing allocation. And so if you have kids you get access to better housing. And in fact if you have more than a couple kids they will make sure that your grandparents get to live near you so that you have, you know, convenience and free child care...

But the scary thing is that they’ve done all this for 20 years, and all that’s happened is that their fertility rates has continued to drop further, and further, and further, and further. And it stands right now at about 1.3 which is about as low as any country has ever recorded a fertility rate in the history of the world... in societies, once it becomes common for people to not have kids, for people to be child free and they get to see what that really means to their lifestyle, it becomes very hard to convince them to take the enormous hit and actually go around, get around to having kids.

This brief rightly notes that "China now has too few young people, not too many. It has around eight people of working age for every person over 65. By 2050 it will have only 2.2." This is a demographic nightmare, an unsustainable economic picture and one that - if Singapore's example proves accurate - is almost impossible for alter via shifts in public policy.

Email | Print | Permalink | Comments | Share

Much of the brewing tension in the South China Sea hinges on how various claimants view existing international law. Patrick Cronin analyzes:

Similarly, China and the United States have fundamentally different interpretations of the United Nations Convention on the Law of the Sea (UNCLOS). One major difference is over whether and which type of military activities are permitted within the 200-nautical mile exclusive economic zone (EEZ) of a nation. China’s national interests and growing confidence lead to an expansive view of its EEZ and a narrow view of which military activities are permissible for a foreign nation to undertake within an EEZ. Such activities must be peaceful, and Chinese nationalists don’t consider intelligence gathering even by non-warships to be peaceful. The United States, on the other hand, not only contends that such information gathering is entirely within international law, but also that the United States has an obligation to periodically test the premise in order to maintain what it considers the global public good of freedom of the seas.

Lyle Goldstein doesn't seem to buy it:

Washington's focus on "freedom of navigation," which has inexplicably become the main pillar of current U.S. policy in the region, is actually rather absurd. China, the world's largest maritime trading nation by almost any measure, is very unlikely to threaten navigational freedoms -- its own economy is almost wholly reliant on those very freedoms. The claim that China's opposition to regular U.S. military surveillance activities in the South China Sea threatens "freedom of navigation" is likewise disingenuous and represents an unfortunate tendency to reach for the clever sound bite. In fact, such U.S. surveillance activities all along China's coasts are excessive to the point of seriously disrupting the bilateral relationship and should thus be decreased, especially if linked to concrete progress on Chinese military transparency.

This piece also dives into the legal issues surrounding U.S.-China tensions.

[Hat tip: Larison]

(AP Photo)

Email | Print | Permalink | Comments | Share

Daniel Larison continues the discussion about ideology and the rise of China:

I agree that ideology is an instrument of state power, and ideology as such wouldn’t exist except for the desire to acquire and exercise power, but this is what still leaves me puzzled. It doesn’t help the U.S. gain much of anything to stoke hostility towards China, and it isn’t clear to me that it is all that useful to the U.S. to try to encourage regime change in China. America won’t benefit from conflict with China, and it won’t benefit from prolonged instability in China and East Asia. If deploying liberal democratic ideology were actually being used to advance some concrete U.S. interest, that would be one thing, but instead it seems to have become an end in itself that requires the U.S. to put its interests at risk for the sake of prior ideological commitment.

I don't think the Obama administration (or the Bush administration for that matter) has ever been so bold as to declare that regime change is the end-goal of American policy toward China. That may be the implication of some of the ideologically-tinged rhetoric surrounding U.S. policy, but I don't know if either administration has come right out and said so. The further you get from the executive branch, however, the more overt the calls for changing China's regime tend to become.

It's true, I think, that ideological universalism has become an end of U.S. foreign policy in its own right - not just a means to other ends. Larison contends that such universalism won't help the U.S. advance its interests with respect to China:

Other nations don’t have to want to live under a Chinese-style system to accept Chinese investment and influence, and they don’t. In practice, democrats around the world are going to be interested in pursuing their respective national interests, and insofar as China supports or does not interfere with those there is nothing about China’s domestic regime that obviously limits the influence it can have. After all, it isn’t as if China’s neighbors would be less alarmed by its moves in the South China Sea if it were a democratic state. It is fundamentally what China does, not its reigning ideology or its internal repression, that makes its neighbors wary of its intentions.

I agree, although according to the Friedburg article we both cited, the manner in which China has pursued (and to some extent defined) its interests in the South China Sea is an expression of its ideology. I'm not sure about this - partly because I'm not intimately familiar with pre-Communist Chinese history and strategic policy, and partly because this same argument was trotted out about the Soviet Union and Russia and hasn't held up all that well. (Even a "democratic" Russia under Yeltsin complained vociferously about NATO expansion in the 1990s and attempted to exert influence over her neighbors - it was just too economically weak and internally disordered to be effective.)

Bottom line: I think that between China's actions and Washington's ideological commitments, there is ample cause to believe that a Cold War-style standoff is imminent, if not already underway.

Email | Print | Permalink | Comments | Share

Aaron Friedberg has a good piece in the latest issue of the National Interest on why conflict between the U.S. and China is inevitable:

Deep-seated patterns of power politics are thus driving the United States and China toward mistrust and competition, if not necessarily toward open conflict. But this is not all there is to the story. In contrast to what some realists claim, ideology matters at least as much as power in determining the course of relations among nations. The fact that America is a liberal democracy while China remains under authoritarian rule is a significant additional impetus for rivalry, an obstacle to stable, cooperative relations, and a source of mutual hostility and mistrust in its own right.

To which Larison responds:

If there is an “additional impetus for rivalry” between America and China on account of ideology, whence does this impetus come? Does it not come mainly from the American push for political change inside other countries? In other words, as Andrew Nathan says in his response:

As long as the West wants to change the Chinese political system, Beijing’s rulers will, as Friedberg says, quite rationally “believe that they are engaged in an ideological struggle, albeit one in which, until very recently, they have been almost entirely on the defensive.”

The question that comes to mind is this: why does the U.S. insist on waging such an ideological struggle, when it is likely to intensify any rivalry with China? There’s no question that ideology matters as much as power, but what remains puzzling is why states permit themselves to be held hostage to the dictates of ideology when these promise to fuel dangerous rivalries with other major powers.

There are, I think, two inter-related explanations for this. The first is that ideology is a form of power and states wield it when they think it helps them advance more mundane geo-strategic interests. To take the U.S.-China example - America's liberal democratic ideology is still fairly attractive globally, whereas not many people want to live in a single party communist autocracy that jails artists and Nobel Prize winners. Throwing this in China's face puts them on the defensive in the eyes of global public opinion and, by extension, makes it harder for China to plead its case on other issues of strategic importance. This is why many people who want to take a "harder line" with China over its growing "assertiveness" in Asia usually begin by urging American politicians to call out Beijing's human rights abuses.

The second explanation is that ideological parries are easy and demagogic. It's difficult, time consuming and complicated to suss out which states have legitimate claims to various pieces of aquatic territory and then to rally people around those issues. It's quite easy, by contrast, to call China (or any other state) "evil" and leave it at that.

Email | Print | Permalink | Comments | Share

Nick Trevethan says that investors aren't buying Nouriel Roubini's China pessimism:

Famed market bear Nouriel Roubini may be talking down China, but resource firms are betting billions that rapid urbanization and economic growth will soak up the country's massive infrastructure investment and prevent a hard landing.

They are buying up competitors, investing in new capacity and speeding expansion projects to feed breakneck growth in raw materials demand in the world's top consumer of commodities.

Email | Print | Permalink | Comments | Share

“I brought this picture out for you, Henry,” Donald Rumsfeld says to Henry Kissinger, proffering a framed black and white photo of a line of men sitting across from each other at a diplomatic gathering. “It was right after Vladivostok.”

“When you went to China with me?” Kissinger asks, perking up.

“I took you into China and introduced you to Zhou Enlai,” Rumsfeld says, with a smile and a slight chuckle. “No, no, that’s not how it worked.”

“No, but he was still alive, actually,” Kissinger says.

“Yes, you met with him,” Rumsfeld says. He has one hand in the pocket of his trademark fleece vest. “But here’s Deng Xiaoping, your friends Habib, and Winston Lord, and George Herbert Walker Bush, and Phil…”

“I remember that meeting,” Kissinger says, peering through his spectacles at the shadowy photo. “With Deng.”

The two veterans of a thousand policy arguments and diplomatic quarrels are quiet for a moment, looking into the past, at two lines of men divided by ideas and the sea, individuals who would shape the world for half a century and more.

Rumsfeld was hosting Kissinger - who inscribed a book to the two-time Defense Secretary as an “occasional adversary and permanent friend” - to promote the oracular diplomat’s new book, On China. It is a broad collection of his thoughts and anecdotes, with some reminiscing and a few policy prescriptions gained both from his more prominent diplomatic visits, conversations with Chinese leaders, and the over fifty times he’s been in the nation since. As the original, popular proponent of the long arc theory in respect to China, the former Secretary of State and National Security Advisor is now putting forward a recommendation for complementary growth and what he hopes to be a path to avoiding adversarial confrontation, written in longhand and released the same week as his eighty-eighth birthday.

Continue reading "Kissinger on China" »

Email | Print | Permalink | Comments | Share

Michael Auslin keys in on what I think will be one of the larger problems confronting the U.S.-China relationship if China's rise continues unabated. To wit: China will start to act like the United States:

While Beijing claims that Hanoi and Manila broke agreements on joint exploration, the world should be worried that China feels no qualms about using its growing military power to resolve disputes to its satisfaction.

Where would they get such a crazy idea?

Hypocrisy aside, I think Auslin raises the key challenge confronting the U.S. in Asia. Asian states don't want to be pushed around by China (a good thing) but they don't want to be seen as "balancing against" China for the sake of good regional relations, which are critical for continued economic development. Threading this needle really depends on how "expansive" China views the prerogatives of her growing military power. If the Beijing equivalent of "benevolent global hegemony" emerges - watch out.

(AP Photo)

Email | Print | Permalink | Comments | Share

Matthew Good - whose Underdogs and Beautiful Midnight albums served as the soundtrack to the teenage years of suburban Toronto youth who spent the late-90s shoulder-tapping outside The Beer Store and shotgunning beer in dorm bathrooms - oddly enough popped back onto the radar this week in an unexpected way.

Borrowing from The Atlantic Wire:

China is at work on its first aircraft carrier which, Canadian musician and Guardian contributor Matthew Good notes, "has some defence analysts concerned, but they'd be the sort that view any alteration in the current global status quo discomforting." Not only is "a single U.S. carrier strike group, at present, the most powerful military asset in the world," but we have 11 of them. That's "two more active carriers than the rest of the world combined." The power a single one of these holds, Good explains, "could--if fully unleashed--devastate most nations on earth." Still, he acknowledges, the Chinese do have at least one sub "capable of launching nuclear weapons" and suspected to be working on two more. But this artillery hardly holds a candle to the U.S.'s "288 nuclear warheads per boat, each possessing a maximum yield of 475 kilotonnes." Good muses, "What an amazing technological age we live in. We can't feed the world, but by God we can blow it up."

What struck me first, judging from his picture byline, was that I'm not the only one who's put on a few pounds since the summer of '99. Sipping wine would come later in life, but in retrospect many of us ought to have at least been chugging lite beer while Mr. Good's rock anthems cranked from the five-disc CD stereo.

But on to the substance of the article which, if nothing else, is very informative. It's full of dry facts about how both China and the U.S. can destroy the world a couple times over. Apparently a deft touch in songwriting doesn't necessarily translate to op-ed pieces.

Good appears confounded by concerns over China's naval development, when, in his view, we should actually be worried about America's already formidable forces and how the resources to build and maintain such deadly arsenals could be put to more humanitarian purposes.

In my younger days, Good could do no wrong in my eyes. But, today, I must disagree with the erstwhile Canadian rocker.

China's rise is indeed inevitable. On track to be the world's largest economy, it's understandable that, in an age of Somali pirates and other rogue actors with out-sized abilities, China's national security interests would extend in lockstep with it's economic reach around the world. The Middle Kingdom must protect the trade routes and supply of raw material that have become absolutely vital to the Politburo as it seeks to maintain social harmony at home.

The concern of defense analysts, however, stems from the opaque nature of the People's Liberation Army (PLA). Even to the closest Asia-watchers, it remains unclear if China intends for its ascension to be one of benevolent and enlightened self-interest or aggressive and rancorous nationalism. Just last week Vietnam accused China of destroying a seismic survey boat in the South China Sea, while China said that Vietnam had "gravely violated" its sovereignty and warned its neighbor to stop looking for oil in the ocean without Chinese permission, said CFR.org.

Until it's clear which path the Chinese have embarked on, the U.S. along with China's increasingly insecure neighbors will have no choice but to brace for the worst while being mindful not to push the PLA into a corner and onto the defensive.

Otherwise the world could have a real time bomb on its hands. Hit it, Matt!

Alim

Email | Print | Permalink | Comments | Share

Alex Frangos examines which economies will take a hit if China's growth slows:

The first set of economies affected would be big commodity producers that sell to China or rely on China’s demand indirectly. Top of that list would include Australia (coal, iron ore, natural gas), South Africa and Brazil (industrial metals) and Chile (copper). Southeast Asian countries such as Thailand and Vietnam supply rubber, and Indonesia provides a lot of coal.

Those countries’ currencies, such as the Australian dollar, Brazilian real and Chilean peso, which are at record or multiyear highs, would pull back.

Another impact of a China hard landing would be oversupplies in China of steel, machinery and other basic-material items, says Mr. Anderson. During a brief economic slowdown last decade, China reduced a glut by exporting those items at very low prices, which triggered a global drop in steel prices and political standoffs with the U.S. and Europe, where steel industries have bristled in the past over Chinese steel’s flooding global markets.

China’s neighbors South Korea, Taiwan and Japan, which supply heavy machinery for construction and manufacturing, would also get hit.

Higher on the value chain would be countries that produce the high-tech goods needed for China’s burgeoning manufacturing industry, especially Germany, which relies heavily on exports to drive its economy.

Email | Print | Permalink | Comments | Share

According to a new Pentagon doctrine, the U.S. will consider cyber-attacks acts of war:

The Pentagon's first formal cyber strategy, unclassified portions of which are expected to become public next month, represents an early attempt to grapple with a changing world in which a hacker could pose as significant a threat to U.S. nuclear reactors, subways or pipelines as a hostile country's military.

In part, the Pentagon intends its plan as a warning to potential adversaries of the consequences of attacking the U.S. in this way. "If you shut down our power grid, maybe we will put a missile down one of your smokestacks," said a military official.

So does this mean that, according to the Pentagon, Iran would be justified in launching a missile or two at an Israeli or American power plant in response to Stuxnet? It sure sounds that way.

Thomas Barnett sees this aimed squarely not at Iran but China:

This is an destabilizing step sideways in our security relationship with China: Beijing is being warned that its current and ongoing behavior can - at any time - be loosely interpreted as an act of war. Whatever situations or crises ensue, that handy rationale is now always sitting in the Pentagon's back pocket, because I guarantee you, whenever big-war enthusiasts want to play that card, the Defense Department will be able to muster - at a moment's notice - a long list of Chinese hacking attacks over the previous X hours/days/weeks/months. So when the President asks, "Do we have evidence that the Chinese are targeting us at this time for cyber-sabotage?" The answer will always be yes.

Are you fearful of a "Guns of August" scenario erupting with the Chinese? You should be now. "Archduke Ferdinand" currently lives inside virtually any US cyber network you care to cite.

I have a hard time believing that the U.S. would be eager to respond to Chinese hacking with an overt act of military retaliation, which could invite a much larger military confrontation between two nuclear-armed states. I do think this paves the way for the U.S. to respond "in kind" to China - although I have to think (and hope) that when it comes to hacking and cyber espionage, we're giving just as good, if not better, than we're getting.

Email | Print | Permalink | Comments | Share

The news yesterday that China may build a naval base in Pakistan has raised some eyebrows. Gideon Rachman observes:

The story has come out of Pakistan, following the visit of the Pakistani prime minister to China last week. It may simply reflect Pakistani fury with the US, following the Bin Laden killing – rather than any genuine Chinese decision to go for an overseas naval base. Some western policymakers reckon that the Chinese will actually be wincing at the appearance of this story in the western press, since it will heighten the perception that China is overplaying its hand in the Pacific – an idea that has helped America to strengthen its military alliances across the region.

I don't think it's a Pakistan snub to the U.S., after all there are good strategic reasons for Pakistan and China to partner. And, as Rediff reports, they have been steadily expanding ties for some time:

A free trade area is in place from 2006, raw materials exploitation is in full swing in different parts of Pakistan, while China is building (often without international competitive bidding) infrastructure projects such as widening Karakoram highway, railway projects (closer to Abbottabad), port facilities at Gwadar and Karachi, hydro-electric projects in Pakistan-occupied Kashmir, etc. Also, Pakistan procured 50 new fighter aircraft from China during Gilani's visit.

China had in the recent past substantially increased military supplies to Pakistan -- including JF-17 fighters, four frigates, six submarines, early warning aircraft and other ground forces equipment. More such projects are committed during this visit. Some Chinese retired naval officers and others have also demanded recently that China should set up military "facilities" in Pakistan. After the Chinese assistance to the Chashma III and IV nuclear power plants were cleared by the International Atomic Energy Agency in March this year (as a counter to the US-India 123 agreement), and as moves towards the Fissile Material Cut-off Treaty are being made, the recent news about substantial increases in Pakistan's capability to produce nuclear warheads, is not surprising.

Email | Print | Permalink | Comments | Share

In an effort to organize my own thoughts on the killing of Osama bin Laden, I find myself returning over and over again to Peter Beinart's take on the terror mastermind's demise:

President Obama now has his best chance since taking office to acknowledge some simple, long-overdue truths. Terrorism does not represent the greatest threat to American security; debt does, and our anti-terror efforts are exacerbating the problem. We do not face, as we did in the 1930s, a totalitarian foe with global ideological appeal. We face competitors who, in varying ways, have imported aspects of our democratic capitalist ideology, and are beating us at our own game.

Bin Laden was a monster and a distraction. It is good that he is dead, partly because the bereaved deserve justice, but also because his shadow kept us from seeing clearly the larger challenges we face. The war on terror is over; Al Qaeda lost. Now for the really hard stuff; let’s hope we haven’t deferred it too long.

The competitor Beinart alludes to, I'm assuming, is China, and I can't help but wonder if bin Laden's death marks the end of an epoch in American foreign policy. Terrorism obviously isn't going anywhere; it existed prior to 9/11, and it will continue to exist long after. The so-called Global War on Terrorism was less a global understanding than a kind of framework for How The World Works According to Washington. The American military has been and will for the foreseeable future remain the preeminent power on earth, but to justify and rationalize that hegemony there must be rules; a kind of flowchart or S.O.P. to help the Beltway make sense of American power.

The War on Terrorism provided Washington's pundits and policymakers with a handy paradigm, much as the Cold War did throughout the latter half of the 20th Century. Will this change? Will a symbolic death lead to a more substantive reappraisal of American policy? Keep in mind that bin Laden's arguably symbolic termination precedes an actual drawdown of American troops from Afghanistan later this year. So while the generals - and the bloggers, and the pundits, and the pols and the wonks - continue to fight and feud over the last war - will we employ 'COIN' or 'Offshore Balancing' in our next indefinite military campaign? - I can't help but think that the American public has already moved on.

And who can possibly blame them? My own gripe with the War on Terrorism, specifically the Afghan mission, was the apparent indefiniteness of the mission. In a decade full of 'surges' and small accomplishments, rarely has there been as decisive and certain an action as bin Laden's killing. This man attacked us, and now he's dead. Seems simple enough.

That's why I can understand last night's displays of revelry and pure emotion in Washington, New York and elsewhere. After nearly ten years of color codes, TSA molestations and frequent condescension from the intelligentsia, the American people finally got a cut and dry result - a mission truly accomplished.

But where to from here for American foreign policy? For all the shortcomings and confusion that came with the GWOT, it was, at the very least, a doctrine premised on national defense. But if, getting back to Beinart's point, the War on Terror is to be replaced by a doctrine of counter-declinism, deficit hawkishness and Chinese containment, then I fear we may be headed toward an even uglier foreign policy paradigm.

China has gradually crept onto the American radar screen, and Beijing, for its own part, has been a busy bee.

With bin Laden now dead, and U.S. withdrawal (kind of) underway in the Near East, is China the next in line to consume America's imagination and energy? And will Washington follow? What happens, in other words, when one distracted giant finally opens its eyes, only to find another right in front of it?

Update: Evan Osnos gives a rather appropriate take on Chinese reactions to bin Laden's killing.

(AP Photo)

Email | Print | Permalink | Comments | Share

It's rising, according to a new paper. (pdf) However, most of the rise is being driven by China and Russia. In some of the richer nations, such as the U.S., consumption is leveling off or even falling (despite my best efforts):

[Hat tip: Felix Samon]

Email | Print | Permalink | Comments | Share

Daniel Blumenthal argues that China is experiencing a "resurgence" of "foreign policy aggression." Here is his indictment:

* China "declared" the South China sea a core interest.
* China did not "condemn" North Korea.
* China "demanded" the release of a fishing boat captain detained by Japan.
* China halted the sale of rare earth minerals to Japan.
* China "reneged" on an agreement to air President Obama's speech on state television without censorship.
* China "moved" some short range missles around.
* China "displayed" a new stealth fighter.

Scary stuff. Now, in the same period of time, what has the U.S. done? Let's review:

* Sent additional soldiers to fight a war in Afghanistan.
* Ramped up a bombing campaign against Pakistan's tribal region.
* Provided covert military assistance for military strikes in Yemen.
* Agreed to sell $60 billion in advanced military hardware to Saudi Arabia.
* Cooperated with Israel to conduct sabotage operations against Iran's nuclear facilities
* Sent its secretary of defense into Iraq to request permission to station troops in the country past an agreed upon deadline.
* Bombed Libya.

(AP Photo)

Email | Print | Permalink | Comments | Share

According to a new poll from GlobeScan, public support for a free market economy is lower in the U.S. than it is in... China.

Email | Print | Permalink | Comments | Share

Several analysts have been arguing that China has, if not feet of clay, been overvalued. Via Ryan Avent, a new paper on China's economic growth makes the case that China is due for an economic slowdown. Avent analyzes:

The story this suggests is one that's quite at odds with the prevailing view in much of the world—that China's relentless growth will continue until it dominates the global economy. Another possibility arises. Within a few years, we may be reading "What's the matter with China?" stories. A growth slowdown and demographic difficulties will challenge the policy status quo and could potentially expose serious weaknesses in the growth model (as Warren Buffet says, when the tide goes out, one sees who's been swimming naked). India, on the other hand, will be ascendent.

UPDATE: Avent isn't alone. None other than Doctor Doom himself thinks China's headed for a crash:

I’m writing on the heels of two trips to China….My meetings deepened my own impression and RGE’s long-standing house view of a potentially destabilizing contradiction between short- and medium-term economic performance: The economy is overheating here and now, but I’m convinced that in the medium term China’s overinvestment will prove deflationary both domestically and globally. Once increasing fixed investment becomes impossible—most likely after 2013—China is poised for a sharp slowdown. Continuing down the investment-led growth path will exacerbate the visible glut of capacity in manufacturing, real estate and infrastructure. I think this dichotomy between the high-growth/inflation pressures of the next couple of years and growth hitting a brick wall in the second half of the quinquennium is far more important than the current focus on a “soft landing” amid double-digit growth.

(AP Photo)

Email | Print | Permalink | Comments | Share

Is China building out a series of naval bases in friendly states on its perimeter, the so-called "string of pearls?" Billy Tea thinks not:

First and foremost, China does have some involvement in the identified ports. But with the exception of Sri Lanka's Hambantota and perhaps Myanmar's Sittwe, they are used not only by China and there are currently no signs whatsoever of any developments for future military purposes.

Second, while there is no denying that China has an interest in building relations with strategically located countries, it is important to understand the great power context these countries face. To openly side with China over other regional powers, including India and the United States, would be extremely risky diplomacy for these smaller countries.

Indeed, in today's globalized world, choosing one great power's side over another's unnecessarily limits countries' economic and political options. That's especially true for less-developed countries like Myanmar, Pakistan, Bangladesh, and Sri Lanka - all of which are reliant on foreign trade, aid and investment and for development purposes need all they can get. In the current geopolitical context, countries stand to gain the most by subtly playing great power off one another, rather than committing to one in particular.

Third, government officials in the respective "pearl" countries have openly repudiated reports they have given China any preferential treatment and that Beijing is quietly building and/or planning to build military bases in their sovereign territories.

Ultimately, the first and second rationales seems more persuasive than the third. Countries lie all the time about strategic matters, and it wouldn't surprise anyone if China's neighbors were engaged in some misdirection about their own commitments.

Email | Print | Permalink | Comments | Share

Via Daniel Drezner, it looks like Secretary Clinton is rethinking that whole "smart power" thing:

As Clinton railed against cuts sought by Republican to the U.S. foreign aid program, she told senators, "We are a competition for influence with China. Let's put aside the humanitarian, do-good side of what we believe in. Let's just talk straight realpolitik. We are in competition with China."

She noted a "huge energy find" in Papua New Guinea by U.S. company Exxon Mobil Corp., which has begun drilling for natural gas there. Clinton said China was jockeying for influence in the region and seeing how it could "come in behind us and come in under us."...

She said foreign assistance was important on humanitarian and moral grounds, but also strategically essential for America's global influence.

"I mean, if anybody thinks that our retreating on these issues is somehow going to be irrelevant to the maintenance of our leadership in a world where we are competing with China, where we are competing with Iran, that is a mistaken notion," Clinton said.

Grouping China and Iran into the same category is wrong for a number of reasons, not least because the nature of the relationships are fundamentally different. China and the U.S. may not be fast friends, but the relationship is considerably better than it is between the U.S. and Iran. Having America's top diplomat lump the two nations together doesn't seem particularly helpful.

Moreover, if the best the administration can do in defense of foreign aid is complain that Exxon Mobile might get the short end of a few Asia Pacific oil deals, they're going to have to up their game.

(AP Photo)

Email | Print | Permalink | Comments | Share

Max Bergmann explains why no one cares what China has to say about unrest in the Middle East:

China doesn’t have an international system it is pushing, it has China. And it is pretty hard to develop a new alternative international order in an age of nationalism, liberalism, and democracy whose sole function is to benefit the mothership power. China is developing and expanding its relations with other countries and building somewhat of a network of associates. But these are largely transactional relationships. A vivid example of the nature of China’s priorities was evident in the evacuation of Chinese oil workers from Libya. China was in Libya because it could get oil, but in Egypt, where resources are scarce, China was relatively absent. For the US the situation was reversed. We had close ties with Egypt and paid it billions, despite it being resource poor, because Egypt is critical to regional stability and peace.

I think this is largely correct, and clearly the fact that the U.S. has a large network of allies is an American strength. That said, having a more "transactional" relationship with the Middle East specifically doesn't sound like a bad thing. The world may not care what China has to say about the mess in the Middle East, but neither do they expect China to clean it up.

(AP Photo)

Email | Print | Permalink | Comments | Share

Philip Dorling reports that China has its eyes on bulking up its nuclear forces:

Top Chinese officials have declared that there can be no limit to the expansion of Beijing's nuclear arsenal amid growing regional fears that it will eventually equal that of the United States with profound consequences for the strategic balance in Asia.

Records of secret US-China defence consultations, leaked to WikiLeaks and provided to Asia Sentinel, have revealed that US diplomats have repeatedly failed to persuade the rising Asian superpower to be more transparent about its nuclear forces and Chinese officials have privately acknowledged a desire for military advantage underpins continuing secrecy.

The basic argument under-pinning the Obama administration's push to eliminate nuclear weapons is that unless the U.S. takes the lead in delegitimizing them by slashing its own arsenal, other states will naturally seek to build up their own forces. Well, the U.S. has committed to cut its nuclear arsenal and both China and Pakistan have recently indicated that their nuclear arsenals will expand.

That's not to say that the U.S. can't afford to trim its nuclear arsenal, it can. But the idea that doing so and showing "leadership" on this issue is having a demonstration effect on problem states seems unfounded. In fact, especially with respect to China's nuclear forces, the only way to prevent further nuclear weapons states from appearing is for the U.S. to reaffirm its commitment to use nuclear weapons to defend her allies in Asia.

Email | Print | Permalink | Comments | Share

In the last few months, Russia and Japan have been trading barbs over the Kuril Islands. This follows heightened tension between Japan and China over the Senkaku Island chain. These territorial dust-ups leads J.E. Dyer to issue the following warning:

Keeping our foreign-policy thinking on autopilot leaves our spokesmen giving narrowly conceived, legalistic responses that are inadequate to a changing situation. America’s core ally in the Far East is under real territorial pressure from both Russia and China — and the reflexive assumption that any given situation will stabilize itself, with little or no inconvenience to the U.S., is increasingly outdated.

If we're speaking about 'reflexive assumptions,' lets discuss Dyer's. I'll state up front that my knowledge of both the Kuril and Senkaku disputes is pretty topical and I couldn't weigh in definitely on which country has the stronger claim (hit the links above for the Wiki-versions of both disputes). But Dyer isn't litigating the cases either, just simply assuming that the U.S. must stand with Japan. Clearly the U.S. is obligated to defend Japan, but that does not mean that the U.S. should defend Japanese claims that have no merit.

(Photo of Kuril Islands via Wikipedia Commons)

Email | Print | Permalink | Comments | Share

Today, the big news out of Asia is that China has overtaken Japan as the world's second largest economy. But polls have indicated that Americans have believed, erroneously, that China has been the world's largest economy for a while now.

The most recent figures come from Gallup:

Rasmussen found that 45 percent of Americans polled knew their country's economy was the biggest. In January, Pew Research reported that 47 percent of Americans thought China was the world's largest economy, while only 31 percent correctly noted that the U.S. was still the world's largest.

Needless to say, it's difficult for policymakers to address issues surrounding China if so many people don't understand the actual dynamics of the relationship.

Email | Print | Permalink | Comments | Share

One of the biggest impediments to China's rise to great power status is the fact that China is surrounded by powerful neighbors. This, for instance, is how Russia is handling it:

The Kremlin’s choice of stimulus package is a bit of a throwback, though—among other things, a new fleet of warships to challenge China. Last week Prime Minister Vladimir Putin announced a whopping $678 billion package of new defense spending for the next decade, with a quarter of the money going to revamp Russia’s Pacific fleet. On the Kremlin’s shopping list: 20 new ships, including a new class of attack submarines, plus new missile subs, frigates, and an aircraft carrier.

Email | Print | Permalink | Comments | Share

If you need a respite from Egypt, here's Martin Jacques on China's rise.

Email | Print | Permalink | Comments | Share

We pause from Egypt-blogging to bring you this important news:

China's state broadcaster used footage that appears to have been taken from a Hollywood film in one of its news reports - but not for the first time.

A China Central Television story about the country's air force showed an explosion that was identical to a scene from the 1986 film Top Gun.

The broadcaster often uses film clips in its news reports.

A person familiar with the company said it was currently trying to set up a system to contain this situation.

Look for the explosion at 1:11.

[Hat tip: The Gulf Blog]

Email | Print | Permalink | Comments | Share

According to a report from the C.I.A., college students in China frequently spy on peers and professors:

Established in 1989 after the Tienanmen Square protests, “the principal objective of the Student Informant System [SIS] is to ensure campus stability and to control the debate and discussion of politically sensitive issues,” the CIA report said. “Students have had their scholarships revoked and their academic records penalized because of information provided by student informants that is sometimes highly subjective, such as facial expressions.”

This is not without controversy, as the report notes that some Chinese students are posting the names of student informants online.

Email | Print | Permalink | Comments | Share

Pew Research analyzes U.S. media coverage of China:

In general, larger economic issues involving trade and economic policy with China tend to be overshadowed by different issues -- including tainted imports and disasters. And in any given week, ongoing economic issues are even less visible in the news.

Email | Print | Permalink | Comments | Share

Nina Hachigian says that American neoconservatives are undermining U.S. policy toward China by viewing international institutions skeptically:

So while China invokes a 19th-century ideal of sovereignty to justify decisions that harm U.S. interests, some neoconservatives are championing the same antiquated notions — legitimizing China’s rejection of international standards and rules.

Yet the United States has benefited enormously from adopting a more modern view of sovereignty. Agreeing to a common set of trade rules means, for example, that Americans profit from exporting farm machinery and eat bananas year round.

The likelihood of a nuclear accident or terrorist incident has gone down — thanks to the Nuclear Nonproliferation Treaty, which requires the United States and the other 190-odd signatories to allow inspectors from the International Atomic Energy Agency at their nuclear facilities. Funding the International Monetary Fund pays dividends in a more stable financial system; and complying with World Health Organization requests has meant less vulnerability to deadly viruses.

It is unclear whether conservatives think these are not important benefits or that the U.S. can somehow enjoy them without, in turn, meeting its international obligations. Either way, it is a dangerous message for a rising China.

I don't agree with everything in the piece (specifically I don't think the view Hachigian decries is really 'neoconservative'), but it is worth noting that seeing as the U.S. had a major, if not decisive, role to play in shaping and creating the norms and institutions of the post World War II international order, it's definitively more favorable to the United States to have China move in that direction than to have the U.S. embrace China's view of how the world should work.

That said, China's "19th century worldview" hasn't lead the country to embark in multiple, costly military interventions around the globe, or burn its finite resources trying to "police" the globe - so maybe there's more to recommend it than Hachigian lets on.

Email | Print | Permalink | Comments | Share

Yiyi Chen, a professor at the Shanghai Jiaotong University and an adviser on Middle East affairs to the Beijing government, told The Media Line that Beijing in no hurry to significantly increase its role in the region. Right now, its focus is on studying the region and its problems carefully before deepening its involvement.

“The Western way isn’t the only way. The U.S. way has its value, but apparently it hasn’t solved the crises and conflicts of the region,” Chen said. “China has experienced the problem of foreign cultures and foreign value systems trying to impose their views on others ...We don’t have a view that we want to impose on the countries of the region.”

China’s growing economic and political clout hasn’t yet made itself felt in the Middle East, even as it has become the largest importer of the region’s oil, buying just over a tenth of the Gulf’s output and a quarter of Iran’s. But Beijing is starting to exercise unprecedented influence on critical issues, most notably by objecting efforts by the West to impose tougher sanctions on Iran. - David Rosenberg

From an American perspective, there's two ways to look at this. First, one can be enraged (or bemused) at how China is free-riding on America's provision of Persian Gulf security. While the American taxpayer and U.S. military bear the costs of keeping the region (relatively) stable, China bears none of those costs but enjoys all the benefits. The second way to view this is that the U.S. has China by the proverbial short hairs should relations deteriorate between the two great powers. With so much U.S. military power in the Gulf, it would be easy to disrupt energy shipments to China, but hard for China to inflict such a blow on the U.S.

What's interesting is Chinese thinking on the matter - insofar as Chen is a representative example. For the moment at least it looks like China is happy playing an "off-shore" role, which means the first interpretation mentioned above (free-rider) is perhaps a more accurate description of what's going on. Of course, China could very well want to play a more overt role in the region and simply lack the capacity or opportunity.

Email | Print | Permalink | Comments | Share

Rasmussen has a new survey out gaging people's perception of the Obama administration's approach to alliance management:

The latest Rasmussen Reports national telephone survey shows that a plurality of Likely Voters (41%) says Obama believes America’s allies should do what the United States wants most often. But 23% think Obama believes America should do what its allies want more often, while 27% think neither scenario applies.

By contrast, 55% of all U.S. voters say our allies should do what the United States wants more often, and just nine percent (9%) think America should do want its allies want instead. Thirty-one percent (31%) agree with neither course....

Republicans are more likely than Democrats and voters not affiliated with either major political party to believe Obama thinks the United States should do what its allies want most often. While most Republicans hold the opposite belief themselves, roughly half of Democrats agree. Unaffiliated voters are more prone to choose neither option.

One of the things that's somewhat interesting about this finding is how it relates to the just concluded summit with China's President Hu Jintao. Before and during the summit, there was a lot of talk about how important it was for President Obama to publicly excoriate and shame China about its poor human rights record. The basic idea, I guess, is that this scolding would produce better behavior from China.

But consider the Rasmussen finding above - many Americans aren't particularly interested in doing what their allies want them to do, much less a country that's a quasi-adversary. Now, put yourself in the place of the Chinese - not exactly fast-friends with the U.S. - and ask whether they're going to be moved to make reforms at the behest of hectoring from American politicians.

Email | Print | Permalink | Comments | Share

Arthur Herman sees China's test of the J-20 stealth fighter as a "Sputnik" moment:

Compare this to the moment the Soviet Union tested its first atomic bomb in 1949. The face of modern warfare has changed--and America's military superiority hangs in the balance.

Air Power Australia, a highly respected defense-analysis outfit, has pronounced the J-20 "a techno-strategic coup." The US Navy's F/A 18, the mainstay of our naval-air fleet, is "outclassed in every respect." So is the plane the Pentagon is counting on to form the next generation of supersonic fighter, the F-35, and so are our integrated air-defense systems. Right now, only our Stealth B-2 bombers and F-22 Raptors stand between us and aviation obsolescence, but President Obama has axed the Raptor program.

There is a long and well-document tendency in U.S. foreign policy circles to vastly over-state the capabilities of American adversaries. From the non-existent "missile gap" decried by President Kennedy to Saddam Hussein's supposed nuclear weapons and WMD. China's military modernization might produce a force capable of imposing greater harm on the United States should the two countries come to blows in the Pacific, but that's a far cry from the force the Soviet Union fielded. (And the J-20, like much of China's military, is completely unproven and untested in combat.)

The analogy to Sputnik is overwrought for more than just technological reasons. Does Herman really believe that China aims to ignite global revolutions to impose Beijing-lead communist governments around the world?

(AP Photo)

Email | Print | Permalink | Comments | Share

Because of the disjointed setup with respective language translators, President Obama's joint press conference with Chinese President Hu Jintao was often interrupted for translations of remarks and questions into both English and Chinese. But it also allowed an opportunity for bilingual speakers to pick up nuances from the original remarks.

Hu, true to form, came well prepared, particularly with numbers and statistics, as befitting a former engineer. He handled all queries comfortably, even though as the head of a one-party dictatorship, he's never obliged to face a blistering free press at home.

On one occasion, Hu did flash noticeable annoyance, even a slight temper, when asked why congressional leaders are snubbing him at the state dinner tonight. He tersely concluded his remarks with "that's a question for him," and pointed to President Obama. It was a moment reminiscent of John McCain's contempt during a debate in the 2008 presidential election when he pointed to Obama and barked "that one."

Hu did not say "President Obama" as the English translator did, and he was not at all amused, even offended by such a snub. And at least partially he blamed Obama because he must have believed that Obama should have held sway to prevent an incident that would be viewed as a colossal "loss of face" for him at home.

Obama, on the other hand, kept his composure and handled the questions deftly, with skillful dancing on the inevitable and contentious issue of China's human rights record. His one light-hearted moment, though, was also lost in translation.

When asked of a potential challenge from Amb. Jon Huntsman for the presidency in 2012, Obama quipped that the fact that he and Huntsman (a former Republican governor of Utah) work so well together has to help Huntsman in the GOP primary. But the Chinese translator did not get the joke and spoke as if Obama meant it sincerely.

The technological problems have to be seen as somewhat of an embarrassment for the White House. With the leaders of the two most powerful countries meeting in a summit, the U.S. appeared ill-prepared for something as simple as a press conference. The quality of the translators (both for English and Mandarin) is also questionable, as both spoke with a slight accent.

Maybe it's time to boost the ranks of fluent Chinese speakers in the U.S. diplomatic corps. These summits with China's leaders will only increase in frequency for the foreseeable future.

(AP Photo)

Email | Print | Permalink | Comments | Share

The BBC has a series of slides detailing the balance of economic and military power between the U.S. and China. Check it out.

Email | Print | Permalink | Comments | Share

The Foreign Policy Initiative calls for a rethink of U.S. policy toward China. Among their recommendations is to ramp up arms sales to China's neighbors and harangue China "in every available forum at every available opportunity" about its human rights record. Then they suggest:

Seek solutions to major international issues without China. Though the P5+1 and Six Party Talks were, conceptually, an innovative method to deal with Iran and North Korea; in practice, they have served as another mechanism by which Russia and China continue to resist efforts to compel their client states. Instead, the United States, in concert with its democratic allies, should seek other avenues to impair these regimes’ capabilities.

This is something I'd love to see fleshed out more. How, exactly, does the U.S. find a "solution" to North Korea that does not involve China? According to my map, the two countries share a border and China is North Korea's major trading partner.

(AP Photo)

Email | Print | Permalink | Comments | Share

Last week, Pew Research published findings from a survey of U.S. attitudes on China. Now a poll conducted by Horizon Research and published in China Daily reports on Chinese attitudes about the United States:

The number of Chinese people who view Beijing's ties with Washington as "very important" has doubled in the past year, while most people believe relations will remain stable or improve despite recent turbulence, a survey reveals ahead of President Hu Jintao's upcoming visit to the United State...

Nearly seven in 10 (69.9%) believe that in commercial affairs the world's two largest economies are both competitors and partners.

Most people consider that China made a greater contribution than the US in handling the financial crisis and trying to combat climate change, the survey showed.

Asked to value Beijing's ties with Washington, more than half (54.3%) of respondents said they regard Sino-US ties as "very important", more than double the 26 percent in 2009.

An overwhelming nine in 10 (90.9%) viewed the relationship as "important".

However, more than half of the respondents believed that ties had deteriorated in 2010, and nearly four in 10 (the report did not give the specific number) said current relations are "in a bad situation".

Eighty percent said the US was to blame.

As to future ties, six in 10 (no specific figure available) said the relationship will generally remain stable, while about one quarter were more positive, saying it will get better.

People under 30 are more optimistic than those in other age groups.

[Hat tip: China Real Time]

Email | Print | Permalink | Comments | Share

Galrahn at Information Dissemination is worried about the implications of China's test of its J-20 stealth jet:

It isn't China's military technology I am concerned about, at least not today or anytime in the near future. It is how difficult it is to build a relationship on trust with China when you are given every impression that the President of China is probably being dishonest, or disingenuous at best, to your face in a discussion where you sit across from one another. Know your history - this is what the Japanese were like in the 1930s.

Meanwhile, Bill Bishop runs down various interpretations of the test flight and of reports that Chinese President Hu Jianto did not know the test was about to go down:

1. Hu did not know. This is the terrifying scenario, as it means that in spite of his role as head of the CMC and his promotion of many top generals, the PLA is at risk of major rupture with the Party and civilian leadership. In this scenario we can expect the jockeying for 2012 succession to be especially brutal and potentially spill outside China’s borders;

2. The senior defense official simply misunderstood the Chinese reaction and/or was misunderstood by the reporters. While it is probable that many of the Chinese government officials (aka civilians) did not know, Hu as head of CMC did know (UPDATE: Victor Shih suggested that Hu likely approved the flight but left the timing up to the PLA). Perhaps there is some ambiguity around the quote “it was clear the civilian leadership was uninformed” that led to the conclusion that Hu was unaware of the flight, as people assume he is a “civilian” and not also military given his role as Chairman of the CMC;

3. The senior defense official has a bias towards believing in a civilian-military split, and/or has an agenda to push said “split”. “Evidence” that the PLA has “gone rogue” would be a boon to the Pentagon and defense contractors;

4. The Chinese put on an elaborate charade designed to lead US officials to believe in a military-civilian split. Why would they do this? Perhaps they think that if the US believes that Hu is weakened and in a power struggle with the “hardliners” then the US will go easy on him to avoid “undermining” him and upsetting a “delicate balance”. If you think this suggestion is crazy you are behind in your reading of Chinese military classics like “Art of War”, “Three Kingdoms” and others.

I lean toward #2, but am not really sure at this point.

(AP Photo)

Email | Print | Permalink | Comments | Share

Pew Research has released a new survey on U.S. views of China that contains many interesting findings:

Nearly half (47%) say Asia is most important, compared with just 37% who say Europe, home to many of America's closest traditional allies....

The latest national survey by the Pew Research Center for the People & the Press, conducted January 5-9 among 1,503 adults finds that by two-to-one (60% to 27%) Americans see China's economic strength as a greater threat than its military strength. And as Obama goes into talks with the Chinese president, a 53% majority say it is very important for the U.S. to get tougher with China on trade and economic issues.

Yet while Americans may see China as a problem, relatively few describe it as an adversary, and a 58% majority say it is very important to build a stronger relationship between the U.S. and China. By comparison, promoting human rights and better environmental policies and practices are important, but lower priorities.

It's interesting to note the divergence between where the U.S. public expresses concern with China - along the economic dimension - and where most of the "strategic class" of analysts find alarm - China's military build-up.

Email | Print | Permalink | Comments | Share

Jacob Heilbrunn thinks they might be:

But the temptation to use North Korea as a weapon to torment Washington may be too much for Beijing's hawkish types to resist. If they cooperated, America would have less incentive to bulk up, or maintain, its forces in the region. Instead, China is, from its own standpoint, perversely encouraging America to remain. But that's what happens when the civilian diplomats get shunted aside by the hawkish military neocons. And for now, it looks as though China's neocons have the upper hand. Like the neocons who wrecked American foreign policy, they may be poised to follow policies that are actually inimical to China's true interests, while arguing that they are pursuing its true ones.

Email | Print | Permalink | Comments | Share

The Wall Street Journal assess the implications of the testing of a stealth jet during Defense Secretary Gates' visit to China:

China's first test flight of its stealth fighter Tuesday overshadowed a mission to China by U.S. Defense Secretary Robert Gates to repair frayed military relations, and prompted concern about whether President Hu Jintao and the civilian leadership are fully in control of the increasingly powerful armed forces.

U.S. officials said that President Hu appeared to be taken by surprise when Mr. Gates asked him about the test flight during a meeting, hours after pictures and accounts of it began appearing online.

David Axe says not to worry:

First, for all its apparent design strengths as a bomber or a fighter, the J-20 seems to rely on imported Russian engines — just as many other Chinese jets do. That gives Russia effective veto power over the J-20’s use in combat. All Moscow has to do is shut down the supply and support of engines to ground the J-20 and indeed most of the PLAAF.

Secondly, there are lots of ways to shoot down or otherwise disable Chinese fighters. Counting just American forces, there are: Air Force F-15s, F-16s, F-22s and (soon) F-35s; Navy and Marine F/A-18s and F-35s; Navy Aegis destroyers and cruisers; and Army surface-to-air missiles. But in a major shooting war, the Navy and Air Force wouldn’t wait for J-20s or other Chinese fighters to even take off. Cruise-missile-armed submarines and bombers would pound Chinese airfields; the Air Forces would take down Chinese satellites and thus blind PLAAF planners; American cyberattackers could disable Beijing’s command networks.

Email | Print | Permalink | Comments | Share

Alex Frangos reports that in a contest between Chinese and Indian consumers and businesses over who cares more about the environment, China wins:

Among consumers, 94% of Chinese say they will pay more for products that are certified as green, meaning they have some sort of energy or health and safety benefit. In India, it’s 72%, as it is in Singapore as well.

Businesses in China seem more attuned to marketing green products. Three out of five Chinese businesses think their customers will pay more for green products, while in India and Singapore, that percentage is 35%. Among Chinese food and beverage companies, 67% claim they trade or produce green products, compared to 16% in India. Clothing and footwear makers and sellers, it’s 41% versus 30% in India.

(AP Photo)

Email | Print | Permalink | Comments | Share

Richard Weitz argues in the Diplomat that the Obama administration's approach to China is much like the Clinton administration's approach to Russia:

Yet these policies should be seen less as an effort to contain China and more as a return to the kind of shaping and hedging policies that the Bill Clinton administration pursued on many security issues, especially relations with Russia. The principle behind this approach is that it will help shape the targeted actor’s choices so that it will pursue policies helpful to the United States and its allies. In the case of China, these policies would include not threatening to use force against other countries, moderating its trade and climate polices and generally embracing and supporting the existing international institutions and the global status quo. On the flip side, if these shaping policies fail, then the United States aims to be in a good position, thanks to its strategic hedging, to resist disruptive Chinese policies until China abandons them.

I don't think the two circumstances are really analogous. Clinton was able to "shape" Russia's choices regarding its immediate security environment because Russia was very weak and consumed with internal problems and the U.S. was not. And the end result of American policy toward Russia through the Clinton administration and into the Bush era was a sharp deterioration in relations between the two countries (a deterioration for which both nations share blame) and a war between Russia and her neighbor - not exactly an ideal we should be shooting for with China.

Furthermore, Weitz argues that the U.S. should try to shape China's choices to avoid a "destabilizing" arms race in Asia. But it's too late - arms purchases in Asia are on the rise and probably won't decline for some time. So has it destabilized Asia? Not yet and when you consider the environment, would Weitz prefer that all of China's neighbors were poorly armed and unable to defend themselves? It seems to me that that's an environment ripe for destabilization and Chinese adventurism. An Asia that's armed to the teeth is one in which China is not invading anyone.

(AP Photo)

Email | Print | Permalink | Comments | Share

Gordon Chang thinks the Chinese military is suicidal:

Why be concerned with WikiLeaks when the secretary of defense is rushing to give sensitive information to the only great power preparing to kill Americans? The justification for doing so is that the Chinese will reciprocate. Yet they have in fact not responded in kind after years of essentially one-way transfers of information and know-how from the United States to China, and Gates on this trip will not see any military facility not previously opened to U.S. officials....

The Chinese interpret Gates’s offers of cooperation as signs of weakness. He is, in their view, the representative of a power in terminal decline, a country that will soon be so weak it will not be able to resist Chinese advances in the region. Comments early last year to the effect that Beijing can use its holding of American debt to punish the United States reveal the mentality of senior PLA officers.

China’s generals and admirals are wrong in every respect, but the important point is that we are oblivious to what they are thinking. Gates needs to recognize that Beijing is configuring its military to fight the United States, that its senior officers do not fear war, and that they think they can win one. To not recognize facts is reckless—and something that has led to every great tragedy involving Americans.

You have to assume that China's generals also think about the enormous stockpile of American nuclear weapons, long range bombers, submarines and inter-continental ballistic missiles - weapons that, collectively, could obliterate large swathes of their country.

No one should ever discount the possibility that nations can embrace a suicidal irrationality from time to time, but nothing in China's recent behavior suggests that the country wants to fight a war with the United States.

(AP Photo)

Email | Print | Permalink | Comments | Share

According to a recent poll, only 12 percent of respondents in China said their country was a world superpower:

Looking at relations with Japan, over half of the participants said the ties were unlikely to deteriorate in 2011.

Over 80 % of the participants also expressed concerns about Western intentions to contain China's development, with about 40 % calling for countermeasures to be taken against threats to China.

Among the issues of greatest concern, US intentions to strategically contain China placed ahead of trade disputes as the most important bilateral issue in 2010.

Ties with Washington were deemed as the most significant bilateral relationship for China for the fifth consecutive year.

Email | Print | Permalink | Comments | Share

A new report on human rights from the risk consulting firm Maplecroft finds backsliding in China:

Most significantly for business, given it plays a major role in supply chains, China has fallen two places in the ranking from last year to 10th. China joins DR Congo (1), Somalia (2), Pakistan (3), Sudan (4), Myanmar (5), Chad (6), Afghanistan (7), Zimbabwe (8), and North Korea (9) as the countries with the worst human rights records.

Russia (14), Colombia (15), Bangladesh (16), Nigeria (17) India (21), Philippines (25) and Mexico (26) have also seen their scores worsen and are featured in the ‘extreme risk’ category.

Interestingly, the report also singles out India for criticism:

India, which is important to the ICT, manufacturing and agriculture sectors, performs particularly badly in the area of labour rights protections. It is ranked joint first for child labour, forced labour and discrimination and 7th for trafficking, which includes the use of girls in bonded labour and sexual exploitation. Estimates of the number of child labourers varied widely. The government's 2004 national survey estimated the number of working children from aged 5-14 at 16.4 million. NGOs, however, claimed the number of child labourers was closer to 55 million.

Email | Print | Permalink | Comments | Share

China announced yesterday that it would cut its rare earth mineral export quota in 2011, following steep reductions in 2010. While the move is sure to deliver some short-term pain to industries in Asia, Europe and the U.S., it has been a boon for Australia:

Australia's emerging rare earths producers and explorers are enjoying a year-end surge in value thanks to China's latest move to limit supplies from its dominant industry to the rest of the world....

According to the US Geological Survey, rare earths are relatively common within Earth's crust but, because of their geochemical properties, are not often found in economically exploitable concentrations. It said new mines in Australia, the resumption of a big mine in the US, and the possible development of other deposits there and in Canada ''could help meet increasing demand''.

As Ian MacKinnon reports, the international scramble to shore up new sources of supply is creating some uncomfortable bedfellows - such as a tie-up between South Korea and Burma.

Email | Print | Permalink | Comments | Share

They just might be, if this report from John Pomfret is any indication:

After years of trying, Chinese engineers still can't make a reliable engine for a military plane.

The country's demands for weapons systems go much further. Chinese officials last month told Russian Defense Minister Anatoly E. Serdyukov that they may resume buying major Russian weapons systems after a several-year break. On their wish list are the Su-35 fighter, for a planned Chinese aircraft carrier; IL-476 military transport planes; IL-478 air refueling tankers and the S-400 air defense system, according to Russian news reports and weapons experts.

This persistent dependence on Russian arms suppliers demonstrates a central truth about the Chinese military: The bluster about the emergence of a superpower is undermined by national defense industries that can't produce what China needs. Although the United States is making changes in response to China's growing military power, experts and officials believe it will be years, if not decades, before China will be able to produce a much-feared ballistic missile capable of striking a warship or overcome weaknesses that keep it from projecting power far from its shores.

The report also pours some serious cold water on China's vaunted "anti-ship" missile:

But the challenge for China is that an anti-ship ballistic missile is extremely hard to make. The Russians worked on one for decades and failed. The United States never tried, preferring to rely on cruise missiles and attack submarines to do the job of threatening an opposing navy.

U.S. satellites would detect an ASBM as soon as it was launched, providing a carrier enough warning to move several miles before the missile could reach its target. To hit a moving carrier, a U.S. government weapons specialist said, China's targeting systems would have to be "better than world-class."

Email | Print | Permalink | Comments | Share

One argument made by proponents of the U.S. foreign policy status quo is that absent a strong American presence in key regions of the world, democratic allies will wilt under the oppressive influence of autocratic powers. But if we have learned anything in 2010 is that precisely the opposite happens, at least in Asia. China's "assertive" behavior hasn't precipitated a bout of regional appeasement but has instead catalyzed regional states to bulk up their defenses. As Barbara Demick reports:

Chinese behavior in the South China Sea has reversed the alliances of the Vietnam War, with Hanoi now edging toward the United States as it seeks protection. Vietnam is investing in submarines and long-range combat aircraft because of dozens of incidents over the last year in which Chinese vessels have harassed its fishing and oil ships. China's territorial claim to 1 million square miles of the sea has also unnerved Malaysia, Indonesia and Singapore, pushing them closer to the U.S.

Japan, too, recently announced that its new defense strategy will not entail becoming a satellite state of communist China but instead will be revamped to reflect China's emergence. Arms purchases in Asia are on the rise.

None of this is to suggest that the U.S. should "disengage" from Asia. But it is a telling reminder that if the U.S. were to disengage from, say, Europe, the result wouldn't be the collapse of Western Civilization.

Email | Print | Permalink | Comments | Share

A new poll finds that a majority of Japanese and Americans do not trust China:

The Gallup poll published Wednesday by the Yomiuri Shimbun was conducted among 1022 Japanese and 1002 Americans and showed that 87 percent of Japanese and 65 percent of Americans do not trust China....

The poll found that Japanese people feel relations between Japan and the U.S. have been worsening due to the planned relocation of U.S. base in Okinawa. Some 40 percent of Japanese respondents said bilateral relations deteriorated, up from 26 percent last year. In contrast, the proportion of those who thought the two countries are on good terms fell from 48 percent last year to 33 percent this year.

Asked about the reasons, 79 percent of Japanese cited complications caused by the relocation plan.

Email | Print | Permalink | Comments | Share

Thomas Barnett reposts maps produced by the Center for Strategic and Budgetary Assessment detailing all the areas inside China that the U.S. would want to bomb in the event of hostilities over Taiwan. Barnett:

If somebody publishes maps of the U.S. delineating all the places they'd want to bomb on the first day of the war . . . I'd take that kinda personally. No, I'm not naive enough to believe the Chinese don't have theirs. But it takes a certain chutzpah to publish yours so openly while decrying Chinese "provocations" and "throwing their weight around." China hasn't waged war in a very long time. The U.S. does so regularly. Whose maps should we take more seriously?

This gets to the nub of one of the odder complaints the Pentagon makes about China's military build-up - its "lack of transparency." Would we feel better about China if they came out and said, ala the U.S., that they're developing their military capability so that they can blow up our carrier battle groups?

Email | Print | Permalink | Comments | Share

The U.S. faces a series of tough choices with respect to handling a rising China. For decades, American strategy has been predicated on the belief that no one power (besides itself) can be in a position to dominate a strategic region of the world. This principle is challenged by China, which has enjoyed booming economic growth and is slowly but steadily building a military that can defend a range of interests further from its territory. China's continued economic growth is not inevitable, but if it does continue to clip along at a healthy pace, it will be harder and harder for a strapped U.S. to sustain its dominance in Asia - especially if it is expected to maintain supremacy elsewhere in the world.

So what to do? One suggestion comes in the form of a new report from the American Enterprise Institute titled Security in the Indo-Pacific Commons. In it, author Michael Auslin argues for boosting America's forward deployment of military forces, followed by an effort to improve cooperation with China's neighbors.

It's a long report and well worth a read, and a blog isn't the best forum to grapple with it in its entirety, but I would like to raise a few questions: if we find China's military modernization troublesome and the impetus to enhance American forces in the region along with creating 'concentric triangles' of allies around the country, why wouldn't China view America's triangular, militarized containment as equally troubling, and equally worthy of response? Why would an aspiring great power trust a putative rival to keep open the 'commons' it traverses for its own trade, particularly when that rival embarks on a strategy to sustain overt dominance of said commons? The U.S. would not be similarly trusting.

I think we can all agree on the need to sustain a favorable balance of power in Asia. The question centers on how to best manage that. To that end there's less focus in the report on China's strategic aims and interests, outside of noting China's desire to build a military capable of offsetting America's strengths. It's important to monitor China's military, but isn't it equally important to understand what China's perceived interests are and whether or not the U.S. can live in a world where China takes on a greater role 'policing the commons'?

It may be impossible to strike an adequate balance between America's legitimate interest in sustaining an open Indo-Pacific region and China's legitimate interest not to be militarily hemmed in and reliant on an outside power to protect its own vital sea lanes, but it seems incumbent upon us to try and find one.

Email | Print | Permalink | Comments | Share

It's over a giant robot statue:

Sotsu Co. is investigating whether a Chinese amusement park copied the design of a large statue of the Gundam robot, first built in Japan last year to resemble the huge fighting machines in the legendary Japanese anime series “Mobile Suit Gundam.”

The Tokyo-based company, which manages the copyrights to the comic series, said it started looking into the matter after an outsider alerted the company about the statue last week. The company hasn’t been in direct contact with Floraland, the Chengdu-based amusement park in question, according to a company spokeswoman.

You can view photos of the robot in question here.

Email | Print | Permalink | Comments | Share

According to a report in the Asahi Shimbum:

A record 77.8 percent of respondents to a government survey at the end of October, at the height of the fallout from the Senkaku Islands dispute, said they did not "feel close" to Japan's giant neighbor.

That marked a sharp 19.3 percentage points increase over a year earlier and was the worst figure since 1978, when the Cabinet Office survey began.

The number of Japanese who did not feel the bilateral relationship was good rose 33.4 points to 88.6 percent.

The survey results mark a new high in negative feelings toward China over the last two decades. Throughout most of the 1980s, about 70 percent of Japanese respondents to the survey said they felt close to China.

Email | Print | Permalink | Comments | Share

Elizabeth Economy wants to dial back the "China dominance" rhetoric:

The United States is in an economic mess, and it is tempting to see China behind every door. This is a mistake on two fronts. First, as China’s economy and military grow, its policies will certainly matter to the United States more and more; but let’s take our time to understand precisely how and why before we raise alarm bells on every front. Second, and even more important, seeing China everywhere enables us to avoid looking in the mirror — which is where we really ought to be focused in order to fix our problems.

Unfortunately, I think Economy's going to be disappointed. There is a time-honored tendency in politics (and not just American politics) to locate the source of blame for a nation's ills beyond its borders. Why on Earth would a politician blame his or her constituents for something when a more convenient scapegoat lies within reach? China makes an attractive target (and often a legitimate one) for American complaints.

There is also a very strong belief in U.S. national security circles that America must maintain hegemony in Asia, a belief that puts the U.S. on a collision course with a rising China. The alarm bells that Economy fears are drowning out rational discussion are only going to get louder the more China does things like announce it's building an aircraft carrier.

Email | Print | Permalink | Comments | Share

Thomas Friedman asks what it would look like if WikiLeaks poached China's secrets. He does it to set up a faux cable highlighting America's domestic shortcoming, but it's a question I had been asking myself after reading Glenn Greenwald's defense of the organization:

Ultimately, WikiLeaks' real goal appears to me to be anti-authoritarian at its core: to prevent the world's most powerful factions from operating in the dark.

So has WikiLeaks targeted authoritarian powers like China or Russia? The WikiLeaks Wikipedia page says that one of its founders was a Chinese dissident so it's possible they've been poaching secrets from China, Russia and other authoritarian powers, but clearly not with the intensity that they've gone after the U.S. Or maybe they just have not had the good fortune (in their view) to hook up with the Chinese or Russian equivalent of a Bradley Manning, the alleged source of their U.S. material. But this just belies Greenwald's assertion about the organization's "anti-authoritarian" posture - real authoritarian states don't cough up their secrets that easily and truly "anti-authoritarian" organizations just don't scoop up the low-hanging fruit from flawed democracies and call it a day.

Then again, it's not clear that Greenwald has an accurate sense of international media freedom. He writes in a different post on WikiLeaks:

Simply put, there are few countries in the world with citizenries and especially media outlets more devoted to serving, protecting and venerating government authorities than the U.S.

Obviously this is just hyperbole. But still:

Of the 196 countries and territories assessed during calendar year 2009, 69 (35 percent) were rated Free, 64 (33 percent) were rated Partly Free, and 63 (32 percent) were rated Not Free. This represents a move toward the center compared with the survey covering 2008, which featured 70 Free, 61 Partly Free, and 64 Not Free countries and territories.

The survey found that only 16 percent of the world’s inhabitants live in countries with a Free press, while 44 percent have a Partly Free press and 40 percent live in Not Free environments.

The U.S. media can be servile, corrupt and biased but the idea that there are few other countries in the world whose media is more subservient to government power than America ignores a rather huge swath of world media that is actually run by the state.

(AP Photo)

Email | Print | Permalink | Comments | Share

There's been a good deal of "nothing to see here" world weariness among commentators assessing the WikiLeaks document dump. But this seems rather significant to me:

Senior Chinese officials have said the Korean peninsula should be reunified under Seoul's control, according to leaked classified US diplomatic cables.

They are said to have told an ex-South Korean minister China placed little value on the North as a buffer state....

Mr Chun said the Chinese officials "were ready to 'face the new reality' that the DPRK [Democratic People's Republic of Korea] now had little value to China as a buffer state - a view that since North Korea's 2006 nuclear test had reportedly gained traction among senior PRC [People's Republic of China] leaders."

"Chun argued that in the event of a North Korean collapse, China would clearly 'not welcome' any US military presence north of the DMZ [Demilitarised Zone]," the ambassador's message said.

"The PRC would be comfortable with a reunified Korea controlled by Seoul and anchored to the United States in a 'benign alliance' - as long as Korea was not hostile towards China," it added.

This is also a pretty interesting case for the utility of secrecy: is it better, or worse, from a U.S. standpoint, that the North Koreans hear about this?

Update: Drezner says not so fast:

I don't doubt that Chinese officials said everything reported in the documents. I do doubt that those statements mean that China is willing to walk away from North Korea. It means that Chinese diplomats are... er.... diplomatic. They will tell U.S. and South Korean officials some of what they want to hear. I'm sure that they will say somewhat different things to their North Korean counterparts.

The key is to determine whether China's actions reflect their words. And over the past six months, China has not acted in a manner consistent with Tisdall's claims.

Fair point, although I do think that China's tipping of the hat that they would be OK with a reunified peninsula still bound to the U.S. military is a significant move - although it's obviously unclear how widely that view is shared within China.

Email | Print | Permalink | Comments | Share

Writing in the Financial Times Zbigniew Brzezinski offers some advice to President Obama:

The president has to take the initiative. Provocation of this kind cannot be dismissed lightly or left in the hands of diplomats. He should call President Lee Myung-bak of South Korea to reassure him personally and directly of US support. Then he should call President Hu Jintao of China and express serious concern. He should call Prime Minister Naoto Kan of Japan, as America’s prime ally in the Pacific and given its proximity to the Korean conundrum. He should also call President Dmitry Medvedev of Russia. Hillary Clinton, US secretary of state, should then follow up on these calls and set in motion convening the United Nations Security Council.

Reaching out to China and the relevant players here is a good idea, but there's a danger in taking "presidential ownership" of a problem of this kind. Like the Israeli-Palestinian conflict, which the president is currently struggling with, it is unsolvable.

(AP Photo)

Email | Print | Permalink | Comments | Share

Not so much:

China’s influence is rising steadily around the world. But the problem of how to manage its Communist neighbor and one-time ally appears to befuddle China’s leaders, who stumble from indulging the North to sending occasional signals of pique, all without making the country adopt a path toward greater openness or stability.

“At the moment China has limited influence,” Cai Jian, a professor of Korean studies at Fudan University, said in a telephone interview. “On one hand it’s unhappy with North Korean actions and its provocative behavior, but on the other hand it still has to support North Korea.”

It's possible for China to really pressure the North by cutting off aid, but, as Jian notes, fears of a refugee flood and the prospect of an American military presence directly on their border has thus far stayed China's hand.

Email | Print | Permalink | Comments | Share

The language of environmental diplomacy:

Air pollution in Beijing was so bad Friday that the U.S. Embassy, which has been independently monitoring air quality, ran out of conventional adjectives to describe it, at one point saying it was "crazy bad."

The embassy later deleted the phrase, saying it was an "incorrect" description and adding that it was working to revise the language to use when the air quality index goes above its highest point of 500, which means the air is considered hazardous for all people by U.S. standards.

Email | Print | Permalink | Comments | Share

Be careful what you tweet in China:

Amnesty International today urged the Chinese authorities to release a woman sentenced to a year in a labour camp for retweeting a supposedly anti-Japanese message.

Chinese online activist Cheng Jianping was sentenced to one year of ‘Re-education Through Labour’ on Monday for “disturbing social order”, having retweeted a satirical suggestion on October 17 that the Japanese Pavilion at the Shanghai Expo be attacked.

Email | Print | Permalink | Comments | Share

In the LA Times, David Schenker & Chirstina Lin argue that we should be concerned about China's relationships in the Middle East:

Given China's extensive presence throughout the world — attributable at least in part to the fact that its foreign policy is devoid of moral concerns — it is unrealistic to expect that Washington could have somehow excluded Beijing from the Middle East. Indeed, the very absence of considerations other than national interest makes China an appealing partner to states in a region where authoritarianism is rife. Some Mideast states also likely view China as useful counterbalance against the West.

That first sentence is odd, no? If China's growing global role is at least partly attributable to a lack of "moral concerns" what do the authors think about the considerably larger U.S. global role? They continue:

What is of concern, however, is that the rapid rate of Chinese progress occurs amid a growing regional perception that the United States is withdrawing from the Middle East.

Although China holds a significant portion of U.S. debt, and trade relations are strong, at the end of the day the two nations are competitors — both strategic and economic — with profoundly differing worldviews. It may be that this great game will end with Washington and Beijing as allies. More likely, though, a modus vivendi will emerge between the two powers. Until then, Washington should work to strengthen its remaining regional allies and reestablish a presence in the region.

Unfortunately the piece ends there, so it's not clear what's entailed by "reestablishing" a presence (add more military bases, reoccupy Iraq?). It's also a bit ironic, given how the authors castigate China for being "devoid of moral concerns" in its foreign policy to then urge the U.S. to reinforce ties with "regional allies" in the Middle East. Those allies, with the exception of Israel, are uniformly autocratic, when they're not tyrannical. Of course, we can't boost ties with democratic Turkey because the authors spend the beginning of the piece bashing "Islamist" Turkey for partnering with China.

The more important question is why, exactly, we should worry about what China's doing in the Middle East. The authors advance the idea that the U.S. and China are competitors, so presumably we would guard our position in the Middle East to exercise some kind of leverage over China. But in reality, it doesn't work that way. We're the ones begging Beijing to sign onto our sanctions against countries in the region. If push came to shove, the U.S. could halt or massively disrupt oil shipments from the Middle East - but that would not only hurt China but every oil-importing country in Asia and beyond.

It seems to me that China has a logical strategy with respect to the Middle East - let the U.S. pick up the cost of stationing forces in the region and exhaust itself waging various wars and hatching clever "containment" schemes to manage this or that political actor it disapproves of while China makes deals and gets access to needed energy resources.

Email | Print | Permalink | Comments | Share

The Wall Street Journal takes an in depth look at how "state capitalism" works in China:

Central to China's approach are policies that champion state-owned firms and other so-called national champions, seek aggressively to obtain advanced technology, and manage its exchange rate to benefit exporters. It leverages state control of the financial system to channel low-cost capital to domestic industries—and to resource-rich foreign nations whose oil and minerals China needs to maintain rapid growth.

China's policies are partly a product of its unique status: a developing country that is also a rising superpower. Its leaders don't assume the market is preeminent. Rather, they see state power as essential to maintaining stability and growth, and thereby ensuring continued Communist Party rule.

The article notes that Japan pursued a similar strategy during its economic ascendancy, so it's too soon to worry that the sky is falling. If Chinese growth stalls (and you have to imagine at some point it will), they may be forced to rethink some elements of "state capitalism."

(AP Photo)

Email | Print | Permalink | Comments | Share

David Axe gives us a glimpse of the AirSea Battle concept:

It seems AirSea Battle mostly involves better communications and command procedures for integrating ships and planes into the same task forces. But there’s at least one new piece of hardware: a new, more deadly anti-ship missile. On Wednesday, the Defense Advanced Research Projects Agency awarded Lockheed Martin a 3-year, $160 million contract to develop the Long-Range Anti-Ship Missile. The goal is for LRASM to give Navy ships “the ability to attack important enemy ships outside the ranges of the enemy’s ability to respond with anti-ship missiles of their own.”

LRASM must fit into the Navy’s existing vertical-launch cells and should rely less on “off-board” targeting — drones, planes, satellites — than current weapons. In other words, the LRASM must have its own, smart sensors. That would allow even isolated or electronically-jammed American ships to sink enemy vessels.

It's good to see the Department of Defense finding inspiration in old Atari games. More, in a serious vein, here.

(AP Photo)

Email | Print | Permalink | Comments | Share

The Conference Board's Global Economic Outlook claims that the "emerging markets" are going to be the drivers of global economic growth through 2010. At such time, the Board says that China may have a larger GDP than the U.S. in terms of purchasing power parity (PPP) by 2020.

Through 2015, the Conference Board expects U.S. GDP to putter along at 1.8 percent growth while China hums along at 9.2 and India follows behind at 8.3. The Board sees China's growth rates cooling a bit on the back-end of the forecast: down to 8.6, while both the U.S. and India make growth gains. Meanwhile, in Europe

In short, the Board argues that "we are seeing unprecedented shifts in the distribution of global output."

Derek Scissors says we should be skeptical of these numbers because the price of goods in China is likely to increase, which would impact the PPP comparisons considerably.

(AP Photo)

Email | Print | Permalink | Comments | Share

A new poll finds that about a third of Chinese think China should use force to back up its territorial claims in Asia:

The Global Times newspaper said more than 90 percent of the Chinese responding to the poll are concerned about territorial disputes between China and Japan and Southeast Asian countries but do not view the issue as a national priority.

A vast majority of the respondents, 76.3 percent, reject the idea of the United States acting as a mediator in China's territorial disputes and 40 percent suspect Washington is instigating an "anti-China alliance" over the territorial issues....

The poll results show that 39.8 percent of the respondents believe China should fight for its territorial claims, while 35.3 percent favor "putting disputes aside and developing (the islands) jointly while insisting on our sovereignty," the newspaper said.

The Global Times is affiliated with the official Communist party newspaper, the People's Daily so caveat emptor on the poll results.

(AP Photo)

Email | Print | Permalink | Comments | Share

Alvin Felzenberg and Alexander Gray make the case for bolstering the U.S. Navy to contain China:

Actions such as these suggest that the people formulating current U.S. military posture may have forgotten a vital lesson of the Cold War: that perception can often be just as important as reality. It was America’s unprecedented investments in rebuilding and protecting Western Europe through the Marshall Plan and deterring an outside threat against it through NATO that demonstrated to the Soviet Union America’s commitment to defending the West against aggression. But for the perception that the U.S. was willing to go to war to protect democratic countries on that continent, the history of the last half-century would have been the story of either the loss of freedom through accommodation to Soviet aggression, or war.

The trouble with this version of Cold War history is that it leaves out a rather important fact: the U.S. fought two massive wars - at a cost of over 100,000 lives - to sustain the "perception" that we were willing to stand up to Soviet Communism. Are the authors suggesting that the U.S. embark on similar endeavors to impress upon the Chinese leadership our seriousness?

They continue:

Absent an overwhelming superiority in naval strength to back up trade and other negotiated agreements, President Obama’s efforts to re-engage in Asia will be worthless. China respects power and will adjust its foreign policy to the realization that the interests of America and its allies are both immutable and capable of being defended. That is the true path to an enduring peace.

I think it's correct for the U.S. to sustain a good deal of military power in Asia, of which the Navy plays a huge role. But this kind of advice really, really falls apart without a clear definition as to the American interests that are supposed to be "immutable." It's particularly important to spell out which of our allies' interests we are expected to treat as immutable and worthy of dying for.

(AP Photo)

Email | Print | Permalink | Comments | Share

1) Go to Google Maps.

2) Click on 'get directions.'

3) Type in 'Japan' as the start location.

4) Type in 'China' as the end location.

5) Go to direction #43.

6) Laugh, dammit!

Email | Print | Permalink | Comments | Share

Forbes has a list of their choices for the Most Powerful People on Earth. The list is capped at the top 68. Coming in at number one is China's President Hu Jintao (Obama is number two). Coming in at 68, Julian Assange, the creator of WikiLeaks.

(AP Photo)

Email | Print | Permalink | Comments | Share

After linking to a rather gruesome story of Chinese human rights violations, Jay Nordlinger writes:

Meanwhile, remember that the policy of the entire world — with the exception of the Norwegian Nobel Committee, oddly — is never, ever, ever to cause the dictatorship in Beijing the slightest discomfort, ever.

Obviously, this is hyperbole, but it's wrong nonetheless. Nations may be wary about wading into China's domestic politics, but they're not interested in making the world an overly comfortable place for Beijing.

Email | Print | Permalink | Comments | Share

While her husband and many of her administration colleagues are out on the campaign trail, Secretary of State Hillary Clinton is on the other side of the world on Monday, beginning a three day visit to Malaysia - the first bilateral visit to the nation in fifteen years.

A number of issues will be on the table during her time there - not the least of which, of course, is China and America's interests in the region in the wake of the ASEAN summit. Clinton has specifically denied to the local press that the U.S. seeks to "contain" China, but it never hurts to reach certain understandings.

Besides the normal security discussions, economic interests will also be a prominent concern. As the Wall Street Journal recently noted, the rebounding export market and domestic consumption have outpaced expectations, and the key now is to reinvigorate private investment - which Malaysia can probably attract via continued transparency reforms, anti-corruption efforts and moving the oft-cited affirmative action policies toward a merit-based solution. Attracting more private investment doesn't require these steps, but they'd grease the skids.

Yet Clinton's visit also brings up a broader signal as well as a need for engagement in the context of more long-term interests. Robert Kaplan raised a similar issue in a Los Angeles Times piece last week concerning the effects on Islam of market globalization:

Yet this new, postmodern Islam with a hard Middle Eastern edge is ramming up against another import: the glitzy materialism that in Malaysia and Indonesia is associated with nominally communist China. This is the real "clash of civilizations" going on. Americans thought they owned the face of global capitalism after the collapse of the Berlin Wall; it turns out that in Islamic East Asia, the Chinese do. Ethnic Chinese own many of the spanking new malls packed with Louis Vuitton, Versace and other designer stores, the places to observe women in the most fashionable silk jilbabs and the most revealing, sophisticated dress. In Muslim Southeast Asia, modesty often stops at the neck.

Malaysia's path as a developing nation is one that seems all the more important in the context of the continued clash around the world concerning our views on radical Muslims and the pursuit of true moderates. The recent arrest of the would-be Metro bomber in Northern Virginia, the UPS plane bomb threat and other incidents are all present in the minds of many American voters this week. That is, sad to say, the face of Islam for many Americans.

If U.S. engagement with moderate Islam is to have a future, that future may well be in Malaysia and other pockets of the Muslim world that have turned to embrace global capitalism. And if the face of Islam in America is going to become more moderate and approachable, then I suspect it will take more than just bilateral talks once every decade and a half.

(AP Photo)

Email | Print | Permalink | Comments | Share

Not only has China now built the world's fastest supercomputer, surpassing a U.S.-built machine, they're also looking to surpass the U.S. in space:

It's too early to call it a race, says Henry Hertzfeld, research professor of space policy and international affairs in the Space Policy Institute at George Washington University. But China's Martian orbiter may indicate a second destination for the country's space program.... Hertzfeld nevertheless cautioned that the differences between the 1960s and the 21st century make for a very different competitive landscape. There are more countries now with space capabilities and access to space; there is much more cooperation among nations; and the costs are astronomical.

"I think it's too early to tell if we will engage in a true 'race' to Mars as we did with the USSR to the moon," he said.
But the official messages from governments seem to tell a different story, with the U.S., India, China, and Russia all declaring that they hope to reach Mars at around the same time.

I would be really surprised if we get a replay of the Cold War-era space race. As America's own space program demonstrated, there's a real difference between space exploration as a bauble of Great Power status (the moon landings) and any kind of strategic, long-term space program. Landing people on Mars just to prove you can do it is a ridiculous waste of money absent a serious strategic vision.

Email | Print | Permalink | Comments | Share

Investors Business Daily is outraged that Russia is helping Venezuela develop nuclear technology, demanding that someone remind Russia of the Monroe Doctrine.

Unfortunately, the U.S. doesn't have any leg to stand on with respect to the Monroe Doctrine given how it's become a bi-partisan staple of foreign policy establishment dogma that the U.S. does not recognize "spheres of influence." It would be self-evidently absurd for the U.S. to protest Russia's dalliances in Venezuela (a little under 2,000 miles from the U.S. border) when the U.S. is pushing to admit countries that border Russia into NATO.

That said, should we be dusting off the concept of 'spheres of influence' in an era of emerging great powers? Ted Galen Carpenter argues that we should:

Russia needs to find a graceful way out of its increasingly cozy relationship with Chavez, and the United States needs to stop talking about deploying missile defenses or expanding NATO eastward. Washington and Moscow must acknowledge that the concept of spheres of influence is alive and well, and that gratuitous violations of that concept will negate any prospect for a reset in relations.

U.S. leaders must also comprehend that cordial relations with China require a willingness to accept that East Asia’s rapidly rising great power will seek to establish a sphere of influence in its neighborhood. Beijing’s expansive territorial claims in the South China Sea and the recent spat with Japan over disputed islets in another body of water are signs of that process. China’s growing power and assertiveness means that the United States will need to tread softly regarding such territorial disputes, as well as the even more sensitive Taiwan issue, if Washington wants to avoid nasty confrontations with Beijing.

While I think avoiding nasty confrontations should be a key goal, I'm not sure how affording China a 'sphere of influence' would work in practice. China's prospective 'sphere' encompasses major economic powerhouses like Japan, Taiwan and South Korea, and some weaker Southeast Asian states. Unlike, say, Russia, where the U.S. ties to countries like Georgia or even Ukraine were historically relatively weak and economically negligible, American ties to Japan and South Korea are anything but.

(AP Photo)

Email | Print | Permalink | Comments | Share

An interesting development on the China rare earths front (who ever thought that geology could be so exciting). The New York Times is reporting that China is now blocking rare earth shipments to the U.S. and Europe:

“The embargo is expanding” beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities.

They said Chinese customs officials imposed the broader restrictions on Monday morning, hours after a top Chinese official summoned international news media Sunday night to denounce United States trade actions.

This is ultimately going to prove self-defeating for China, but it will prove very lucrative for anyone in the U.S. mining industry. Relatedly, I wonder what this action does to the "responsible stakeholder" view of a rising China.

(AP Photo)

Email | Print | Permalink | Comments | Share

According to the Broadband Forum, there are just shy of 500 million broadband subscribers worldwide:

China, the powerhouse of global broadband in the 21st century so far, was responsible for 43 percent of all net broadband lines added in Q2 and performed far better than the same quarter in 2009 (China includes Mainland China, Hong Kong & Macau). In Western Europe, many markets did better than the equivalent 2009 quarter. Germany, the UK, Italy, Spain, the Netherlands, Poland and Turkey, amongst others, all reported strong numbers. Central and South American markets have cooled to an extent, but many are still reporting good quarterly growth (of 5-7 percent). However, the US and in particular Canada, broadband growth has significantly slowed, affected by the end of housing stimulus packages. In Canada's case, the market slowed to levels not seen for a decade.

(AP Photo)

Email | Print | Permalink | Comments | Share

I'm not going to pretend to be an expert on the foreign policy of Imperial Britain in the 19th and early 20th centuries, but what little I know of it makes me dubious of this argument from Thomas Barnett and, by extension, Robert Kaplan:

Where do Afghanistan and Pakistan fit into this "new Great Game," as Kaplan dubs it? They stand between, on the one hand, India and China and, on the other, all the energy that pair of rising behemoths needs to access in the Persian Gulf and Central Asia. So the current effort in Afghanistan is not a case of America imposing globalization's connectivity on places where it was never meant to go. Instead, it represents -- like in Iraq -- another situation where the U.S. is making dangerous places just safe enough for Asian powers to access much-needed energy and mineral resources.

As I understood it, Britain waged its "Great Game" against Russia for influence in Central Asia and the outskirts of the Ottaman Empire because Britain wanted to protect the trade routes it had between England and India. In other words, there was a clear strategic rationale for why Britain played the Great Game and the aim was to benefit Britain. Barnett argues that the U.S. should continue nation building in Afghanistan on behalf of India and China. But what's in it for the United States?

Barnett argues that we'd be a "stabilizer" between two rising powers, but one has to wonder how much of a role Western troops fighting and dying in Afghanistan should really play in that balancing effort.

Email | Print | Permalink | Comments | Share

There's an interesting experiment playing out now with China and its rare earth mineral monopoly that holds lessons for the U.S. in the Middle East. Three weeks ago, China began withholding shipments of rare earth minerals to Japan in response to Japan's detention of a Chinese fishing crew operating in disputed waters. This mineral embargo strikes a direct blow at many of the electronic industries in Japan that rely on these minerals for products such as batteries in hybrid cars.

Japan finally relented and released the sailors, and later their captain, in what looked like a capitulation in the face of China's "resource weapon." Whether this is the case or not, I think over the long term China's actions have actually undercut this gambit. It will almost certainly spur other nations with their own rare earths resources (which, according to the Times, aren't actually that rare) to begin, or in the case of the U.S., resume, mining operations to break China's near monopoly.

The lesson here for the Middle East is obvious. For years there's been a fear of an "oil weapon" or worries that a hegemonic power (first Iraq, now Iran) could "take over the world's oil supply" and wield it to our detriment. But there's a reason that the Arab world has only used the so-called "oil weapon" once - it doesn't work. No matter how painful the initial blow, the effect is short-term. Over the long term, the consuming states devise alternatives. But in the case of producing states, there is no alternative. Unlike China, most of the oil-producing states in the Gulf don't have a diversified industrial base. If they can't export oil, they can't eat.

(AP Photo)

Email | Print | Permalink | Comments | Share

In Vietnam, Defense Secretary Robert Gates stated the administration's position on Asia:

On Tuesday, Gates echoed recent statements by Secretary of State Hillary Rodham Clinton that the United States would not take sides on competing Asian territorial claims but would insist on open access to international waters and shipping lanes.

"The United States has always exercised our rights and supported the rights of others to transit through, and operate in, international waters," Gates said. "This will not change."

Washington's stance has irked Beijing, and Chinese leaders have told the Obama administration to butt out of what it sees as local disputes.

On the one hand, I think the U.S. position is the correct one with respect to navigating international waters, particularly given the amount of commerce that passes through Asia. On the other, it's worth remembering that with defense partnerships with Japan and budding relationships with other Asian states like Vietnam, we're taking defacto positions on these territorial disputes - against China.

It's also odd to hear the U.S. lecture China on what it can and cannot declare as a core interest. The U.S. takes a much more expansive view of its "core interests" than any other country on the planet, including China, so it's little wonder that our insistences with respect to the South China Sea grate on the ears of the Chinese military.

(AP Photo)

Email | Print | Permalink | Comments | Share

Nic Maclellan shows how France's colonial holdings give it the third largest exclusive economic zone (defined as water out to 200 nautical miles from the coast over which a country has special rights over the exploitation of natural resources) in the world.

This in response to a very pertinent question:

Does any other country successfully claim an expanse of blue ocean so distant from its land mass? Are there any such precedents, or is China pushing totally unrecognized definitions here?

Let's start with some easy examples, where a body of water is nearly enclosed by a territory (a 'lake' if you will). Doesn't the US virtually control the Gulf of Mexico? If there's an oil rig more than 200km from the US coast, is that in international waters? If so, who, if anyone, agrees on the oilfield's boundaries and the terms of the lease?

(AP Photo)

Email | Print | Permalink | Comments | Share

Thomas Barnett waxes incredulous:

This is the state of our discussion: the world's biggest and by-far strongest military regularly getting up into the grill of the second-biggest economy on the planet and letting it know--in no uncertain terms--that it will not countenance China exercising military power in its own region! Why? Despite being intensely overdrawn militarily around the planet and facing military resource shortages in the very same regions where Chinese economic interests are skyrocketing, it's in our best interest to deny China's rise with all our might. Safely buttressed by the vast security resources of our NATO allies, it's clear that we don't need any new friends and--instead--must do everything possible to deny their emergence, because more Chinese security means less U.S. security; it is a completely zero-sum game.

Brilliant stuff. I can't imagine why the Chinese look upon us as anything but the best of friends. I am flabbergasted at our naivete in hoping for something better to emerge.

The U.S. position toward China does seem to swerve between patronizing platitudes (they'll be a "stakeholder") and wary hedging.

Email | Print | Permalink | Comments | Share

Stuxnet, the computer virus that wrecked havoc with Iran's nuclear facilities, may have been a Chinese virus cooked up to attack India:

The deadly Stuxnet internet worm, which was thought to be targeting Iran's nuclear programme, might actually have been aimed at India by none other than China.

Providing a fresh twist in the tale, well-known American cyber warfare expert Jeffrey Carr, who specialises in investigations of cyber attacks against government, told TOI that China, more than any other country, was likely to have written the worm which has terrorised the world since June.

While Chinese hackers are known to target Indian government websites, the scale and sophistication of Stuxnet suggests that only a government no less than that of countries like US, Israel or China could have done it. "I think it's more likely that China is behind Stuxnet than any other country," Carr told TOI, adding that he would provide more details at the upcoming NASSCOM DSCI Security Conclave in Chennai in December.

This is the first I've heard of such accusations and there doesn't appear to be any other experts making similar claims. But still, an intriguing twist.

Email | Print | Permalink | Comments | Share

Ethan Epstein, a talented young writer, has a series of pieces this week at Slate concerning how the Chinese look at North Korea, in an odd sort of voyeurism:

North Korea fascinates even Chinese people living under nominally Communist rule. All the tourists on the boat clutching binoculars and pointing out sights on the North Korean side of the river are Chinese. The tourists at the Dandong International Hotel peering out into Sinuiju over breakfast were also Chinese.

Chenyin Jin, a Chinese academic, speculates that "Chinese people like to see North Korea because it reminds them of what life was like under Mao. There's an almost nostalgic appeal." Given how much China has changed in the last 30 years, looking at North Korea is like looking back in time for a lot of Chinese people. It is hardly surprising that the great majority of the 16,000 or so tourists who visit North Korea annually on stage-managed propaganda tours are Chinese. (Only a little more than 1,000 hail from Western countries.)

But there's something ghoulish about all this. Like "ghetto bus tours" of Compton or Harlem church tours, it can be argued that all this staring at North Korea amounts to little more than rubbernecking on a grand scale. Sure, North Korea is a country closed to the outside world, so it's easy to understand why people would be curious about how life is lived there. Yet as our boat slows down and we look through our binoculars at the skinny and woefully abused people on the riverbanks, I can't help but feel that this whole "industry" is a little disgusting.

I'll be curious to read his entries, and hope you will too.

Email | Print | Permalink | Comments | Share

The Financial Times reports on China's move to shore up its hold on the rare earth mineral market:

China produced 97 per cent of the world’s rare earths last year, and global concerns about that monopoly have peaked in recent weeks, after Japanese traders reported their rare earth shipments were halted during a diplomatic dispute between their country and China.

Thomas Barnett explains why China's gotten a strangle hold on the market:

The world has simply allowed China to achieve its dominant production position by abandoning their own mining efforts. Why? Very expensive and very environmentally damaging.

It's likely impossible, and self-defeating, to become "self sufficient" in rare earths (just as it is impossible to become "energy independent"). That said, 97 percent is a pretty alarming number. But I suspect that the more China thinks of its rare earths market position as a strategic cudgel, the faster it's going to lose that market share as alarmed nations reinvest in extraction of their own resources.

Email | Print | Permalink | Comments | Share

Sam Roggeveen assess China's recent efforts at bulking up its naval strength:

In surface ships, the PLA Navy is still substantially smaller and less capable than the Japanese maritime force, never mind the US Navy. But here, the story is growth and modernisation. China has increased its destroyer and frigate fleet while retiring obsolete ships and introducing advanced new types.

In both surface ships and submarines, Callick's description of 'steady' growth applies. Although there have been major acquisitions of Russian ships and subs, the emphasis has been on small-scale domestic production. After a handful of units, there's a lull while the PLA Navy accumulates operational experience, which leads to new designs. From the outside, at least, it all looks very methodical — even the headline-grabbing purchase of a derelict Russian aircraft carrier has been followed by a painfully slow refurbishment effort.

Given its economic growth, China's naval modernisation over the last decade could have been much more spectacular.

Email | Print | Permalink | Comments | Share

First it was a flair-up with China over disputed islands to its south. Now Japan and Russia are locking horns over the Kuril Islands to Japan's north.

This is certainly the kind of dynamic that could force a reappraisal inside the ruling DPJ about the merit of U.S. defense ties.

Email | Print | Permalink | Comments | Share

The Obama administration's decision to insist on an Israeli settlement freeze is, as some predicted, turning out to be a mistake, at least from the standpoint of rejuvenating the peace process. And it's pretty obvious why: the administration drew a line in the sand that they could not enforce. Leave aside whether they should have drawn this particular line so firmly, the fact is they let their rhetoric get out ahead of what they were actually willing or able to do to apply pressure to defend their line.

This is, unfortunately, a common practice in Washington. It was evident during the Bush years, when numerous stern warnings to the likes of Iran and North Korea went unheeded by their intended recipients with no serious consequences. The Obama administration has picked up the torch not only with the peace process, but with Iran as well.

The point here is not that the U.S. should follow through on every foolish pronouncement it makes, but that its public officials should stop using the language of "red lines" unless they actually and sincerely mean to enforce them. Either offer some mealy-mouthed equivocation or keep a reserved silence. Is that so hard?

China, too, has arguably made a similar blunder by recently declaring the South China Sea a "core national interest" - language it previously reserved for discussing Tibet and Taiwan. This proclamation set off an immediate, and overwhelmingly negative response from China's neighbors and the U.S. Whether this was a gaffe or not, it's now a marker in the sand that China is going to have to either defend (which would be costly and potentially calamitous) or claw back (which would be embarrassing). Either way, it's suggests that China is beginning to "talk the talk" of a superpower. They may rue the results.

(AP Photo)

Email | Print | Permalink | Comments | Share

The Economist has a good piece on why India will over-take China, putting them at odds with the recent swooning over China's efficient authoritarian/capitalist model. They write that India's demography is more favorable to long-term growth than China's, which has been stunted by its "One Child" policy. The second driver of Indian growth, they argue, is its democracy:

The notion that democracy retards development in poor countries has gained currency in recent years. Certainly, it has its disadvantages. Elected governments bow to the demands of selfish factions and interest groups. Even the most urgent decisions are endlessly debated and delayed.

China does not have this problem. When its technocrats decide to dam a river, build a road or move a village, the dam goes up, the road goes down and the village disappears. The displaced villagers may be compensated, but they are not allowed to stand in the way of progress. China’s leaders make rational decisions that balance the needs of all citizens over the long term. This has led to rapid, sustained growth that has lifted hundreds of millions of people out of poverty. Small wonder that authoritarians everywhere cite China as their best excuse not to allow democracy just yet.

No doubt a strong central government would have given India a less chaotic Commonwealth games, but there is more to life than badminton and rhythmic gymnastics. India’s state may be weak, but its private companies are strong. Indian capitalism is driven by millions of entrepreneurs all furiously doing their own thing. Since the early 1990s, when India dismantled the “licence raj” and opened up to foreign trade, Indian business has boomed. The country now boasts legions of thriving small businesses and a fair number of world-class ones whose English-speaking bosses network confidently with the global elite. They are less dependent on state patronage than Chinese firms, and often more innovative: they have pioneered the $2,000 car, the ultra-cheap heart operation and some novel ways to make management more responsive to customers. Ideas flow easily around India, since it lacks China’s culture of secrecy and censorship. That, plus China’s rampant piracy, is why knowledge-based industries such as software love India but shun the Middle Kingdom.

Email | Print | Permalink | Comments | Share

Michael Auslin isn't sure why they were conducted:

China has claimed the South China Sea as a core national interest, as we’ve repeatedly heard about lately, and is increasing its naval activities, including aerial exercises, in the East China Sea. All the while it refuses repeated requests that it settle territorial disputes in Southeast Asia in an established, transparent, multilateral manner. It would be a shame for one of America’s closest allies, Australia, to now decide to go down the path of paying respect to China’s maritime ambitions in the hopes of influencing its behavior. What the Australians get out of these exercises is difficult to discern. What the Chinese get is clear, as is the message smaller nations in the region receive.

Rory Medcalf offers an explanation:

Any suggestion that practical navy-to-navy cooperation and dialogue means that Australia is somehow slipping into China's strategic orbit and placing less importance on the alliance with the US – or on promising partnerships with Japan, South Korea and India — is wrong. Indeed, HMAS Warramunga's tour of North Asia included a re-enactment of the Incheon landing, a sign of Australian solidarity with South Korea and the US in these tense times on the Korean Peninsula.

The bottom line is that there are shared security benefits to be derived from navies getting to know each other better: improved channels of communication, understanding of each other's command systems and ways of operating, even basic awareness of the level of seamanship each side is capable of, all of which can help to calibrate decisions and liaison in a crisis. This applies at least as much to nations that might have clashes of interests at sea as it does to those who see their objectives as generally in harmony. That is why China's reluctance to resume military links with the US has been so self-defeating, and needs to end soon, for everybody's sake.

Email | Print | Permalink | Comments | Share

Rasmussen Reports:

Speaking at a dinner of American and Chinese businessmen in New York last week, Chinese Premier Wen Jiabao said the China-U.S. relationship “enjoys a bright future because common interests between our two countries far outweigh our differences.” But just 32% of Americans agree.

A new Rasmussen Reports telephone survey finds that 30% of Adults do not share the premier's view of common interests, and 38% are not sure. (To see survey question wording, click here.)

Most Americans agree, however, that U.S. relations with China are important. Eighty-three percent (83%) think the relation between the two nations is at least somewhat important, including 53% who think it is Very Important. Just nine percent (9%) think relations between the two are not important. This remains unchanged from nearly a year ago.

Still, an overwhelming majority of Americans (87%) are concerned about the level of U.S. debt now owned by China, including 61% who are Very Concerned. Just nine percent (9%) are not very or not at all concerned.

(AP Photo)

Email | Print | Permalink | Comments | Share

Walter Russell Mead does a nice job shooting down Thomas Friedman's contention that electric cars are the key to rejuvenating American manufacturing and the middle class. To just add a bit to Mead's case, the idea that electric cars will transition America off of "foreign sources" of energy and help us compete with China is simply not true. As frequent RCW contributor Daniel McGroarty has tireslessly pointed out, the batteries we'd be inserting into those electric cars rely on Rare Earth minerals to function. And guess who has the bulk of those minerals?

China.

(AP Photo)

Email | Print | Permalink | Comments | Share

China has long been recognized as the key player in the effort to isolate and pressure North Korea to give up its nuclear program. But it appears that Beijing is more interested in "investing" in the Hermit Kingdom than denuclearizing it:

China has launched a major push to boost economic engagement with North Korea and persuade Pyongyang to adopt reforms, experts say.

Analysts suggest Beijing believes development will improve regional stability by encouraging its impoverished neighbour to act more cautiously.

China also hopes to benefit from port access, mineral rights and increased trade.

But some believe the economic drive undercuts the impact of sanctions imposed in the hope of forcing North Korea to denuclearise.

From China's perspective, stability at the border and a buffer between it and U.S.-aligned South Korea matter more than whether the country has a few crude nuclear weapons or periodically engages in bouts of international blackmail. Until Washington can devise a way to change that calculus, we're going to be stuck with the Kim clan for a while longer.

(AP Photo)

Email | Print | Permalink | Comments | Share

Elizabeth Economy argues that China isn't just rising, but ageing:

Chinese officials appear most concerned about the ageing of the population. They face two separate challenges here. First, by 2050, China will have more than 438 million people over the age of 60, roughly 25 percent of the country’s total population. China’s leaders are desperately concerned about maintaining a strong and active labor force to ensure continued economic growth. Of course, people over 60 can continue to lead productive lives, working well into their seventies or even eighties, but China will need to improve its health care system to ensure their health care needs are met in the process.

Second, the skewed age demographic has brought about the “Four-two-one” problem, in which one child is responsible for caring for two parents and four grandparents, has been actively discussed for well over a decade. With a dearth of facilities to help care for the elderly, there is no doubt that the burden will be great on these only children, and recent polls suggest that many do not feel prepared to shoulder such a burden—even simply to take care of their parents, much less their grandparents.

Meanwhile, the Telegraph marks the 30th anniversary of China's "one child" policy:

But today, the one-child policy remains firmly in place and government officials cannot shake the idea that it has played an important role in China's economic miracle.

With only one child to care for, parents have been able to save more money, enabling banks to make the loans that have funded China's huge investments in infrastructure.

Meanwhile, officials claim the policy has conserved food and energy and allowed each child better education and healthcare.

"We will continue the one-child policy until at least 2015," said the National Family Planning Commission earlier this year.

Email | Print | Permalink | Comments | Share

Yoree Koh says that the Japanese government has come out swinging today against China by demanding payment for damage done to their vessels by a Chinese fishing boat in addition to ordering more Chinese fishing patrol boats away from the contested Senkaku islands and summoning the Chinese ambassador for a talking to.

If you're interested in what the fuss is all about, Global Security.org has a good primer on the actual islands in contention.

(AP Photo)

Email | Print | Permalink | Comments | Share

It's not everyday that I agree with what Tom Friedman says about China. Typically, he goes there, gets starry eyed, and starts extolling all the virtues of the Chinese Communist Party.

His column today wasn't quite that. And he was 100 percent correct on why China gets things done whereas the U.S. no longer does.

This was right on the money:

Studying China’s ability to invest for the future doesn’t make me feel we have the wrong system. It makes me feel that we are abusing our right system. There is absolutely no reason our democracy should not be able to generate the kind of focus, legitimacy, unity and stick-to-it-iveness to do big things — democratically — that China does autocratically. We’ve done it before. But we’re not doing it now because too many of our poll-driven, toxically partisan, cable-TV-addicted, money-corrupted political class are more interested in what keeps them in power than what would again make America powerful, more interested in defeating each other than saving the country.

Once upon a time the U.S. did build Interstate freeways that traversed the entire continent. Dams that regulated water flow and generated power. Skyscrapers that were the envy of the world. And all that was done in a free society and under democratic governance.

(Just the other day a friend and I joked about the L.A.-to-San Francisco bullet train, something that's been "in the works" for more than 20 years and yet not a single rail has been laid. We concluded that our grandchildren will still be talking about it 50 years from now.)

Nothing gets built anymore in the U.S. - other than sports stadiums. Too much red tape. Too many lawyers. Special interest groups. Unions. By the time an environmental impact study was done, a new one has to be commissioned. In the meantime, China just finished adding another thousand miles of high-speed railway.

Another valid point Friedman made about China is its leadership. The top of the CCP leadership chain is frighteningly competent. To rise to the pinnacle in China these days, you can't do it with catchy slogans or being the son of a former president.

Hu Jintao is an engineer by trade. Wen Jiabao a geologist. The fifth-generation CCP leaders have even more diverse backgrounds after a generation dominated by engineers. Many have PhDs and a great number of them are now foreign-educated.

But Friedman does miss a point (perhaps on purpose). With a near-homogeneous population (91 percent Han Chinese), China doesn't have diversity issues; and its benevolence toward minorities is purely lip service.

In the Chinese view, somewhat tinged with racism, the U.S. and the west are being dragged down by their minority populations and racial strife. But the reality is that it's not the blacks and Latinos that are impeding progress in the U.S., as the Chinese are wont to believe (a same attitude held by the Japanese, especially when it was booming in the '80s), it's the diversity-driven politics that are long on sensitivity but short on competitiveness.

That's part of the recipe for the hamburger that may ultimately do the U.S. in.

Email | Print | Permalink | Comments | Share

Hugh White's essay on the emerging great power competition between the U.S. and China and what role Australia should play is making quite an impact in wonkish Australian circles. It's been little remarked on in the U.S. as far as I can tell, no doubt thanks to the preoccupation with Afghanistan and Iran, but it's a debate worth following closely. It's a foreshadow of the more urgent strategic debate slowing gaining ground in the United States - to wit: whether to "accommodate" China or attempt to contain and contest her rise.

Australia's position is unique, obviously. They cannot choose containment if no one else does, but Australia could undermine any potential American containment regime by unilaterally choosing accommodation. Australia, as White documents, is in a tough spot and has been ill-served by leaders who have refused to wrestle with the strategic implications of a rising China and the potential for a U.S.-China clash.

Crispin Rovere provides a good overview of the strategic debate in Australia:

It is good to remind ourselves of what the underlying beliefs were when the 'hedging' strategy was formed. These have underpinned it to the present day. The prevailing assumption being that, as China became richer, several things would occur: (a) An educated middle class would emerge, free from subsistence concerns, demanding greater political freedom and precipitate liberal democratic reforms; (b) China, after realising the benefits of export-driven growth, would see little reason to rock the boat, and gratefully integrate itself into the American led international order, just as Japan did after its post-war reconstruction; and (c) eventually one-party rule would cause stagnation in the Chinese economy, just as it had done in the Soviet Union. Ultimately the Chinese elite would see the Washington Consensus as the only viable model for a successful capitalist system, with the government removing itself from the affairs of the private sector.

As of 2010, none of these things have happened. On the contrary, as the Chinese are becoming richer they are becoming more nationalistic, and the Chinese Communist Party's legitimacy is now reliant upon, rather than subverted by, sustained economic growth. China is integrating into the US-led order only in as much as it serves its perceived interest, but is taking an increasingly assertive line as their power grows. [emphasis mine]

I wonder if China's reliance on economic growth isn't much the same thing as being subverted by it. In an important sense, the Communist Party's legitimacy is now tied to the economic prosperity of its people in a way that it simply wasn't before. To the extent that China needs good relations with America and its Asian trading partners to sustain its economic growth, wouldn't the Communist leadership remain wary about upsetting the applecart?

The question, and worry, is what happens if China's economic growth unexpectedly sputters. Will the Communist party seek legitimacy in nationalism and external conflicts? Or will it dabble with political liberalization in the hopes of reviving its economic fortunes and staving off internal unrest?

(AP Photo)

Email | Print | Permalink | Comments | Share

Arifa Akbar reports:

Mao Zedong, founder of the People's Republic of China, qualifies as the greatest mass murderer in world history, an expert who had unprecedented access to official Communist Party archives said yesterday.

Speaking at The Independent Woodstock Literary Festival, Frank Dikötter, a Hong Kong-based historian, said he found that during the time that Mao was enforcing the Great Leap Forward in 1958, in an effort to catch up with the economy of the Western world, he was responsible for overseeing "one of the worst catastrophes the world has ever known".

Mr Dikötter, who has been studying Chinese rural history from 1958 to 1962, when the nation was facing a famine, compared the systematic torture, brutality, starvation and killing of Chinese peasants to the Second World War in its magnitude. At least 45 million people were worked, starved or beaten to death in China over these four years; the worldwide death toll of the Second World War was 55 million.

A staggering, incomprehensible sum.

(AP Photo)

Email | Print | Permalink | Comments | Share

Thomas Barnett isn't buying Andrew Krepinevich's concerns about China:

I mean, I'd love to read the scenario whereby China's "dazzles" a few US satellites and launches some surprise cyber attacks and blows up a couple of US warships with missiles and voila! Suddenly everybody in SE Asia is China's cowed minions willing to do whatever it says. Oh, and the rest of the world just accepts this fait accompli, offering no response. Doesn't that fantastic logic strike you as mirror-imaging the same sort of net-centric "shock and awe" that we've never been able to pull off on anyone to any lasting effect? So how come China, with its completely inexperienced military, is going to make that happen with such ease and such obvious and permanent gain (i.e., "finlandization)?

It's amazing to me: we supposedly learn the harsh reality of war in the 21st century in Iraq and Afghanistan (i.e., that the high-tech most certainly does not rule--much less guarantee victory), but now we're supposed to freak out and go all Cold War over China because it's able--on a zero-experience base--to do everything we weren't able to do with net-centric warfare and they'll be so good at it that we'll never see it coming and we'll lose everything before we even know what hit us.

Email | Print | Permalink | Comments | Share

Christopher Albon and Craig Hooper write in favor of an application of naval soft power:

On August 31st, little noticed outside naval analyst circles, China’s first purpose-built hospital ship left port on her inaugural mission. The 10,000 ton vessel, called Peace Ark, and her crew of over 400 military and medical personnel will spend the next 87 days providing health care to foreign militaries in the Gulf of Aden and humanitarian assistance to civilians in Djibouti, Kenya, Tanzania, the Seychelles, and Bangladesh. More than that, Peace Ark’s deployment marks the start of a new phase of Chinese soft power: medical assistance to win hearts and minds.

U.S. Navy ships, including hospital ships, routinely conduct similar humanitarian assistance and disaster relief operations. The U.S.N.S. Mercy is currently returning from such a mission in the Pacific. However, in almost all cases these deployments are completed by one or two vessels, whose work often achieves only minor local media coverage. If we are serious about improving global perceptions of the U.S., we must think bigger.

One hundred and two years ago, sixteen United States Navy battleships steamed out of Hampton Roads, Virginia. For the next two years, this fleet circumnavigated the globe, making port calls on six continents. The armada, sporting freshly painted white hulls, became known as the “Great White Fleet,” and by doing everything but fight introduced a new and invigorated America to the world.

We need a second Great White Fleet.

One of the interesting questions under the current administration is whether there is a willingness to deploy soft power for use in situations that clash, even indirectly, with the interests of China. Much as I have agreed with the steps of Robert Gates as Secretary of Defense, his attitude toward the use of the Navy toward these kind of ends is perhaps a bit too negative. In any case, an interesting proposition.

Benjamin Domenech, a former speechwriter for Tommy Thompson and Sen. John Cornyn, is editor of The New Ledger and a research fellow with The Heartland Institute. He writes on defense and security issues for The Compass.

Email | Print | Permalink | Comments | Share

Vaclav Smith says we shouldn't worry about oil supplies running out:

Appraisals of the oil future tend to focus on dwindling supply and assume that demand will inexorably grow. But this is not the case. Rising oil prices and economic downturns exert clear downward pressure on demand, and we can reinforce this pressure through more efficient fuel conversions, by promoting sensible alternatives, and, above all, by turning to natural gas. This abundant fuel can do everything oil can, and is already the most important fuel for heating houses and the second most important fuel for generating electricity. The United States already has natural gas reserves sufficient for nearly a century at the current rate of consumption.

Extraction of any mineral resource must decline and eventually cease, but oil will continue to be a major contributor to the world energy supply in the coming decades. Whenever it comes, news of a peak in global oil production should be greeted with calm. Energy transitions throughout history—from biomass to coal, from coal to oil and gas, and from direct use of fuels to electricity—have always resulted in more productive and richer economies. Modern society will not collapse simply because we face yet another of these grand transformations.

The Council on Foreign Relations' Geo-Graphics blog isn't so upbeat:

South Korea, which consumes 3% of world oil output, is too small to disrupt oil markets. China is too big not to disrupt them. Were China’s per capita oil consumption to be brought up to South Korea’s, its share of global consumption would increase from today’s 10% to over 70%. In order to cap China’s share at 22%, which is the U.S. share today, global oil output would have to increase by a massive 13% per annum over ten years – well beyond the 1% growth averaged since 1975. This rate of growth is inconceivable, even if vastly more expensive sources of supply, such as the Canadian oil sands, were developed at breakneck speed.

(AP Photo)

Email | Print | Permalink | Comments | Share

One of the reassuring messages in Ian Bremmer's The End of the Free Market is that the world's autocratic capitalist states (China, Russia, Saudi Arabia, etc.) did not have a zero-sum view of economic growth, like many nations did in the early half of the 20th century. So while their state champions and sovereign wealth funds can distort global markets, the world can escape the beggar-thy-neighbor cycle of economic destruction that marked the Great Depression.

Reading Vivian Fritschi's analysis on a coming era of resource constraints, I'm no longer sure we can be so sanguine about state capitalism. Economic growth is fundamentally anchored in the exploitation of resources, many of them finite in nature. From food, to water, to key minerals, many of these resources are under strain and the state firms of China in particular are keen to shore up privileged access to these supplies. While they may take a more liberalized view on the prospects of shared economic growth, these autocratic states seem to take a more 20th century view of the resource base this growth is built upon.

(AP Photo)

Email | Print | Permalink | Comments | Share

India's Prime Minister Manmohan Singh chatted up the editors of the Times of India:

"China would like to have a foothold in South Asia and we have to reflect on this reality. We have to be aware of this," he said. He, however, also said that it was his firm belief that the world was large enough for India and China to "cooperate and compete" at the same time.

After his meetings with the Chinese leadership, including with President Hu Jintao and Prime Minister Wen Jiabao, Singh said he was of the feeling that Beijing wanted to sort out the outstanding issues with India. "However, this leadership will change in two years. There is a new assertiveness among the Chinese. It is difficult to tell which way it will go. So, it's important to be prepared."

One reason we shouldn't treat a U.S.-China Cold War as inevitable is that China's geostrategic environment is a lot more constrained than the Soviet Union's was.

(AP Photo)

Email | Print | Permalink | Comments | Share

Ouch:

Thousands of coal trucks and other vehicles were backed up for miles on a highway in northern China on Friday, the latest in a series of monster traffic jams that have plagued the overloaded road since construction began on a parallel route earlier this summer... State television broadcaster CCTV reported that about 10,000 trucks were stuck in the jam. The exact length of the gridlock was not clear, but one of the worst stretches was a 75-mile (120-kilometer) span of highway between Inner Mongolia's Zhouzi and Xinghe counties, media reports said.

The BBC has the video.

(AP Photo)

Email | Print | Permalink | Comments | Share

Evan Osnos observes:

Real or contrived, the Oval Office curtain call on the war in Iraq has drawn ardent interest from the Chinese government and press, which have greeted the occasion with a reaction that veers between mournful and self-righteous. But the most important subtext in the Chinese response, albeit implicit, is a fact that says more about the changes of the last seven years than it does about the war itself: when the war began, America was stronger—and China was far weaker—than either side is now.

China was never fond of the war for both practical and philosophical reasons. It was one of five countries—the others were Russia, Indonesia, India, and Vietnam—that had oil deals in place with Saddam Hussein when the U.S. invaded. It has since recovered its position, and far more, emerging, as the A.P. put it in June, “as one of the biggest economic beneficiaries of the war, snagging five lucrative deals.” While Western oil companies responded coolly to Iraq’s recent oil auctions, Chinese companies shrugged off “the security risks and the country’s political instability for the promise of oil.”

[Hat tip: Patrick Appel]

Email | Print | Permalink | Comments | Share

Two news items amplify Daniel McGroarty's piece running on the front page today regarding the potential for heightened resource competition around the world.

The first is Andreas Landwehr's report in the China Post on China's voracious appetite for minerals:

Never before has China invested so many billions of dollars to ensure that the demands of its manufacturers and consumers are met, but in their buying sprees around the world, state-owned Chinese businesses are also meeting with resistance.

China already uses twice as much steel as the United States, Europe and Japan combined, and the sheer scale and speed of the country's economic growth will see its demand for resources rise for decades to come.

The other, and perhaps more significant, warning is being raised by the Bundeswehr Transformation Center (a think tank affiliated with the German army) regarding oil shortages. The study, which was leaked to Der Spiegel, paints a fairly stark picture of a future market collapse and the rise of importance of oil exporting countries.

The West needs to return to strong economic growth, but such a rebound would set in train the competition for finite resources sketched above.

(AP Photo)

Email | Print | Permalink | Comments | Share

Stacey Higganbotham reports:

The number of internet users in China rose by 9.4 percent from the beginning of the year to the midpoint, and is now at 420 million, according to China Internet Network Information Center (CNNIC), and reported by TeleGeography. Many of those users are connecting from wired connections, but China has a huge population of mobile phone users who are hopping online as 3G is rolled out across the country.

Of the total Internet users, 363.8 million (or 86.6 percent) accessed the web through wired broadband, while 276.8 million (65.9 percent) used mobile handsets. The numbers don’t add up because some people have multiple connections. Telegeography reports that the average time spend surfing the web was 19.8 hours per week in China. In contrast, Americans spend an average of 13 hours online a week, according to a Harris Interactive poll from December.

(AP Photo)

Email | Print | Permalink | Comments | Share

Evan Feigenbaum observes that while China's military leaders are feeling confident, its economic leaders are not so blustery:

For some in China’s strategic class, the crisis reinforced breathtaking conclusions about China’s “rise” and American “decline.” It fed sweeping (and exaggerated) conclusions about shifts in the balance of power. But for China’s economic managers, this crisis has been deeply unsettling: Domestic and household consumption are up; but they aren’t rising fast enough to replace global demand as a source of new economic growth. China is exiting its $586 billion stimulus. Planners worry about asset bubbles in the property market. And, despite efforts to “rebalance” the Chinese economy, China ended July with a $29 billion trade surplus. China’s strategic class may preen, then. But those who focus on China’s economy, society, and politics increasingly emphasize difficult challenges and tough questions: Where will sustained and robust growth come from if global demand remains slack? Can China manage the political implications of slower growth? Can China continue to protect its exporters in the face of growing international pressure on the value of its currency?

This is a useful reminder that while concerns about an emerging security competition in Asia are valid, it's not the only lens through which to view the rise of China. If concerns about growth and development continue to trump expanding regional ambitions, I suspect China will be far more hesitant to challenge the status quo.

(AP Photo)

Email | Print | Permalink | Comments | Share

Yoree Koh reports that the Japanese couldn't care less that the Chinese have vaulted ahead of them as the world's second largest economy:

Japan is taking the demotion with a shrug.

“It can’t be helped,” said Koichi Matsubara, 36, who works in real estate. “Business has been drifting overseas, our population is shrinking. We’re a small island, and given the size of our country, we were perhaps at the top longer than expected. I think we will continue to lose ground.”

But the fall is more often attributed to Japan’s lack of fighting power compared to the days of post-World War II yore when it was chasing after its more developed European rivals.

“Japan lost its momentum,” said Kazuyoshi Ono, a 58-year-old former banker. “The thinking in the past was, ‘If I work hard, the harder I work the more likely I’ll succeed,’ but we’ve lost that hungry spirit.”

Email | Print | Permalink | Comments | Share

Analyzing the Pentagon's latest report on Chinese military power, the Strategic Security Blog sees some setbacks in China's nuclear weapons programs.

Email | Print | Permalink | Comments | Share

A new survey shows that negative impressions between Japan and China run deep in both countries:

About 70 percent of Japanese and 60 percent of Chinese have negative impressions of each others' countries on food safety, historical differences and a bilateral dispute over resource development, according to the results of a poll released Saturday....

The annual survey found that while the ratio of Japanese who view China negatively was nearly unchanged from the previous year, the proportion of Chinese with negative feelings toward Japan fell by more than 10 points, apparently reflecting more positive coverage of Japan through the Chinese media.

(AP Photo)

Email | Print | Permalink | Comments | Share

John Mearsheimer has an interesting lecture (pdf) on the emerging competition between the U.S. and China:

I expect China to act the way the United States has acted over its long history. Specifically, I believe that China will try to dominate the Asia-Pacific region much as the United States dominates the Western Hemisphere. For good strategic reasons, China will seek to maximize the power gap between itself and potentially dangerous neighbors like India, Japan and Russia. China will want to make sure that it is so powerful that no state in Asia has the wherewithal to threaten it. It is unlikely that China will pursue military superiority so that it can go on the warpath and conquer other countries in the region, although that is always a possibility. Instead, it is more likely that Beijing will want to dictate the boundaries of acceptable behavior to neighboring countries, much the way the United States makes it clear to other states in the Americas that it is the boss. Gaining regional hegemony, I might add, is probably the only way that China will get Taiwan back.

A much more powerful China can also be expected to try to push the United States out of the Pacific-Asia region, much the way the United States pushed the European great powers out of the Western Hemisphere in the nineteenth century. We should expect China to come up with its own version of the Monroe Doctrine, as Imperial Japan did in the 1930s....

And what is the likely American response if China attempts to dominate Asia? It is crystal clear from the historical record that the United States does not tolerate peer competitors. As it demonstrated over the course of the twentieth century, it is determined to remain the world’s only regional hegemon. Therefore, the United States can be expected to go to great lengths to contain China and ultimately weaken it to the point where it is no longer a threat to rule the roost in Asia. In essence, the United States is likely to act toward China similar to the way it behaved toward the Soviet Union during the Cold War.

I think there's a lot to this analysis, particularly the inevitability of some kind of Cold War-style standoff, albeit one that's less intense than the conflict with the Soviet Union. But unlike the Cold War, there's much less of an ideological component to U.S.-China security competition. And if China can't be portrayed as revolutionary power bent on global domination, it will be a lot harder for Washington to justify the costs and risks of an Asian containment scheme.

[Hat tip: Stephen Walt]

(AP Photo)

Email | Print | Permalink | Comments | Share

China has reportedly skipped ahead of Japan as the world's second largest economy, but according to a study produced by the Russian space agency Roscosmos the country has already claimed the top spot in a somewhat less prestigious indicator:

Who’s the biggest space polluter on the planet? Why that would be China, a relative newcomer to the space age, which now tops the list of countries contributing to space debris, according to a study by the Russian space agency, Roscosmos.

China accounts for 40 percent of the space debris, followed by the United States, which produces 27.5 percent and Russia, with 25.5 percent, the study showed.

(AP Photo)

Email | Print | Permalink | Comments | Share

The U.S. is building an "Asian NATO" to encircle China, according to Dai Xu, a Chinese military strategist.

Email | Print | Permalink | Comments | Share

Thomas Wright suggests that the Obama administration start thinking about what it can salvage from the decline and fall of Pax Americana:

The Obama administration should continue to engage emerging powers, but it now needs a new strategy of preservation to ensure the current international order can withstand external pressures and function effectively, even if a major power, such as China, decides to undermine it. To do this the US needs to build new geopolitical partnerships and alliances; Indonesia and India are good candidates. It must seek European support for core principles of openness, including freedom of the seas, space and cyberspace, to be upheld even if China and others encroach upon them. It should give more influence to nations willing to take on greater responsibilities in tackling shared problems – including South Korea, and on certain issues Vietnam and Turkey – and pressure those who do not.

If the administration wants to preserve an international environment that values "openness" it will need more than new alliances with emerging Asian powers - it will need an economic and trade agenda to match.

(AP Photo)

Email | Print | Permalink | Comments | Share

A larger proportion of Chinese mobile phone users are accessing the Internet via their phone than their counterparts in the U.S. The Nielsen Company reports:

In a short amount of time, mobile consumers in China have surpassed their American counterparts when it comes to using the devices to access the Internet (38% of Chinese mobile subscribers compared to 27% of American mobile subscribers), despite less advanced networks. Whether it’s kids in Beijing downloading games or adults in Shanghai requiring real-time information about the stock market and the ability to act on it on the go, the mobile Web is becoming an integral part of Chinese life....

Today, there are 755 million cell phone subscribers in China – more than half of the population. That makes China the world’s largest mobile device market....

In China, the vast majority of mobile consumers (87%) use pre-paid plans. In the U.S., less than 20% of mobile consumers use them, as most Americans prefer subscribing to post-paid plans. Even though Chinese have less 3G network coverage and own fewer smartphones, they tend to use their mobile phones to access the Internet while on the go more than Americans (38% vs. 27%). Chinese also texted (86% vs. 64%), and instant messaged (23% vs. 16%) more often. Meanwhile, Americans used their mobile devices more than Chinese for e-mail (25% vs. 8%) and picture messaging (37% vs. 22%).

You can find a list of the most wired countries in the world here.

[Hat tip: ICT Newslog]

Email | Print | Permalink | Comments | Share

Dani Rodrik pushes back against the argument that autocratic systems make for good capitalism:

Democracies not only out-perform dictatorships when it comes to long-term economic growth, but also outdo them in several other important respects. They provide much greater economic stability, measured by the ups and downs of the business cycle. They are better at adjusting to external economic shocks (such as terms-of-trade declines or sudden stops in capital inflows). They generate more investment in human capital – health and education. And they produce more equitable societies.

Authoritarian regimes, by contrast, ultimately produce economies that are as fragile as their political systems. Their economic potency, when it exists, rests on the strength of individual leaders, or on favorable but temporary circumstances. They cannot aspire to continued economic innovation or to global economic leadership.

At first sight, China seems to be an exception. Since the late 1970’s, following the end of Mao’s disastrous experiments, China has done extremely well, experiencing unparalleled rates of economic growth. Even though it has democratized some of its local decision-making, the Chinese Communist Party maintains a tight grip on national politics and the human-rights picture is marred by frequent abuses.

But China also remains a comparatively poor country. Its future economic progress depends in no small part on whether it manages to open its political system to competition, in much the same way that it has opened up its economy. Without this transformation, the lack of institutionalized mechanisms for voicing and organizing dissent will eventually produce conflicts that will overwhelm the capacity of the regime to suppress. Political stability and economic growth will both suffer.

This is the basic message of Ian Bremmer's book, the somewhat erroneously titled The End of the Free Market. Bremmer argues that despite the threat posed by autocratic capitalist systems, they'll ultimately be undone by their own shortcomings. It might be hard to imagine after the recent debacles of democratic capitalism, but I suspect it's true.

[Hat tip: Nick Schulz]

Email | Print | Permalink | Comments | Share

This double game goes back to 9/11. That terrorist attack was basically planned, executed and funded by radical Pakistanis and Saudis. And we responded by invading Iraq and Afghanistan. Why? The short answer is because Pakistan has nukes that we fear and Saudi Arabia has oil that we crave....

Is there another a way? Yes. If we can’t just walk away, we should at least reduce our bets. We should limit our presence and goals in Afghanistan to the bare minimum required to make sure that turmoil there doesn’t spill over into Pakistan or allow Al Qaeda to return. And we should diminish our dependence on oil so we are less impacted by what happens in Saudi Arabia, so we shrink the funds going to people who hate us and we make economic and political reform a necessity for them, not a hobby.

Alas, we don’t have the money, manpower or time required to fully transform the most troubled states of this region. It will only happen when they want it to. We do, though, have the technology, necessity and innovators to protect ourselves from them — and to increase the pressure on them to want to change — by developing alternatives to oil. It is time we started that surge. - Thomas Friedman

Here's a question: are the Chinese offering security guarantees to the various countries they buy oil or natural resources from? Yes, they sometime run interference for states like Sudan or Iran at the UN, but is China as heavily invested in the security of any foreign regime from which it has energy deals as the U.S. is in the Gulf? Why not take a page out of their play book?

Email | Print | Permalink | Comments | Share

According to a report in the Japanese press:

Japan is to increase its submarine fleet for the first time in 36 years, the Sankei Shimbun reported Sunday. The plan apparently aims to counter China's naval build-up by partially filling the void created by the U.S. reduction of submarines in the Pacific area.

The paper said the Japanese government plans to increase the number of submarines from the current 18 including two trainer submarines to more than 20 when it revises its Defense Program Guidelines by year's end.

Michael Auslin sees this development as reflecting "uncertainty" about Japan's ties to the U.S. It could be. But this uncertainty isn't necessarily a bad thing if it catalyzes an arms race in Asia: front line states should be the ones that assume the lion's share of the burden and cost of their own defense.

I think the role of the U.S. as a balancer of last resort should be maintained, but we should certainly not be discouraging countries like Japan or South Korea if they want to make a more substantial investment in their own defenses. If the Obama administration is creating some uncertainty in the minds of America's Asian allies about the U.S. commitment, and that uncertainty is catalyzing greater defense expenditures on the part of our allies, is this really a bad thing?

Notice also that instead of "bandwagoning" with China, key Asian states are asserting their own interests. As the Lowy Institute's Graeme Dobell writes, China's handling of North Korea has definitely pushed the South Koreans closer to the U.S. when the conventional held that South Korea was primed to fall into China's "orbit."

(AP Photo)

Email | Print | Permalink | Comments | Share

During her stop in Vietnam, Secretary Clinton offered to mediate competing territorial claims in the South China Sea:

Secretary of State Hillary Rodham Clinton, speaking at a meeting of the Association of Southeast Asian Nation, or Aseans, in Vietnam, said, “The United States has a national interest in freedom of navigation, open access to Asia’s maritime commons, and respect for international law in the South China Sea.”

The United States, she said, was prepared to facilitate multilateral negotiations to settle competing claims over the islands — something sought by Vietnam, which has had deadly clashes with China over them. In 1988, warships from China and Vietnam traded fire in the Spratly Islands, sinking several Vietnamese boats and killing dozens of sailors.

China maritime ambitions have expanded along with its military and economic muscle. It has long laid claim to islands in the South China Sea because they are rich in oil and natural gas deposits. And it has put American officials on notice that it will not brook foreign interference in the waters off its southeastern coast, which it views as a “core interest” of sovereignty.

As Ishaan Tharoor notes, China's rise is sparking a low key regional arms race:

In the past year, regional powers such as India, Vietnam, Australia and even countries with U.S. bases such as Japan and South Korea have all taken significant measures to upgrade their navies; an Asia-Pacific arms race is on the cards. While the U.S. remains the pre-eminent force in the Pacific, Chinese officials are able to plan half a century down the line. "If it was up to the Navy, I don't think the U.S. would see any sense in conceding its hegemony in the future," says Roy of the East-West Center. "That would be the result only of a political decision." But, with American politics hobbled by recession, unemployment and wars in West Asia, it's no surprise that governments elsewhere may not be counting entirely on Washington's supremacy.

Incidentally, this is a pretty good resource delineating the competing territorial claims in the South China Sea.

Email | Print | Permalink | Comments | Share

Daniel Blumenthal:

The Obama administration appears to have gotten the message. They did sell a much needed package of arms to Taiwan. Secretary Gates did not mince words in talking about U.S. and allied interests in the South China Sea and the administration appears to be going forward with joint anti-submarine warfare exercises with the South Koreans despite howls of protests from China.

Washington still has a strong hand to play. China is growing stronger, but, for all of its chest thumping, it pales in strength compared with the United States and its allies in Asia. And none of our Asian allies want a dominant China. Indeed, one of the untold stories in Asia is the region's military modernization. Almost all of our allies are buying advanced tactical aircraft (mostly the F-35), maritime surveillance capabilities, and diesel submarines -- to deal with a rising China. The atmosphere is ripe for us to begin creating an informal network of alliances operating more closely together, particularly since much of what our allies are buying is American equipment. Washington should start to build the institutions today that will allow the allies to train together on their fifth-generation aircraft, patrol the South China Seas, and hunt for submarines. How about announcing the creation of a fifth generation aircraft "center for excellence" in Singapore, where all allies can train?

The point is that there is still a chance to present China with a choice: act like a responsible power or face a great wall of resistance.

I think the basic contours of this sound right: China is not going to expand into a vacuum. Whereas the Soviet Union was able to march into militarily defeated territory during and after World War II to grow its power base, China has no such luxury. This puts the U.S. on rather solid footing with respect to the balance of power in Asia, but it still requires some investment and attention on our part (which is why starting a third war in the Middle East would be a significant mistake).

But as an aside, I don't quite understand Blumenthal's point about "acting like a responsible power." China has interests. Those interests may or may not conflict with America's. There is nothing inherently "irresponsible" about a country pursuing its interests, even if they conflict with ours. I imagine, were the shoe on the other foot, Blumenthal would find this kind of language from officials in Beijing rather tedious.

(AP Photo)

Email | Print | Permalink | Comments | Share

That's according to the International Energy Agency:

Back in June 2007 China earned the dubious distinction of surpassing the U.S. to become the world's top emitter of greenhouse gases. Now approximately three years later, the highly populated country has become the world's largest consumer of energy.

The news that China may now be the world biggest energy customer comes based on analysis by the International Energy Agency (IEA). According to the IEA, China overtook the U.S. in energy consumption sometime last year.

Despite having over 1.3 billion people, versus about 307 million in the U.S., China's new title may be primarily driven by the inefficient way it uses energy. While the U.S. has improved its energy efficiency by 2.5 percent per year from 2000 to 2010, China only improved 1.7 percent.

Interestingly, the Chinese have disputed the IEA's findings, claiming that America is still top dog in this category. Either way, the Chinese know how much energy the use and how much they need. The question is, will their search for resources bring greater stability or instability to the world?

Email | Print | Permalink | Comments | Share

The Beijing-Google row notwithstanding, Gallup notes that internet usage has surged in China:

The rise in Internet access in Chinese homes -- whether via computers or mobile devices -- may continue to accelerate not only because of increasing consumer confidence, but also because of the "network effects" of information technology. As more Chinese begin to use online communication, the value of access increases for everyone, driving demand among those who don't have it.

The potential effects are far-reaching: Chinese consumers will likely demand more digital products and content services as Internet use grows, and international corporations will have new opportunities to reach millions of consumers in rural China.

Email | Print | Permalink | Comments | Share

Matthew Yglesias sees the upside of Chinese economic growth:

What’s more, beyond those narrow economic considerations, growth in China is strongly positive-sum in a number of other domains. A richer China will, for its own selfish reasons, be host to increased quantities of scientific and technical research that will increase the overall stock of human knowledge in a generally beneficial way. A richer China will also produce additional works of culture that will enrich our lives over and above whatever economic value they might have. Economic growth in China and other large poor countries is one of the most promising phenomena of our times and it’s a very big problem that people don’t generally understand it that way.

(AP Photo)

Email | Print | Permalink | Comments | Share

Subbing in at Andrew Sullivan's blog, David Frum gets some push-back on the notion that American world leadership be a defining characteristic of conservative politics. Frum responds:

Plaintively in some cases, ferociously in others, people asked: why should American world leadership be a goal of any kind of conservative politics?

My answer: consider the alternatives. For 60 years, the democratic countries have known ever-rising levels of affluence and security. This benign system of collective security and free trade has extended outward to encompass more and more countries: beyond western Europe to include central and eastern Europe, beyond Japan to reach the small countries of the Pacific Rim. We have not done so well in Latin America and the Middle East, but Chile at least has joined the system and Brazil likely soon will.

This construct is the work of no one country, but it ultimately rests upon the reassuring fact of American power. As Murray Kempton said of Dwight Eisenhower, it is the great tortoise on whose broad shell the world sat in sublime disregard of the source of its peace and security.

Just as even the most self-equilibriating markets need a lender of last resort, so even the most stable international system needs a security guarantor of last resort. Some describe the post-1945 system as a "democratic peace." But democracy alone did not suffice to keep the peace after 1918. It's an American-sustained peace, and should the day come when America loses the power or will to sustain it, the international system that will follow will be not only more dangerous but also less hospitable to liberal values in the broadest sense of the word liberal.

The question I'd pose is not about America's "will" but America's power. America is losing power, in part because of policies that Frum himself championed (see: Iraq, invasion of) and as a result of the economic development of China, which the U.S. has encouraged and profited from.

What does American "leadership" consist of in a world where China continues to close the power gap? A politics, conservative or otherwise, that can cogently address that question without resorting to banalities about American exceptionalism or reassuring myths about how globalization will make everyone play nice, is sorely needed.

(AP Photo)

Email | Print | Permalink | Comments | Share

Martin Regg Cohn has an interesting column in today's Toronto Star on the fine line between espionage and soft power in Canada:

Forget the stagecraft of spy novels, or the make-believe machinations of those captured Russian sleeper agents. China targets Canadians with more mundane tactics ranging from sumptuous free lunches to package tours of China. Last month, a so-called “opinion leader” told me excitedly that he’d been invited on a tour of China. MPs go all the time. So do freelance journalists. All on China’s dime.

Call it soft power. But spying can be a deadly serious business when it tars entire communities. The canard of “dual loyalties” has dogged Canadians of Chinese, Japanese, Italian and Jewish descent over the years — with many innocent citizens unjustly detained in wartime.

It’s a mistake to single out diasporas. While the Chinese and other governments shamelessly target émigré groups to aid the motherland, they spend at least as much time and money trying to win over the “landed gentry” — the white folks who make up the Canadian establishment going back generations.

Read the whole thing here.

Email | Print | Permalink | Comments | Share

Andrew Jacobs has a good piece in the New York Times detailing how labor unrest in China is leading to higher wages and better working conditions for Chinese workers. The question the piece raises in my mind is whether this is a middle stage toward eventual pressure on China's communist leadership for political reform. As the Chinese win ever greater concessions and benefits from their bosses, will they then turn on their political bosses with similar demands? Or is it the opposite - high employment and rising wages will lead to a sense of contentment with the system?

(AP Photo)

Email | Print | Permalink | Comments | Share

This is a bit old, but nevertheless still relevant. It's historian Niall Ferguson discussing the shift of economic power toward the East (you can watch the full interview here). At the eight minute mark he raises a good point. The U.S. is facing, in Ferguson's words, "a genuine superpower, a real economic rival" in China, and yet we're so distracted by our "colonial wars" (his words) in Iraq and Afghanistan that we're not seriously grappling with the implications of this.

He goes on to say that there is a clear dilemma facing the U.S. - should we treat China as the British treated the rise of the United States as a world power, by accommodating it. Or do we try to balance against China, as the British balanced against the rise of Germany, through a series of alliances in Asia.

It's a good question, but I don't think the choices are that stark. I think there is a clear danger in embarking decisively down either path, in part because it's not clear what kind of "great power" the Chinese are going to be. Military power is a lot less useful to the Chinese in the 21st century than it was to the Germans in the 20th. Nevertheless, if we are overly accommodating, we could wake up to find the world a much less hospitable place for the U.S. and our economic interests. On the other hand, if we're consumed with checking Chinese power, we put ourselves on a potentially destructive collision course.

I think this is why U.S. policy towards China has been something of a muddle - some parts balancing (such as the effort to forge closer ties to India), some parts accommodation (see the relatively muted executive branch response to China's currency manipulations). I think as China becomes more powerful and more assertive, it will be increasingly harder for Washington to strike this balance, in part because there is an influential swath of opinion in U.S. foreign policy circles that views any potential strategic challenger as an inherent and intolerable security threat.

Email | Print | Permalink | Comments | Share

Gady Epstein takes us through China's rapid response.

Email | Print | Permalink | Comments | Share

China launches a 24-hour English news network.

Email | Print | Permalink | Comments | Share

Mona Charon doesn't think so:

Americans, one suspects, pay far more attention to these global popularity contests than other nations. Can you imagine Vladimir Putin or Hu Jintao poring over these results? Ah, 50 percent of Germans have a favorable view of Russia compared with only 38 percent of Brazilians! Fifty-eight percent of Indonesians like the Chinese, but only 39 percent of Mexicans feel the same! Summon our image-makers!

I can't speak to Putin, but according to John Lee, Charon's suspicions are wrong about China. In the American Interest, Lee detailed how the Chinese do indeed spend a lot of time thinking about their global image and pay particular attention to how the U.S. is able to cultivate its "soft power" and global goodwill - all so that the Chinese rise to power will be viewed as a benign event.

Email | Print | Permalink | Comments | Share

Arvind Subramanian hails the decision by China's leaders to allow a gradual rise in the renminbi as a victory for the G-20:

But it is the fact of the G-20 that allowed Secretary Geithner to convert the China currency issue from a bilateral US-China matter (on which little progress had been made for many years) to one in which a broader set of countries had a stake. The public pronouncements by Brazil and India earlier this year re-inforced this “multilateralization” of China’s currency undervaluation. This multilateralization had two positive effects. It forced China to take more seriously the international consequences of its currency policy. And it also made the politics of changing policy easier because China is seen not as caving to bilateral pressure but as responding to the wider international community. Regardless of what happens at the G-20 Summit in Toronto over this week-end, the G-20 can already count the change in China’s currency policy as its victory.

The second implication is this: with China having made its contribution to global re-balancing, it is time to demand the same of Germany, which is the other large surplus country in the world economy, and which has just received a steroidal boost of competitiveness with the decline of the euro.

Email | Print | Permalink | Comments | Share

William Tobey writes about engaging China on North Korea:

Beijing fears instability, and rightly so. Military confrontations, refugee flows, and political turmoil are all to be avoided. But it is time China made a choice between a failed and cruel regime, and a modern, peaceful, and prosperous Korean Peninsula. The United States can stipulate that democratic reunification of Korea would diminish the need for U.S. ground forces -- and certainly not motivate any movement of U.S. troops toward China's border with Korea. It would also lessen imperatives for regional missile defenses and closer U.S. alliances with South Korea and Japan -- providing strategic reassurance to Beijing. Advance planning and coordination on refugee flows, economic dislocations, nuclear proliferation, and security issues would mitigate the dangers of instability.

On the other hand, if China continues abet North Korea, if it refuses to use its influence in productive ways, it should expect no further help in the form of international ransom payments to Pyongyang. If Beijing seeks to block effective action by other nations -- as it can do by wielding its veto as a permanent member of the United Nations Security Council -- responding to North Korea's demands should become Beijing's problem exclusively.

(AP Photo)

Email | Print | Permalink | Comments | Share

Mark Thirlwell says that China has encountered a "Lewisian turning point" -

The idea of a 'Lewisian turning point' derives from a classic 1954 paper by Arthur Lewis called 'Economic Development with Unlimited Supplies of Labour'. That paper is 'widely regarded as the single most influential contribution to the establishment of development economics as an academic discipline'. It also won Lewis the Nobel Prize in economics.

In it, Lewis developed a dual economy model to explain economic take-off in developing economies. In his model, developing economies comprise a capitalist sector and a subsistence sector, and economic development involves the transfer of labour from the latter to the former. Key to the model is the argument that 'an unlimited supply of labour may be said to exist in those countries where population is so large relatively to capital and natural resources, that there are large sectors of the economy where the marginal productivity of labour is negligible, zero, or even negative.'

Under these circumstances, the capitalist sector can tap this supply of under-employed (or surplus) labour from the subsistence sector, and moreover can do so at a constant wage. This allows a rising share of profits in national income. These profits are then re-invested in the capitalist sector, and the large supply of surplus labour means that this increased rate of profit and investment can be sustained, powering the transformation of the economy.

Eventually, a turning point arrives when the supply of surplus labour is exhausted, at which point wages start to rise, the rate of profit falls, and the rate of investment slows.

And what this means for China:

Some of the commentary to date has tended to focus on the potential implications for international supply chains and on the relocation of footloose manufacturing to economies where labour costs are lower. Other pieces have asked whether it could signal an end to cheap Chinese imports and a rise in the China Price (although some China analysts argue that the share of labour costs for many of China's exports is so low that any impact of even quite large pay rises will be very modest).

A more general point is that higher wage growth – and any consequent shift towards a higher wage share in China's national income – would be an important step forward both for China's own development and for the much-discussed objective of global re-balancing.

A China that earns more is going to be a China that spends more, which is in the long-run what everyone seems to want.

(AP Photo)

Email | Print | Permalink | Comments | Share

Freedom House has the "worst of the worst" list here. Four countries on the "worst of the worst" list - China, Cuba, Libya and Saudi Arabia - also sit on the UN Human Rights Council.

Email | Print | Permalink | Comments | Share

John Pomfret's article in the Washington Post about a Chinese general's "outburst" during the recently concluded bilateral talks serves as pretty good reminder of why the next decade or two are going to require some deft diplomacy:

On May 24 in a vast meeting room inside the grounds of the state guesthouse at Diaoyutai in Beijing, Rear Adm. Guan Youfei of the People's Liberation Army rose to speak.

Known among U.S. officials as a senior "barbarian handler," which means that his job is to deal with foreigners, not lead troops, Guan faced about 65 American officials, part of the biggest delegation the U.S. government has ever sent to China.

Everything, Guan said, that is going right in U.S. relations with China is because of China. Everything, he continued, that is going wrong is the fault of the United States. Guan accused the United States of being a "hegemon" and of plotting to encircle China with strategic alliances. The official saved the bulk of his bile for U.S. arms sales to China's nemesis, Taiwan -- Guan said these prove that the United States views China as an enemy.

U.S. officials have since depicted Guan's three-minute jeremiad as an anomaly. A senior U.S. official traveling on Secretary of State Hillary Rodham Clinton's plane back to the United States dismissed it, saying it was "out of step" with the rest of the two-day Strategic and Economic Dialogue. And last week in Singapore, Defense Secretary Robert M. Gates sought to portray not just Guan, but the whole of the People's Liberation Army, as an outlier intent on blocking better ties with Washington while the rest of China's government moves ahead.

The funny thing is that Guan is not wrong - at least, not about American strategy. While the Bush and Obama administrations have talked about (and often honestly worked toward) a constructive partnership with China, there is also a clear policy of hedging against China's rise. The U.S. fought hard to keep a military base in Japan and the Pentagon routinely invokes the People's Liberation Army as a threat (or "challenge") to which we must prepare for. Indeed, open any recent issue of a major foreign policy journal and you'll read about how China's military modernization is a threat to the U.S. Visit any conservative think tank and you'll hear how it is incumbent upon the U.S. to bolster our military in Asia to prevent Chinese military superiority from threatening our hegemony in the region.

In other words, Guan knows exactly what's going on. There is a natural and increasingly inevitable rivalry that is going to occur in Asia between two powers that insist that hegemony in the region is their right. It's a struggle that will almost certainly define the next two decades and, I'd argue, is significantly more important to American security and international peace than Iran's nuclear program.

(AP Photo)

Email | Print | Permalink | Comments | Share

John Pomfret's article in the Washington Post about a Chinese general's "outburst" during the recently concluded bilateral talks serves as pretty good reminder of why the next decade or two are going to require some deft diplomacy:

On May 24 in a vast meeting room inside the grounds of the state guesthouse at Diaoyutai in Beijing, Rear Adm. Guan Youfei of the People's Liberation Army rose to speak.

Known among U.S. officials as a senior "barbarian handler," which means that his job is to deal with foreigners, not lead troops, Guan faced about 65 American officials, part of the biggest delegation the U.S. government has ever sent to China.

Everything, Guan said, that is going right in U.S. relations with China is because of China. Everything, he continued, that is going wrong is the fault of the United States. Guan accused the United States of being a "hegemon" and of plotting to encircle China with strategic alliances. The official saved the bulk of his bile for U.S. arms sales to China's nemesis, Taiwan -- Guan said these prove that the United States views China as an enemy.

U.S. officials have since depicted Guan's three-minute jeremiad as an anomaly. A senior U.S. official traveling on Secretary of State Hillary Rodham Clinton's plane back to the United States dismissed it, saying it was "out of step" with the rest of the two-day Strategic and Economic Dialogue. And last week in Singapore, Defense Secretary Robert M. Gates sought to portray not just Guan, but the whole of the People's Liberation Army, as an outlier intent on blocking better ties with Washington while the rest of China's government moves ahead.

The funny thing is that Guan is not wrong - at least, not about American strategy. While the Bush and Obama administrations have talked about (and often honestly worked toward) a constructive partnership with China, there is also a clear policy of hedging against China's rise. The U.S. fought hard to keep a military base in Japan and the Pentagon routinely invokes the People's Liberation Army as a threat (or "challenge") to which we must prepare for. Indeed, open any recent issue of a major foreign policy journal and you'll read about how China's military modernization is a threat to the U.S. Visit any conservative think tank and you'll hear how it is incumbent upon the U.S. to bolster our military in Asia to prevent Chinese military superiority from threatening our hegemony in the region.

In other words, Guan knows exactly what's going on. There is a natural and increasingly inevitable rivalry that is going to occur in Asia between two powers that insist that hegemony in the region is their right. It's a struggle that will almost certainly define the next two decades and, I'd argue, is significantly more important to American security and international peace than Iran's nuclear program.

(AP Photo)

Email | Print | Permalink | Comments | Share

Looking back on the anniversary of President Obama's Cairo speech, Michael Rubin is troubled by the administration's freedom agenda - or lack thereof:

On this, the one-year anniversary of Obama’s Cairo speech, the silence of the Obama administration in the face of backsliding on rights, freedom, and liberty in Kurdistan, Turkey, and Arab states such as Egypt and Yemen, is deafening. In recent weeks, independent journalists in Kurdistan have begun to receive cell phone death threats (as Sardasht did before his murder). When they have gone to security to lodge complaints, the journalists are harassed. It is now only a matter of time until more journalists are whacked. The victims are not insurgents nor violent Islamists, but rather liberals and the best of the new generation. Obama’s inaction is dangerous because, when administration officials like assistant secretary of state Jeffrey Feltman or U.S. congressmen on a junket take their photos with Barzani, cynicism grows about perceived U.S. endorsement dictators; this in turn encourages anti-Americanism.

Many visitors describe their experiences in Iraqi Kurdistan as positive; my twenty-plus trips were. Certainly, Kurdistan shines compared to Baghdad if not, increasingly, Basra. The problem is that, on human rights, stability, and liberty, the trajectory in Iraqi Kurdistan is backwards. [Emphasis my own - KS]

To which Matt Duss retorts:

I don’t disagree with Michael here on the Obama administration’s lack of follow-through on the promise of the Cairo speech, which I’ve found deeply disappointing, or with his concern about the increasing oppression in Iraqi Kurdistan. Nor do I disagree that cuddling up to dictators encourages cynicism and anti-Americanism (though isn’t it interesting how conservatives can make such claims without being accused of “blaming America”?) As you can see from the photo at right (Bush shaking hands with Barzani), Bush himself knew quite a bit about cuddling up to dictators.

I do disagree, however, with his use of “backsliding” here, as if George W. Bush left the region on a pro-democracy trajectory, which he most certainly didn’t.

How about we cut both presidents some slack, and accept the fact that American officials are going to do the occasional photo-op with thugs, dictators and generally bad people? This strikes me as yet another example of American interests and rhetoric being in conflict. The potential to look foolish and hypocritical will always exist so long as the United States is in the business of everyone else's business.

The United States decided back in 2003 that the overall stability of Iraq was a long-term strategic interest in the War on Terrorism, and we've lost thousands of lives and billions of dollars in securing that supposed interest. Indeed, the very idea behind the strategic recalibration known as "The Surge" was to give all of Iraq the breathing room it required in order to become more like Kurdistan.

Can Washington rightfully turn around then and demand that Iraqi Kurdistan be freer-er? Is that consistent with the overall, long-term investment the United States has made in Iraq?

Even setting aside the freedom agenda, at what point must the United States decide that the business of global trade and commerce permits only a limited amount of rhetoric regarding freedom and democracy? Were all of the world's resources conveniently positioned under the world's democracies this wouldn't be so difficult. Sadly, this isn't the case. (Setting aside China's economic growth as compared to our more democratic allies in Europe.)

Take a step back and look at what, where and who the United States is in bed with around the globe, and then tell me that it's the American president's job to prevent journalists from receiving death threats in Iraqi Kurdistan. This is of course a terrible situation, but doesn't our executive have more pressing matters to attend to?

Dictatorships and otherwise isolated regimes have the luxury of rhetorical rigidity. America does not. Interests and rhetoric are colliding, and one may eventually have to give. So which will it be?

UPDATE: Evan Feigenbaum points out how China has its own problems in this area.

Email | Print | Permalink | Comments | Share

In the past couple of weeks, two important documents have been released by NATO and the U.S. government. Insofar as China is concerned, these strategic reports make it clear that the "China threat" is, in fact, not perceived as such a threat by those currently in power in the U.S. and Europe.

First, a NATO short piece called "NATO 2020: Assured Security; Dynamic Engagement", which is supposed to be a major redefinition of NATO strategy for the coming decade. China is unequivocally viewed as having strong interests in a stable regional and global order. Some key quotes:

"Emerging global powers such as China, India and Brazil are asserting their rising influence in a peaceful manner."

"In the Asia-Pacific, the major powers, which include Japan, the Republic of Korea, China, India, and Australia, all view regional stability as in their interests and are generally supportive of international norms."

Moreover, the report goes on to say that working with China does not require a formal alliance or organization in which to have dialogue and cooperation -- the anti-piracy action is cited as an example.

A week later, the White House released its National Security Strategy (PDF). China is first mentioned as an increasingly influential actor in international politics with whom the U.S. should be "building deeper and more effective partnerships." Indeed, in every context in which China is mentioned, the tone and verbiage stress cooperation and engagement, particularly in areas of mutual interest.

The report only goes on at length about China for a single paragraph, which is instructive:

"We will monitor China’s military modernization program and prepare accordingly to ensure that U.S. interests and allies, regionally and globally, are not negatively affected. More broadly, we will encourage China to make choices that contribute to peace, security, and prosperity as its influence rises. We are using our newly established Strategic and Economic Dialogue to address a broader range of issues, and improve communication between our militaries in order to reduce mistrust. We will encourage continued reduction in tension between the People’s Republic of China and Taiwan. We will not agree on every issue, and we will be candid on our human rights concerns and areas where we differ. But disagreements should not prevent cooperation on issues of mutual interest, because a pragmatic and effective relationship between the United States and China is essential to address the major challenges of the 21st century."

This doesn't sound like an American government that is particularly worried about China. It actually sounds very much like the Obama campaign's original position on China. The last line, in particular, makes clear that any disagreements should take a back seat to a positive relationship. So, despite the various issues of contention that have popped up in the past 16 months, the White House seems to have kept the "China threat" at a minimal level of anxiety. This suggests that actors within the U.S. government who might paint the picture otherwise -- like some Pentagon officials or Congressmen -- have not gained the upper hand in Administration deliberations.

Taken together, do these two reports mean that the next five to ten year will undoubtedly be free of conflict (armed or otherwise) between the U.S. and China? Not necessarily. A flash point could arise over Taiwan or Korea or some other unforeseen issue. But what these two documents clearly suggest is that, at least in the West, there is very little desire to ramp up security dilemmas, real or otherwise, with China.

Instead, China's continuous rise is viewed as an opportunity for economic growth, like Obama's goal to double exports for 2014. And unless you're really aching for a quick way to waste money and political capital on a hegemonic conflict, this perception should be (at least somewhat) comforting.

(AP Photo)

Kevin Slaten was a junior fellow in the China Program at the Carnegie Endowment for International Peace. Now, he lives in Taiwan on a Fulbright Grant. His opinions in no way reflect the views of the State Department or Foundation for Scholarly Exchange. He blogs at http://www.kevinslaten.blogspot.com/.

Email | Print | Permalink | Comments | Share

It's widely acknowledged that if any country has the leverage to talk North Korea off the ledge, it's China. The Wall Street Journal spoke to U.S. officials recently back from meetings with the Chinese to give us a flavor of what the Chinese really think of their unruly neighbor:

China's official views on North Korea have appeared divided, say the U.S. officials, who said they spent "hours" during their visit trying to gain China's insights into North Korea's recent actions and the mindset of its ailing leader, Kim Jong Il. "The Chinese seem frustrated" with Mr. Kim, said a senior U.S. official who took part in the talks.

Many Chinese analysts say they believe leaders in Beijing have grown exasperated with Mr. Kim, who embarrasses them with his nuclear theatrics and has shown little inclination to copy Chinese market-led overhauls, though Beijing has tried to dazzle him with tours of showcase cities and development zones.

Beijing's differing views on the North appear to be based both upon the age of Chinese officials and their place in government. One U.S. official said older Chinese officials who dealt with Mr. Kim's father, Kim Il Sung, remember him as largely predictable and responsive to Chinese influence. "He was more pliant," the official said they were told. Kim Jong Il, in contrast, appears to the Chinese as unpredictable and elusive.

Two great qualities to have in a leader of a nuclear-armed garrison state.

(AP Photo)

Email | Print | Permalink | Comments | Share

Austin Ramzy reports on the underside of China's economic boom:

The massive Foxconn factory in the southern Chinese city of Shenzhen is known for assembling famous electronic goods like Apple's iPhone and iPad. But in recent months it has gained a darker image, as a place where distraught workers regularly throw themselves to their deaths. The latest fatality came on Tuesday morning, when a 19-year-old employee died in a fall in the company's Shenzhen compound, according to the state-run Xinhua news service. He was the ninth worker this year to have died in a fall from factory buildings on Foxconn's properties in Shenzhen; two have survived suicide attempts, according to state-media reports. Another teenager, who the company revealed this month died after jumping from a company building in Hebei province in January, brings the total employee death toll from falls to 10 this year.

This is something you occasionally read about with respect to higher-level management in some Asian companies, but as Ramzy notes, the suicidal urge has struck lower-level factory workers, not the hyper-stressed upper management.

In other Chinese economic news, the Chinese steel firm Anshan is looking to invest in several U.S. facilities. Thomas Barnett thinks the Chinese are finally learning to play the game like the Japanese did:

I've told this story on China for a couple years now in the brief: Japanese cars used to be keyed in Indiana parking lots years ago. Why? This is Big 3 production territory. It doesn't happen today. Why? Toyota and Honda have IN plants now.

Email | Print | Permalink | Comments | Share

Roger Cohen is frustrated by the Obama administration's reaction to the Turkish-Brazilian nuclear fuel deal with Iran:

Brazil and Turkey represent the emergent post-Western world. It will continue to emerge; Secretary of State Hillary Clinton should therefore be less trigger-happy in killing with faint praise the “sincere efforts” of Brasilia and Ankara.

The West’s ability to impose solutions to global issues like Iran’s nuclear program has unraveled. America, engaged in two inconclusive wars in Muslim countries, cannot afford a third. The first decade of the 21st century has delineated the limits of U.S. power: It is great but no longer determinative.

Lots of Americans, including the Tea Party diehards busy baying at wolves, are angry about this. They will learn that facts are facts.

This strikes me as somewhat contradictory. Cohen laments the Obama administration's rejection of the fuel swap deal - which he concedes is an insufficient deal that fails to meet the Western demands put forth last year - because 1. You don't want to hurt feelings in Ankara and Brasilia, because they are emerging powers whom you might need down the road, and 2. this deal, while well short of the October arrangement, may have served as a "tenuous bridge between "mendacious" Iranians and “bullying” Americans."

First, the latter point: Spinning a deal for the sake of public perception and reaching a substantive deal are obviously two different things. Cohen asserts that this deal would've been a huge P.R. victory which, I suppose, it could have been. But if the administration is serious about nonproliferation it was necessary to knock this deal down right out the gate - which it apparently did.

And spin spins both ways. While Washington and the West certainly could have spun this deal to their advantage, so too could have the Iranians - as they already have. The whole point of this deal was not only to build trust between Tehran and Washington, but to assuage Western and regional concerns about Iranian enrichment. This week's trilateral deal fails to do that, and thus it fails to actually take time off the so-called Doomsday Clock.

In other words, accept this deal and you basically gave Iran seven months to set the terms of negotiation while rebuffing your own immediate concerns. Clenched fist, check.

As for Brazil and Turkey, what exactly was Obama to do? Accept the deal, and you accept the Turkish-Iranian argument that the deal represents the death knell of sanctions, which the U.S. never agreed to and never will. Cohen may view this deal as a beginning, but Tehran and Ankara are spinning it differently. And as Greg noted yesterday, China and Russia simply matter more than Brazil and Turkey do, especially on the matter of Iranian proliferation.

Will this hurt U.S. efforts down the road when, at some unforeseen moment, Washington needs Ankara or Brasilia? Perhaps. But that's the point: A multi-polar world doesn't guarantee a less divisive one where everyone gets along and hugs out their problems. Quite the contrary.

For much of the 20th century - and the first few years of the 21st - American power was rather easy: Either you're with us, or you're with the evildoer behind door #1. Make your choice. There was a kind of cold clarity in this arrangement, and in some ways the U.S. excelled at it. But as other powers emerge, they also come to the table with years - decades, even - of experience at playing a weaker hand inside global institutions like the UN. They know how to check the maneuverings and desires of other states, just as they too have been checked.

Washington isn't very good at this game, and it's going to take some time for the United States to rebuild capital and use its still preponderantly stronger military and economy to its advantage. This may require a more prudent, interests-based foreign policy designed to keep larger powers in your corner - which, in turn, will mean less peripheral meddling in said powers' backyards.

So will Ankara and Brasilia remember this? Probably. Welcome to the new world order.

UPDATE: Larison offers his thoughts on the matter.

(AP Photo)

Email | Print | Permalink | Comments | Share

Washington may hype having gained China’s support for a fourth round of United Nations Security Council sanctions on Iran, but Beijing’s leaders still seem to be working with their counterparts in Tehran to make existing and future attempts at tightening Iran’s access to global finances meaningless.

A report (in Persian) by the Fars News Agency confirms fears that China continues playing both sides of diplomatic and economic fences between the United States and Iran. While publicly appearing to go along with the much watered-down draft of sanctions, China has also agreed to "finance U.S. $1 billion for municipal and civic construction in the city of Tehran."

Essentially, the standoff between the West and Iran continues to play into Beijing’s hands. What if anything the United States and its allies can do remains unclear and possibly hopeless.

With friends like China, it is not surprising that Ahmadinejad and his cohorts dismiss the proposed set of sanctions as having "no legitimacy at all," even if adopted by the Security Council.

These developments highlight, yet again, that it is unrealistic to expect other nations to view multinational issues in the same light as the United States does. Attempts at resolving ongoing tensions with Iran in America’s favor, alas, continue demonstrating the escalating limits of Washington’s influence on a world stage where many nations are jousting for power.

Email | Print | Permalink | Comments | Share

Just as Copenhagen was a visible demonstration of the rising clout of China, the recent nuclear diplomacy by Turkey and Brazil was still more evidence that the leadership role so coveted by the U.S. is being undermined by the rise of economic powers with divergent security interests. Unlike in Copenhagen, though, it looks as though the U.S. was able to rebuff this "rogue" diplomacy. Matt Duss, for one, is unhappy:

It’s clear that Iran saw the announcement of the deal as a way to head off international pressure. But that doesn’t mean that its acceptance of the terms isn’t significant — it is. In my view, it would have been smarter for Obama to acknowledge the deal as a potentially positive step, but make clear that more is needed, similar to how he pocketed Netanyahu’s sort-of-but-not-really acceptance of a Palestinian state last year. As it is, by scrambling to get the UN sanctions resolution finalized in the shadow of the Brazil-Turkey intervention, that resolution now looks much more like an end in themselves, rather than a means to arriving at a mutually acceptable agreement.

But that's the problem: there is no mutually acceptable agreement here.

It will be more interesting to watch how China and Russia move. The Brazil/Turkey gambit has given both China and Russia clear cover now to balk at sanctions, even watered-down ones. If they don't, it means the Obama administration has gone a long way in winning them over (invalidating Duss' fear of diplomatic blow-back). Not that it will do much good. But you take the victories where you can get them, and I think China and Russia matter more to Iran than Brazil and Turkey.

(AP Photo)

Email | Print | Permalink | Comments | Share

The South Koreans will formally announce that North Korea was behind the sinking of the Cheonan.

The Washington Post reports:

South Korea will request that the U.N. Security Council take up the issue and is looking to tighten sanctions on North Korea, the officials said. The United States has indicated it would support such an action, U.S. officials said. Japanese Foreign Minister Katsuya Okada told his South Korean counterpart on Monday that Japan would do the same, the Japanese press reported Tuesday.

Another consequence of the report, experts predicted, is that Lee will request that the United States delay for several years a plan to pass operational control of all forces in South Korea from the United States to the South Korean military. Approximately 28,500 U.S. forces are stationed in South Korea.

South Korea's conclusion that North Korea was responsible for the sinking of the Cheonan also means it is unlikely that talks will resume anytime soon over North Korea's nuclear weapons program. North Korea has twice tested what is believed to be a nuclear weapon. China has pushed for an early resumption of those talks, but South Korean officials said they will return to the table only after there is a full accounting for the attack against the Cheonan and a policy response.

Scott Snyder analyzes South Korea's response:

Finally, the Lee administration made an early bet that internationalizing the Cheonan response would be the most effective South Korean course of action. Involving international investigators shields the South from accusations that the investigation is biased, but thus far it appears to have yielded little political influence with China, who has applauded South Korea’s decision to undertake a “scientific and objective investigation.” Furthermore, China’s decision to host Kim Jong Il less than a week following Lee Myung-bak’s visit was taken very poorly in Seoul, potentially revealing the limits of South Korea’s internationalization strategy. China is unlikely to accept condemnation of North Korea at the UN Security Council without a “smoking gun” that directly links North Korea to the Cheonan incident.

South Korea’s international approach casts China as the enabler of North Korean provocations. South Korea’s approach attempts to impose potential costs on China as a proxy for South Korean inability to impose costs directly on North Korea. In this approach, China’s failure to rein in North Korea will have costs to China’s interests on the Korean peninsula (as enumerated in my recent CSIS report with Bonnie Glaser on the need for Sino-U.S.-ROK dialogue to plan for instability in North Korea) in the form of increased South Korean public hostility toward China, increased regional tensions on China’s periphery, and by making China North Korea’s guardian at the UN. It remains to be seen whether South Korea’s post-Cheonan diplomacy will influence China’s approach to the peninsula.

Much has been made of China's "soft power" push in Asia, but alienating Japan and South Korea to curry favor with North Korea doesn't seem like a sustainable strategy to me.

(AP Photo)

Email | Print | Permalink | Comments | Share

Dan Blumethal has a thorough post examining the implications of China's growing naval strength and what America's response should be:

Taiwan's importance is the same as the importance of our Japanese, South Korean, and Philippine allies -- more geopolitical than geostrategic. These countries have embraced the international system that the United States created and defended after World War II. They are democratic states with free market economies that all want to be part of what used to be called the "West," the worldwide club of modern, advanced industrial democracies. Washington's interests are better served when economically vibrant democracies are free from the control of other great powers - this better ensures that the international system remains hospitable to us.

In my opinion, for geopolitical as well as geostrategic reasons, the United States military should maintain a (more defendable) presence on the territory of as many U.S. Asian allies as welcome it, at least until all can be assured that China will be a responsible and democratic great power, uninterested in creating its own exclusive economic or military spheres. That means we need to work harder to help our allies build capabilities that help frustrate China's military plans rather than pulling back and relying mostly on offshore bases.

To rephrase this, Blumenthal thinks we should engage in a massive Asian arms race until:

*China is "responsible"
*China is "democratic"
*China does not want "exclusive economic or military spheres"

Of all these conditions only one - a closed economic sphere - strikes me as something worth attempting to stop. I have no idea what being "responsible" means in this context but if it's a proxy for "doing what Washington says to do" then good luck with that. As for democratic, that's irrelevant. If China doesn't want to wage war on her neighbors or carve out exclusive economic zones in which we can't participate it, that should be enough for American policy.

As for a "military sphere" this is another way of saying that America must be the strongest military power in Asia (i.e. that it remains an "American sphere"). Such a strategy is plausible if we're counting the aggregate power of our allies and, crucially, we're not trying to sustain a similar posture everywhere else. Otherwise we're just going to accelerate our own bankruptcy and decline.

Finally, there is the idea that China will want to create a "closed" economic zone - precisely where and how this would occur and what material impact it would have on the U.S. isn't really specified, but isn't this rather important to spell out? It's been noted before but China is only growing powerful because it is participating in the open international economy (including trade with the U.S.).

Still, I think it's only proper to look 20 years down the road and hedge against the possibility that China, having grown strong off the system, would seek to fundamentally upend it. But it would be nice if advocates of a "preemptive containment" of China could state the case a bit more concretely.

(AP Photo)

Email | Print | Permalink | Comments | Share

There have been a spat of stories detailing the growing power and assertiveness of China's navy and the natural question of whether this portends a kind of great power clash with the U.S. in the not-so-distant future.

Abe Denmark writes in Wired about the modernization and "aggression" of the Chinese navy in the South China Sea. At the Federation of American Scientists' blog, Hans M. Kristensen discovers a new Chinese naval demagnetization facility for its submarine fleet, proof of the country's growing capability. Meanwhile, Stephen Walt draws a comparison between China's increasing regional assertive and the Monroe Doctrine. As a growing China pursues the natural course for a budding great power in expanding its influence, Walt argues, security competition with the U.S. is inevitable.

I'd say that sounds right, but Hugh de Santis reminds us that China's neighborhood is far less accommodating to a great power rise than the Western Hemisphere was to the U.S.:

Although China’s neighbors have prospered from its economic rise, they are having second thoughts about its intentions. As Asian production networks become more integrated, members of ASEAN (the Association of Southeast Asian Nations) that warmed to the idea of the China-ASEAN Free Trade Agreement when it was proposed in 2001 are beginning to worry that they will be reduced to economic appendages of Beijing.

This is especially true of Thailand and Malaysia, whose exports must compete with similar and often cheaper goods from China. But even countries rich in commodities that China covets are voicing concerns, including those in mainland Southeast Asia. Chinese plans to mine bauxite in Vietnam have provoked considerable domestic criticism. Cambodia too is wary that Beijing will eventually acquire their land and water rights. Though it relies on China for money and arms, the military junta in Burma is also hedging its bets by increasing contacts with India and the United States. And Indonesia, a major beneficiary of Beijing’s ravenous demand for raw materials, has gone so far as to delay implementation of the FTA because it fears that it may put pay to its steel and textile industries.

More than its economic penetration of the region, it is China’s growing self-confidence and muscle-flexing that has aroused fears in its neighbors that its ultimate objective may be hegemony rather than harmony.

I ultimately think China's neighborhood will act as the best check on any "hegemonic" ambitions the country might harbor.

(AP Photo)

Email | Print | Permalink | Comments | Share

In international institutions, China scored big diplomatic points this weekend.

Interestingly enough, while this is ostensibly a move motivated by economics, Robert Zoellick uses words more closely associated with power politics, like "polarity," than with political economy.

For more videos on topics from around the world, check out the Real Clear World videos page.

Email | Print | Permalink | Comments | Share

The Lowy Institute's Michael Wesley pours some cold water on the idea:

Today's US and China are not the same as America and the Soviet Union during the Cold War. The US and the USSR were superpowers, a word that's used so much these days that many have forgotten its original meaning: a power so much larger than all other types of state that collectively they would be no match for it. With this sort of power lead, any sudden change in relations between Washington and Moscow – for better or worse – had a decisive effect on world politics.

America and China do not possess that kind of power gap with other classes of states. Unlike just after the Second World War, today the rest of the world is much richer and much better armed.

Furthermore, the Cold War was driven by ideology as much as by power. Today, America and China do not represent powerful, universalist ideologies that speak to the development and doctrinal issues that confront many of the world's societies. Neither state can meaningfully be said to have ideological followers that see the other state and the doctrine it represents as an existential threat to their way of life.

I'd say that many politicians and analysts in America would vigorously contest that last point. America, they would argue, does represent a universalist ideology. Indeed, many of the strongest proponents of that notion believe we cannot live securely in a world populated with political systems that do not share our views and thus have a positive obligation to go forth and spread the revolution. Granted, this idea does not seem to have many takers in the current administration - but administrations change.

We also can't predict how China will ultimately behave as (if?) it continues to close the power gap with the United States.

(AP Photo)

Email | Print | Permalink | Comments | Share

Perhaps the most common refrain from the folks in Congress and the punditocracy who are demanding a drastic appreciation in China's currency (the RMB) is that the revaluation is absolutely necessary to reduce the "dangerous" US-China trade deficit.  These currency hawks' underlying reasoning is simple: China's allegedly undervalued currency makes Chinese imports to the US cheaper and American exports to China more expensive, thus creating a woefully-distorted bilateral trade imbalance as compared to a situation in which both the RMB and USD "floated" based on market conditions.  (See here and here for examples of this rhetoric.)

Assuming for a moment that the RMB is significantly undervalued, and that the bilateral trade deficit (or any trade deficit) is a problem for the US economy, there remains a very serious question of whether any sort of RMB appreciation, based on market factors or otherwise, will actually affect the US-China trade balance.  The currency hawks certainly think so (it's their raison d'etre), but many scholars (and your humble correspondent) disagree, pointing to the recent history of the RMB and the US trade deficit, the past experiences of Japan's currency appreciation versus the dollar, and, of course, lots of economic analysis and modeling of structural factors in both the US and China - all of which strongly argue against the theory that RMB appreciation is some sort of "silver bullet" for the bilateral trade deficit.  Indeed, a very interesting new study released by the Centre for Economic Policy Research provides even more such evidence (and a lot of other good stuff).

Unsurprisingly, currency hawks like Paul Krugman have brushed these sound criticisms aside, arguing that they fail to capture current market realities (or something).  A story in Thursday's Wall Street Journal, however, provides very strong support for the currency skeptics' arguments about the disconnect between nations' currency policies and their bilateral trade balances - this time from what is arguably China's largest competitor, India. 

Continue reading "India Debunks the Currency Hawks" »

Email | Print | Permalink | Comments | Share

Bolivian President Evo Morales is holding a star-studded climate change soiree in Cochabamba, which he claims:

will give a voice to the poorest people of the world and encourage governments to be far more ambitious following the failure of the Copenhagen summit.

So concerned is Evo with the plight of the poor that he's buying himself a jet built for the Manchester United team:

Bolivia's Treasury Minister Luis Arce says the government is negotiating to buy a French Falcon 900 jet built for the needs of Britain's Manchester United. The price: $38.7 million.

The British soccer team declined to purchase the jet after it was finished, so Morales rushed to buy it, according to Agence France Presse, which also reports that Morales will have another jet, a $40 million Antonov BJ financed through a military credit from Russia.

Morales has been busy this month. While tightening his grip over the country following local elections earlier this month, Morales had recently accepted the third donation of military equipment from China.

Perhaps Evo will fly his Chinese friends and his celebrity friends to the inauguration of the Bolivian Space Agency's new satellite: China and Bolivia are working on a $300 million joint satellite project:

According to Bolivian Public Works Minister Walter Delgadillo, the satellite has a maximum capacity of the DFH-4 model that will enable it to cover not only Bolivia but also the whole Latin America.

China had previously helped Venezuela launch a satellite in 2008.

(AP Photo)

Email | Print | Permalink | Comments | Share

Is China destroying, or creating, American jobs? Two piece from the Internets today make opposing claims.

C. Fred Bergsten says destroying:

If China eliminated its currency misalignment and thus cut its global surplus to 3 to 4 percent of its GDP, that would reduce the U.S. global current account deficit $100 billion to $150 billion. Every $1 billion of exports supports about 6,000 to 8,000 (mainly high-paying manufacturing) jobs in the United States. Hence, such a trade correction would generate an additional 600,000 to 1.2 million jobs. Correcting the Asian currency alignment is by far the most important component of U.S. President Barack Obama's new National Export Initiative. Its budget cost is zero, which also makes it by far the most cost-effective possible step to reduce the unemployment rate and help speed economic recovery.

Such exchange-rate realignment is not without precedent. In 2005, Beijing announced a new "market-oriented" exchange-rate policy and let its currency appreciate 20 to 25 percent. In mid-2008, however, China repegged to the dollar, and the renminbi has ridden it down, taking back about half the previous rise. China has doubled the scale of its currency intervention since 2005, now spending $30 billion to $40 billion a month to prevent the renminbi from rising; on this metric, its currency policy is about one-half as "market-oriented" as when it announced such a strategy five years ago.

Daniel Griswold says China is a large market for U.S. exports:

Regardless of its currency regime, China has been the hottest major export market for U.S. companies in the last decade.

Since China began to gradually appreciate its currency in 2005, U.S. exports to the Asian giant have shot up by 69%, according to the U.S. Commerce Department. That compares to a much more sluggish 19% increase in exports to the rest of the world.

Export of U.S.-manufactured products was up 47% during that same period, compared with an anemic 7% increase to the rest of the world. China alone accounted for half of the dollar-value increase in durable goods exports, led by civil aircraft, semiconductors and industrial machinery.

U.S. farmers have enjoyed great success in China's market. Since 2005, U.S. agricultural exports to China have more than doubled, from $5.7 billion to $13.8 billion. Farm exports to China have been growing three times faster than farm exports to other countries. China now buys more than half of U.S. soybean exports.

If American exports of goods and services had enjoyed the same rate of growth in the rest of the world as they have in China since 2005, U.S. exports would have increased by an additional $600 billion during that period.

Email | Print | Permalink | Comments | Share

As we read about the upcoming Shanghai Expo, we're constantly amazed by the seemingly unreal scale of construction. The city has spent $45 billion U.S. to prepare for scores of pavilions to be spread out over 1,300 acres and welcome some 70 million visitors over six months. And many of the pavilions are massive works of architecture in and of themselves, costing some countries well over a hundred million dollars, like Japan's "Purple Silkworm", which has a price tag of $133 million U.S.

Many compare this massive investment to Beijing's preparations for the 2008 Summer Olympics. But what many fail to ask is, like Beijing's ghost stadiums today, what happens to all of these concrete mammoths when the Expo is over? Some will be reduced to whence they came, like the UK's pavilion, which will be distributed in pieces to UK and Chinese schools.

Others, though, are built permanently. The hope is that it will bring people to Shanghai for years to come, hoping to glance at the legacy of the the largest World Expo in history. But empty buildings will only retain their energy for so long, and the initial wonder will die off as Oct. 31 fades into the past.

One hopes that city officials in Shanghai, compared to their Beijing counterpart, have a better long-term transition plan for their two-square mile concrete graveyard.

Kevin Slaten was a junior fellow in the China Program at the Carnegie Endowment for International Peace. Now, he lives in Taiwan on a Fulbright Grant. His opinions in no way reflect the views of the State Department or Foundation for Scholarly Exchange. He blogs at http://www.kevinslaten.blogspot.com/

Email | Print | Permalink | Comments | Share

By Patrick Chovanec

The news that China ran a $7.2 billion trade deficit for the month of March (its first in six years) must strike people as surprising, given all they’ve heard about China running chronic trade surpluses. But you need to put it in context. China’s exports every year are highly seasonal — they peak in the fall, when Christmas orders are being shipped, and drop in the spring. So China’s trade surplus usually declines in the spring, and it’s not unprecedented for it to run a one-month deficit even in a year when it ends up running a sizeable trade surplus. The last deficit took place in April 2004, a year in which China went on to rack up a then-record $32 billion surplus.

What tipped this month’s figure from a marginal surplus to a deficit was a surge in imports, up 66% from last year. But it going to be important to drill down and take a closer look at exactly what’s making up those imports. If they are finished consumer goods, then it could be a sign of rising consumption in China and a shift towards more balanced trade. But if they consist mainly of raw materials, as many economists suspect, it could indicate that Chinese manufacturers are gearing up for a surge in exports later this year (a phenomenon compounded by rising commodity prices for inputs like iron ore and crude oil, in part due to rising Chinese demand).

The key question is, is this a trend or a cycle? Is it a trend towards higher domestic consumption and more balanced trade, or part of a production cycle that leads right back to where we started? I’m not convinced yet this is a trend.

There’s a lot of speculation that China may use news of this month’s trade deficit to fend off US pressure to strengthen the RMB, arguing that it is making progress in restructuring its economy and boosting domestic demand. But if this is part of a cycle, as many suspect, and China goes right back to running trade surpluses in a month or so, that argument’s not going to have much staying power. That’s probably why even Chen Deming, China’s Minister of Commerce (who has been very vocal these past few weeks about the damage a stronger RMB could do to exporters) is being careful not to overplay the news, describing the March trade deficit as “a blip on the radar screen” that may soon be reversed.

The key thing to watch, regarding China’s willingness to strengthen the RMB, is the recovery of China’s exports. They’re up just over 20% from last year, but that’s just barely back to the level they were at before the global financial crisis struck. With Chinese exporters already struggling, China’s leaders have been reluctant to hit them with a “double whammy” in the form of a less competitive currency. If exports continue their recovery, though, that will give the Chinese a lot more comfort in moving towards a more flexible exchange rate.

----
Patrick Chovanec is a professor at Tsinghua University's School of Economics and Management in Beijing, China. He blogs at http://chovanec.wordpress.com/

Email | Print | Permalink | Comments | Share

Ben Simpfendorfer sees evidence that the Middle East is looking approvingly at the "China model" of development:

To be fair, China has fewer ethnic problems relative to the Middle East. Ninety-two percent of its population is Han Chinese. Its largest minority, the Zhuang Chinese, account for a little over one percent. That makes it easier to delay questions of political identity than it would be for either Iraq or Syria.

Nonetheless, China illustrates that it is possible to leave the tough questions until later. I raised just this point at the Arab Thought Foundation’s conference noting that Taiwanese investors have built factories on the mainland not far from the Chinese missile silos pointing back at Taiwan.

It might that some countries are already learning. Syria, for instance, has pushed ahead with economic reform even if political reform remains stagnant. President Assad has talked of the “China Experiment”, and Syrian officials have made study trips to China to learn more about its success.

The Chinese are also bringing their pragmatism to the Middle East. Haixin, for instance, is an air-conditioning company that has recently built a factory near Cairo. I remain hopeful that others will follow, ignoring the region’s complex political problems that are more likely to deter Western companies.

It would be wrong to only praise China. Its pragmatism could equally be labeled mercantilism. As an Arab observer, based in China, recently wrote in Al Sharq Al Awsat, “a mentality of profit rules over Chinese officials”, and that for all China’s talk of increasing its imports from the Middle East, little has been achieved.

Email | Print | Permalink | Comments | Share

Writing in the Oil Drum, Chris Clugston makes the case that our supply of "non-renewable natural resources" (NNR) are increasingly scarce, posing a huge risk to the 1-billion plus people around the world living high on the industrial lifestyle. It sounds intuitive enough: there is only so much Earth and only so many extractable resources. The situation in the U.S. looks particularly grim:

A US NNR Scarcity Analysis was conducted to assess the incidence of NNR scarcity associated with fifty eight (58) NNRs in the United States.17 The salient findings:

* Annual US production levels associated with 50 of the 58 analyzed NNRs have reached their geological US peak production levels;
* Twenty five (25) of the 58 analyzed NNRs are no longer being produced in the US at all;
* The US currently imports some quantity of 46 of the 58 analyzed NNRs; and
* For 18 of the 58 analyzed NNRs, the US imports 100% of its current annual utilization level.

America has been able to supplement its continuously decreasing domestic NNR production levels—thereby forestalling fatal NNR supply shortfalls—by:

* Importing ever-increasing quantities of NNRs from foreign nations;
* Outsourcing US manufacturing operations to foreign offshore locations, thereby utilizing foreign NNRs; and
* Becoming a net importer of foreign goods and services, thereby utilizing foreign NNRs throughout the product/service production and provisioning processes.

Clugston also notes:

The salient findings associated with the assessment: 50 of the 57 analyzed NNRs (88%) experienced global scarcity during the 2000-2008 period; 23 of the 26 analyzed NNRs (88%) will likely experience permanent global supply shortfalls by the year 2030.

At the end of the day, we are not about to “run out” of any NNR; we are about to run “critically short” of many. This reality will have a devastating impact on our industrial lifestyle paradigm.

If that is indeed the case, it would also put huge strains on our foreign policy, particularly with the one nation that's been aggressively shoring up its access to raw materials. But that's not to say everything is peachy in China either. Elizabeth Economy notes that China is enduring a major drought right now:

While China often confronts serious seasonal droughts—last year northern China experienced the worst winter drought in 50 years, costing the region 50 percent of its agricultural output—this year’s drought has hit even the typically water-rich southern provinces. According to one report, 600 rivers in southern China have simply dried up.

(AP Photo)

Email | Print | Permalink | Comments | Share

Reflecting on the watered down sanctions that will likely be issued by the United Nations over Iran's nuclear program, Will Marshall writes:

All this suggests we’re in for protracted haggling in the Security Council over language that, in the end, probably won’t induce the Islamic Republic to stop enriching uranium in defiance of UN strictures. The fundamental problem is not that China is indifferent to nuclear proliferation or intent on “protecting” a valuable trading partner. The fundamental problem is that China doesn’t seem ready yet to assume the responsibilities of global leadership, as we would define them.

From Sudan to Iran, China puts the amoral pursuit of its own interests – in these cases, assuring access to the energy it needs to fuel its rapid growth – ahead of larger conceptions of international cooperation and order, or even its own undoubted interest in stemming nuclear proliferation. The idea of “enlightened self-interest” that underpins U.S. internationalism has an unnatural and vaguely sinister ring to officials in the Middle Kingdom. For now at least, it’s hard to imagine the historically self-contained and inward-looking Middle Kingdom spending trillions of renminbi, say, to support a Pacific analogue to NATO, or an architecture of international institutions dedicated to collective problem-solving. [Emphasis mine.]

I often wonder what American commentators would be saying if the shoe were on the other foot and the U.S. was the rising power and China the dominant one. Would we argue that, for all its faults, the Chinese-led international order was the best for America's interests and that, when America's commercial interests conflicted with Chinese priorities, the U.S. should subsume her interests to further China's agenda.

I suspect no American politician would touch that rhetorical framework with a hundred foot poll and yet we expect the Chinese to essentially swallow that line.

(AP Photo)

Email | Print | Permalink | Comments | Share

Last week I highlight a Michael Lind piece which argued as much. Philip Levy cites a study that argues just the opposite. Cato's Daniel Ikenson also dove into the issue:

Although the Chinese currency appears to be undervalued, the evidence suggests that appreciation will not reduce the bilateral trade deficit. Between July 2005 and July 2008 the renminbi rose 21% against the dollar, to $.1464 from $.1208, where it had been pegged since 1997. But the trade deficit, according to the trade statistics compiled by the U.S. Census Bureau, nevertheless increased to $268 billion from $202 billion over that period.

Textbooks say that the Chinese should increase purchases of American products when the renminbi's value increases against the dollar — and indeed they did by $28.4 billion. But exports to China were already increasing rapidly before the currency began to appreciate, rising by $19 billion between 2002 and 2005, according to the Census Bureau.

Textbooks also predict that Americans will reduce their purchases of Chinese products in response to an appreciating renminbi. But U.S. imports from China between 2005 and 2008 actually increased by a whopping $94.3 billion, or 39%.

Email | Print | Permalink | Comments | Share

AEI's Michael Auslin had an article on Fox News arguing that Japan's unwillingness to host a marine base in Okinawa, Britain's skeptical take on the "special relationship" and the recently passed healthcare legislation spell trouble for global security:

The upshot of these three trends will likely be a series of decisions to slowly, but irrevocably reduce America's overseas global military presence and limit our capacity to uphold peace and intervene around the globe. And, as we hollow out our capabilities, China will be fielding ever more accurate anti-ship ballistic missiles, advanced fighter aircraft, and stealthy submarines; Russia will continue to expand its influence over its "near abroad" while modernizing its nuclear arsenal; and Iran will develop nuclear weapons, leading to an arms race or preemptive attacks in the Middle East.

Under such conditions, global trade flows will be stressed, the free flow of capital will be constrained, and foreign governments will expand their regulatory and confiscatory powers against their domestic economies in order to fund their own military expansions.

For the past six decades, global stability was assured in large part by an expensive US commitment to maintain credible forces abroad, forge tight alliances with key strategic countries, and devote a significant, though not onerous, part of national treasure to sustaining a military second to none. Rarely in history has a country shouldered such burdens for so long, but the succeeding decades of growth and avoidance of systemic war proved the wisdom of the course.

Are these three strikes the writing on the wall, the blueprint for how American power will decline in the world, with a whimper and an empty purse? The choice to reverse these trends will grow increasingly difficult in coming years, until we reach a point of no return, as did Great Britain and Rome.

The result, unhappily, will not be a replay of the 20th century, when Washington stepped up after London's decline. It will almost certainly be the inauguration of decades, if not centuries, of global instability, increased conflict, and depressed economic growth and innovation. Such is the result of short-sighted policies that reflect political expedience, moral weakness, and a romantic belief in global fraternity.

It's one thing to worry if the U.S. was unilaterally unplugging itself from alliances over the objections of its partners, but at least in the cases Auslin cites, that's not the issue. The U.S. is harranging Japan to keep the base deal on track, while a democratically elected government, responding to the desire of its people, is objecting. In Britain, neither the current Labour government nor David Cameron's Tories are talking about seriously undermining strategic ties with the United States.

Auslin sites the success of a 60 year American strategy to keep the peace globally, but isn't this the fruits of such peace? Independent-yet-friendly democracies seeking a little more freedom of movement seems to me a far cry from countries seeking "non-aligned" status or worse, becoming clients of a competitive power.

Furthermore, I'm not sure why Auslin would suggest that "foreign governments will expand their regulatory and confiscatory powers against their domestic economies in order to fund their own military expansions." As Auslin notes, the U.S. is able to fund a globe-spanning military without undue burden, surely these other large economies can fund militaries sufficient to meet their (less grandiose) security needs.

I do agree with Auslin that we're looking at a potentially less stable international environment, but that's mostly due to the rise of China and more powerful states in Asia. And China is rising regardless of the percentage of GDP we allot to defense and entitlements. If defense analysts think this is going to overturn the peaceful workings of global trade, then it seems to me they should spend more of their time arguing against nation building in the hinterlands of land-locked Afghanistan than on health-care. The former pulls resources directly away from the mission of militarily containing China (unless providing security so that Chinese mining concerns in Afghanistan can reap billions in profit is a super-sophisticated form of stealth containment), while the later exterts a longer-term budget strain which may or may not impact defense outlays.

And while those who believe in "global fraternity" are surely romantics, I would argue that those who believe in a durable global hegemony are equally starry eyed.

Email | Print | Permalink | Comments | Share

Hindsight is a useful tool in foreign policy - it allows for the assessment of past events and trends in order to - hopefully - chart the correct future course for nations and states. This December 1958 article from Time Magazine analyzed China's "Great Leap Forward" policy and attempted to predict what Beijing's global position would be in the decades to come. Some items worth noting:

- China's population was projected to grow to a billion people by 1980, and to be at over 2 billion by the turn of the 21st century. That is actually close to the truth - China's one-child-per-family rule, instituted in 1980, resulted in approximately 400 million people not born over the past 30 years. In the absence of this policy, China's population today would be around 1.8 billion people.

- The article quotes British Socialist MP Richard Grossman writing that Chinese Communism is "far the biggest and far the most formidable mass movement in human history - a movement which 'within the next decade' may transfer the center of the world to Peking." The British politician may have been off considerably, but current events are shaping up much in Beijing's favor, as modern China already holds a formidable global power status.

- "As recently as World War II, Winston Churchill could impatiently dismiss as 'unrealistic' U.S. insistence that China have big-power status. Yet today, barely 15 years later, Red China is universally acknowledged as the most formidable military power in Asia. Within the Communist bloc, when China speaks, Khrushchev listens." Back In 1958, Soviet leadership was much more confident of Soviet Union's position vis-a-vis China, but few can deny today that when Hu Jintao speaks, both Medvedev and Putin are listening carefully. Even President Obama listens attentively to what his counterpart is saying in China. And Beijing''s growing military power pushes existing relationships and commitments across Asia to the limit.