While your humble blogger
remains jet-lagged out of his gourd adjusts back to the Western hemisphere, he strongly encourages you to read this fantastic David Barboza story in the New York Times on the predilection in China to use cash for ... well ... everything:
Lugging nearly $130,000 in cash into a dealership might sound bizarre, but it’s not exactly uncommon in China, where hotel bills, jewelry purchases and even the lecture fees for visiting scholars are routinely settled with thick wads of renminbi, China’s currency.
This is a country, after all, where home buyers make down payments with trunks filled with cash. And big-city law firms have been known to hire armored cars to deliver the cash needed to pay monthly salaries.
For all China’s modern trappings — the new superhighways, high-speed rail networks and soaring skyscrapers — analysts say this country still prefers to pay for things the old-fashioned way, with ledgers, bill-counting machines and cold, hard cash.
Many experts say it is not a refusal to enter the 21st century as much as wariness, of the government toward its citizens and vice versa (emphasis added).
Now you should definitely read the whole thing, but a few thoughts here:
1) From a personal perspective, as the occasional visitor to China, I can confirm the wads of cash thing -- but it's a bit more complicated than Barboza suggests. First of all, for U.S. academics at least, the payment isn't in renminbi, but in U.S. dollars. Renminbi is sometimes dispensed for things like per diem reimbursements, but not for honoraria. After all, officially, the RMB is still not convertible to dollars outside of the country, so it wouldn't be very nice to get paid in a currency that is technically useless outside the People's Republic.
There are two other qualifiers here. First, at least with respect to academic honoraria, it's not just China that pays in cash -- so does Japan, for example. Second, speaking as an academic who's received the occasional honorarium, it's friggin' awesome. At some point, someone takes you aside and gives you an envelope stuffed with bills. I know it's impolite to say, but every time it happens, I feel like I'm an earner in Tony Soprano's crew. It's soooooo much more satisfying than getting a check (as is the norm in the U.S.) or receiving a bank transfer
three months later than it should be and only after haranguing someone a few times (as is the norm in Europe).
2) The more substantive point of Barboza's story is how the cash-based system reflects the degree of distrust between the government, Chinese citizens, and the financial system. From a global political economy perspective, this cuts in two directions. On the one hand, it suggests that the effects of a real estate bubble popping in China might have a muted effect on the broad mass of Chinese. After all, if they're holding their assets outside the financial system, then their bigger fear will be currency-gnawing rats (read to the end of Barboza's story) than banks closing.
On the other hand, it's worth reading articles like this whenever someone suggests that the renminbi will soon be a challenger to the U.S. dollar as an international reserve currency. For that to ever truly happen, China's capital account will have to be one hell of a lot more transparent and liberal than it is now. As it turns out, even China's Superbank isn't actually that super once one digs into the numbers. And if Chinese citizens are trying to avoid dealing with China's financial system and the renminbi, then I seriously doubt global capital markets are going to embrace the RMB as a rival to the dollar.
Your humble blogger has spent the better part of his trip to Seoul at a conference co-sponsored by the Republic of Korea's Ministry of Foreign Affairs and the East Asia Institute. The topic was "New Strategic Thinking: Planning for Korean Foreign Policy," and I got invited because I edited this a few years ago. I hope that the Korean Foreign Ministry benefitted from it. I certainly learned a few things:
1) No one knows what the f**k the North Koreans are doing. There were representatives from the United States, United Kingdom, China, Japan and South Korea on the panels. I talked to a lot of them informally during breaks and meals as well. No one had any clue why Pyongyang had ratcheted up tensions to the extent that they did over the past two months. About the only thing approximating a consensus was the belief that the North Koreans were in fact bluffing about starting outright hostilities -- which makes their behavior all the more puzzling. In triggering the shutdown of the Kaesong Industrial Park, the North Koreans cost themselves about $90 million a year that they can't afford to lose.
2) Chinese academics are getting more interesting. As recently as five years ago, my eyes used to glaze over whenever a Chinese academic started speaking at a policy conference. The reason was that there was a 100 percent certainty that the academic would simply repeat standard PRC boilerplate that didn't deviate from official government positions. An academic agreeing with one's government is not a sin, but only parroting official discourse is pretty friggin' useless.
Something has changed in recent years, however. Maybe I'm being invited to a better class of conferences, but I don't think that's it. Chinese academics are more willing to openly discuss ongoing debates within the Chinese foreign policy community about the wisdom of a certain course of action. At this conference, Qingguo Jia asserted that the Chinese really were rethinking their relationship with North Korea. Now one can debate whether the Standing Politburo is really entertaining such thoughts, but the fact that there's a public conversation about it is pretty interesting.
3) The best-laid foreign policy plans get destroyed by real-world events. The conference was devoted to how the South Korean government could implement Park Geun-Hye's concept of Trustpolitik that she articulated during her campaign for the presidency. The general consensus was that, at this point, there are very limited ways of building trust with Pyongyang. Furthermore, the likelihood of any confidence-building measures getting scrubbed during the next crisis are very high.
It is to Park's credit that she seems to recognize this and has yanked ROK workers from Kaesong as a signal of South Korea's resolve. Trustpolitik is a great phrase, but I'm dubious of whether it will accomplish anything.
4) It's the little things that matter to build mutual goodwill. That's a fancy way of noting the following: if you are a Caucasian academic in South Korea, can use chopsticks proficiently, and actually like kimchee, your South Korean counterparts will treat you like a god.
So China has not been shy over the past few months in expressing its territorial aspirations, going so far as to imprint them in new passports. Now on the one hand, this is a predictable reaction to the U.S. pivot from last year. On the other hand.... well, for a country that ostensibly thinks a lot about realpolitik, they sure haven't internalized the notion of cooperating under a security dilemma. Indeed, two recent stories suggest that Chinese behavior is disrupting long-held norms in the Pacific Rim.
In the South China Morning Post, Greg Torode reports that much of ASEAN is getting fed up with Beijing:
China is set to face mounting challenges from the grouping over the South China Sea as Cambodia's controversial year as Asean host and chair comes to an end. As difficult as it may have been, Cambodia's year may be as a good as it gets for Beijing - in the short term at least....
An announcement on Sunday from host Cambodia that Asean's leaders had formally agreed not to internationalise the issue "from now on" sparked a flood of questions. Asean-China talks would be the sole forum, spokesman Kao Kim Hourn added.
Given that leaders - including US President Barack Obama and allies from Japan, the US and Australia - were converging on Phnom Penh determined to raise the need to lower South China Sea frictions, it was a remarkable agreement, and a victory for Beijing's backroom lobbying.
But the consensus hailed by Cambodia lasted less than a day. The Philippine delegation, led by President Benigno Aquino, cried foul, warning there was no such deal and insisting on its rights to seek international redress if it felt that its national sovereignty was threatened.
In the rhetoric of Washington, its re-engagement across Asean is part of an effort to "shape" China's rise, forcing it to conform to international norms. With considerable discretion, it has buttressed efforts among Asean countries to co-ordinate and organise diplomatic responses to Chinese challenges.
While the Philippines stood up publicly this week, others were helping in the background, for example. ....
Just four years ago, China had successfully kept Asean nations officially quiet on the subject. The events of the last week have shown that, despite considerable efforts, the calculations are now much more complex.
If ASEAN is known for anything, it's for developing bland consensus statements. That's a key component of the ASEAN way. If that norm is breaking down, then China is having a serious impact on the behavior of member countries -- and not in a way that benefits Beijing's interests.
The other interesting story is Martin Fackler's story in the New York Times about Japan's naval activities in the Pacific Rim. Shorter Fackler: Japan is getting more active in the region. Now what's interesting about this isn't Japan's behavior; one would expect Tokyo to counter Beijing. No, what's interesting is how other countries in the region -- most of whom had a very bad experience with Japan during the Second World War -- are reacting. Which is to say, they're pretty cool with Japan exercising their naval muscle:
In a measure of the geopolitical changes roiling the region... concerns about any resurgent Japanese militarism appear to be fading in some countries embroiled in their own territorial disputes with China, like Vietnam and the Philippines, the scene of fierce fighting during the war.
Analysts there and elsewhere in the region said their countries welcomed, and sometimes invited, Japan’s help.
“We have already put aside our nightmares of World War II because of the threat posed by China,” said Rommel Banlaoi, a security expert at the Philippine Institute for Peace, Violence and Terrorism Research in Manila.
On a recent morning, 22 coast guard officials from a dozen Asian and African nations joined a training cruise around Tokyo Bay aboard a sleek, white Japanese Coast Guard cutter. The visitors snapped photos of the engine room, the electronics-studded bridge and the 20-millimeter cannon. Before the cutter left port, the foreign contingent and the Japanese crew stood at attention on deck facing each other, then bowed deeply.
“Japan is joining the United States and Australia in helping us face China,” said Mark Lim, an administrative officer from the Philippine Coast Guard who joined the cruise.
Japan is widely viewed as being the only nation in the region with a navy powerful enough to check China....
The Japanese Navy took a big step toward opening up in 2009 by holding a joint military drill with Australia — its first such exercise with a nation besides the United States. It has since joined a number of multinational naval drills in Southeast Asia, and in June held its first joint maneuver with India.
Hostility towards any Japanese great power behavior has been another longtime diplomatic staple of the Asia/Pacific. That norm also appears to be eroding fast.
Does this make any difference? Well, yes. As Fackler notes, Japan has the 6th largest defense budget in the world. India, Australia and South Korea aren't exactly defense midgets either. The more that Beijing pushes the rest of the Pacific Rim into the arms of the United States, the more Washington's job becomes one of policy coordinator rather than policy provider. In other words, China's policies are making the pivot cheaper. To repeat a point I made earlier this year:
In [Wang Jisi's essay about how the Chinese leadership views the U.S.], the United States is the chief architect of any misfortune or policy reversal that affects the Middle Kingdom. Wang notes the U.S. "pivot" without speculating why countries like South Korea, Vietnam, or even Myanmar might be so eager to welcome Washington with open arms. If Chinese policymakers truly believe that the U.S. is solely to blame for these turn of events, then they will likely continue to act in ways that alienate their neighbors in the Pacific Rim, thereby exacerbating the geopolitical straight-jacket that they disliked in the first place.
Am I missing anything?
The Wall Street Journal has two great stories on the Federal Reserve's decision to go for QE3 -- a third round of quantitative easing. First, Jon Hilsenrath documents how Fed chairman Benjamin Bernanke built a consensus among the Federal Reserve governors:
For weeks, Mr. Bernanke made dozens of private calls on days, nights and weekends, trying to build broad support for an unusual bond-buying program he wanted approved during the Fed's September meeting, according to people familiar with the matter....
Fed officials described the Fed chairman's phone calls as low-pressure conversations. Mr. Bernanke sometimes dialed up colleagues while in his office on weekends, catching them off guard when their phones identified his private number as unknown. He gave updates on the latest staff forecasts, colleagues said. He asked their thoughts and what they could comfortably support, they said.
The calls helped Mr. Bernanke gauge how far he could push his committee. It also won him trust among some of his fiercest opponents, officials said. Nearly all of Mr. Bernanke's colleagues described him as a good listener.
"Even if you disagree with him on the programs, you know your voice has been heard," said [Dallas Fed President Richard] Fisher, one of his opponents. "There is no effort to bully."
So Bernanke did a lot of hand-holding, a lot of listening... to the key Fed decision-makers. What's equally important is who he didn't talk to -- namely, other central bank heads in the rest of the world.
I bring this up because some of these central bank officials are pretty pissed. QE3 has caused the yuan to hit its all-time high against the dollar, for example. Which leads us to the other interesting Wall Street Journal story. Aaron Back and In-Soo Nam document how South Korea and China have reacted to QE3:
Chinese and South Korean central-bank officials criticized the U.S. Federal Reserve's latest easing efforts and advocated reducing Asia's dependence on the U.S. dollar.
The comments Thursday, at a joint seminar in Beijing by the two central banks, are the clearest indication yet of a rising backlash in Asia against U.S. monetary policy, suggesting it could speed up the search for alternatives to the dollar as the main global currency.
"The rise in global liquidity could lead to rapid capital inflows into emerging markets including South Korea and China and push up global raw-material prices," said Bank of Korea Gov. Kim Choong-soo. "Therefore, Korea and China need to make concerted efforts to minimize the negative spillover effect arising from the monetary policies of advanced nations."
Chen Yulu, an academic adviser to the People's Bank of China, said Asia needs a "regional core currency" to reduce its dependence on the dollar. China's ultimate goal is for the yuan to be as important as the euro or the dollar, he said.
Whoa, this sounds pretty bad... until you get to the next paragraph:
But [Chen] acknowledged that will be a slow process, saying it would be possible for the yuan to be fully convertible by 2020, and that the overall yuan-internationalization process may last until 2040. China strictly controls its currency, though it has made small moves to broaden its use globally in recent years and has also allowed a little more flexibility in its movements (emphasis added).
Furthermore, it's worth noting that the international bitching and moaning about QE3 seems much less than the "currency war" rhetoric that QE2 triggered. Why? Based on my half-assed blog analysis I'd speculate that there are three reasons:
1) The global economy is in a more sluggish state in 2012 than in 2010, so it's hard to argue that expansionary monetary policy is inappropriate now.
2) The United States was not the only major economy to go the quantitative easing route in the past few months. Both the European Central Bank and the Bank of Japan have made similar -- if uncoordinated -- moves.
3) The central bank heads have learned frrom QE2 that the bitching and moaning won't accomplish anything. It didn't stop QE2 and it won't stop QE3.
Am I missing anything?
Your humble blogger has fiercely resisted getting drawn into the scrum regarding Niall Ferguson's Newsweek jeremiad against Barack Obama. I kinda already said my piece about Ferguson as a polemicist more than a year ago. The
fact-check critical blowback and Ferguson's response and the response to Ferguson's response have been truly nasty. And I'm supposed to be on vacation. There are beaches very close to where I am typing this. The Official Blog Wife will be unhappy -- and you do not want to see the Official Blog Wife unhappy on vacation.
At the moment, however, I find myself alone next to a computer. And I have noticed that most of the commentary has been directed at Ferguson's discussion of the U.S. economy. The foreign policy section of the essay has been comparatively neglected (though see here), and I was curious to see how it held up to a fact-check. So -- quickly, before the Official Blog Family returns from the beach -- let's dive in!
The failures of leadership on economic and fiscal policy over the past four years have had geopolitical consequences. The World Bank expects the U.S. to grow by just 2 percent in 2012. China will grow four times faster than that; India three times faster. By 2017, the International Monetary Fund predicts, the GDP of China will overtake that of the United States.
David Frum has already pointed out -- in a defense of Ferguson, mind you -- the ways in which Ferguson's calculatons of the Chinese economy are... er... geopolitically a bit off. By using purchasing power parity rather than market exchange rates, Ferguson is magnifying China's economic power just a wee bit. Or as Frum puts it, "things are not yet quite so dire as Ferguson fears."
Meanwhile, the fiscal train wreck has already initiated a process of steep cuts in the defense budget, at a time when it is very far from clear that the world has become a safer place—least of all in the Middle East.
You know, it's a funny coincidence, cause I was just perusing the Institute for Economics and Peace's 2012 Global Peace Index, which measures "the extent to which countries are involved
in ongoing domestic and international conflicts." A key conclusion they draw in the 2012 report? "The average level of peacefulness in 2012 is approximately the same as it was in 2007 (p. 37)." So, actually, it is somewhat clear that the world -- and the United States -- remains comparatively safe and secure.
For me the president’s greatest failure has been not to think through the implications of these challenges to American power. Far from developing a coherent strategy, he believed—perhaps encouraged by the premature award of the Nobel Peace Prize—that all he needed to do was to make touchy-feely speeches around the world explaining to foreigners that he was not George W. Bush.
I discussed whether the Obama administration had a grand strategy at length in Foreign Affairs last year. I think Ferguson has half a point here on the "touchy-feely speeches" Obama delivered in his first year -- but his administration has clearly pivoted (get it?) away from that first-year approach
In Tokyo in November 2009, the president gave his boilerplate hug-a-foreigner speech: “In an interconnected world, power does not need to be a zero-sum game, and nations need not fear the success of another ... The United States does not seek to contain China ... On the contrary, the rise of a strong, prosperous China can be a source of strength for the community of nations.” Yet by fall 2011, this approach had been jettisoned in favor of a “pivot” back to the Pacific, including risible deployments of troops to Australia and Singapore. From the vantage point of Beijing, neither approach had credibility.
What evidence is there that the rebalancing strategy hasn't worked and lacks credibility? The initial response to the pivot was pretty positive, and it's safe to say that China noticed it. I'm not saying that no evidence exists, mind you. I'm saying that sheer assertion by Ferguson does not in and of itself constiute evidence.
Believing it was his role to repudiate neoconservatism, Obama completely missed the revolutionary wave of Middle Eastern democracy—precisely the wave the neocons had hoped to trigger with the overthrow of Saddam Hussein in Iraq. When revolution broke out—first in Iran, then in Tunisia, Egypt, Libya, and Syria—the president faced stark alternatives. He could try to catch the wave by lending his support to the youthful revolutionaries and trying to ride it in a direction advantageous to American interests. Or he could do nothing and let the forces of reaction prevail.
In the case of Iran he did nothing, and the thugs of the Islamic Republic ruthlessly crushed the demonstrations. Ditto Syria. In Libya he was cajoled into intervening. In Egypt he tried to have it both ways, exhorting Egyptian President Hosni Mubarak to leave, then drawing back and recommending an “orderly transition.” The result was a foreign-policy debacle. Not only were Egypt’s elites appalled by what seemed to them a betrayal, but the victors—the Muslim Brotherhood—had nothing to be grateful for. America’s closest Middle Eastern allies—Israel and the Saudis—looked on in amazement.
"This is what happens when you get caught by surprise," an anonymous American official told the New York Times in February 2011. “We’ve had endless strategy sessions for the past two years on Mideast peace, on containing Iran. And how many of them factored in the possibility that Egypt moves from stability to turmoil? None.”
Man, there's a lot to unpack here. First, I'm calling bulls**t on the Iran claim. Note to Niall: it's never a good idea to use a Jennifer Rubin talking point. Second, I'm pretty sure the administration has been active in Syria -- just not as active as Ferguson would like. Third, it's waaaaay too soon and simplistic describe Egypt as a "foreign-policy debacle."
Regarding the strategic surprise, Ferguson is telling the truth but not the whole truth. Sure, Obama was caught unawares. So was everyone else. I talked to a lot of high-ranking Israeli leaders/thinkers when I visited the country less than six months before the Arab Spring, and not a single person we talked to even hinted at any kind of pan-Arab uprising. Ferguson attends Herzliya regularly, so I'm curious whether he knows any Israelis who picked up on this.
My point here is that Israel has a powerful incentive to monitor everything going on in the Arab world -- and they didn't pick up on the Arab Spring. Does Ferguson seriously believbe a President McCain would have detected it?
Remarkably the president polls relatively strongly on national security. Yet the public mistakes his administration’s astonishingly uninhibited use of political assassination for a coherent strategy. According to the Bureau of Investigative Journalism in London, the civilian proportion of drone casualties was 16 percent last year. Ask yourself how the liberal media would have behaved if George W. Bush had used drones this way. Yet somehow it is only ever Republican secretaries of state who are accused of committing “war crimes.”
The real crime is that the assassination program destroys potentially crucial intelligence (as well as antagonizing locals) every time a drone strikes. It symbolizes the administration’s decision to abandon counterinsurgency in favor of a narrow counterterrorism. What that means in practice is the abandonment not only of Iraq but soon of Afghanistan too. Understandably, the men and women who have served there wonder what exactly their sacrifice was for, if any notion that we are nation building has been quietly dumped. Only when both countries sink back into civil war will we realize the real price of Obama’s foreign policy.
Ferguson makes some interesting points here, but can we talk about the elephant in the room? Why does Ferguson think Obama polls well on national security? Killing bin Laden, the Libya war, the rebalancing strategy, and the withdrawal from Iraq are commonly cited. Guess which one on that list Ferguson fails to mention.
As for what veterans from Afghanistan and Iraq think, well, Pew polled vets on this very question in the fall of 2011. The results? "While post-9/11 veterans are more supportive than the general public, just one-third (34%) say that, given the costs and benefits to the U.S., the wars in Afghanistan and Iraq have both been worth fighting." Nevertheless, 96% of them felt proud of their military service. So I'm guessing that they want the U.S. to withdraw from Afghanistan too.
[UPDATE: Damn Pew's deceptive topline results! Looking a bit deeper, I see support for the war in Afghanistan still commands 50% support among post-9/11 veterans. On the other hand, these post-9/11 veterans also overwhelmingly (87%) support the increased use of unmanned drones that Ferguson dislikes so much.]
America under this president is a superpower in retreat, if not retirement. Small wonder 46 percent of Americans—and 63 percent of Chinese—believe that China already has replaced the U.S. as the world’s leading superpower or eventually will.
I like using survey data to bolster my arguments just as much as the next guy -- but I'm also willing to say quite clearly when the public is wrong about something -- and they're wrong about this. Furthermore, Ferguson knows this perception is wrong. We know from the previous paragraph that he doesn't care for public attitudes when he disagrees with them, but he uses it here. The reason? This time it supports his argument.
My verdict: the foreign policy section isn't as bad as the domestic policy section of Ferguson's article, but it's still sloppy. Ferguson makes a lot of lazy assertions without backing them up with facts. Some of the facts he uses are a bad fit for the arguments he's trying to make. And he values similar data points differently depending on whether they support his argument or not.
There are some good critiques that can be made of the Obama administration's foreign policy, and Ferguson skirts close to some of them. But Romney supporters can do better.
Your humble blogger has been banging on about how China's weaknesses are significant and its strengths have been badly overestimated. So you would think I'd be happy to read this Edward Wong front-pager for the New York Times:
After the economies of Western nations imploded in late 2008, Chinese leaders began boasting of their nation’s supremacy. Talk spread, not only in China but also across the West, of the advantages of the so-called China model — a vaguely defined combination of authoritarian politics and state-driven capitalism — that was to be the guiding light for this century.
But now, with the recent political upheavals, and a growing number of influential voices demanding a resurrection of freer economic policies, it appears that the sense of triumphalism was, at best, premature, and perhaps seriously misguided. Chinese leaders are grappling with a range of uncertainties, from the once-a-decade leadership transition this year that has been marred by a seismic political scandal, to a slowdown of growth in an economy in which deeply entrenched state-owned enterprises and their political patrons have hobbled market forces and private entrepreneurship.
“Many economic problems that we face are actually political problems in disguise, such as the nature of the economy, the nature of the ownership system in the country and groups of vested interests,” said Zhang Ming, a political scientist at Renmin University in Beijing. “The problems are so serious that they have to be solved now and can no longer be put off.”
Wong didn't even delve into the state of China's big banks, which Bloomberg's Jonathan Weil examines and concludes that they're facing a world of hurt, or China's civil-military conundrum, which I blogged about earlier in the week.
So China is doomed, right? The bubble is gonna pop big time, right?
Well... maybe. Whenever I get too bearish on Beijing, two things drag me back from the brink: 1) China's sheer size means it can muddle through and still increase its relative power; and 2) it's possible for China to experience a severe downturn and still recover quite nicely. As I pointed out a few years ago:
[I look] at China and see the parallels with America's rise to global economic greatness during the late 19th and early 20th centuries. From an outsider's vantage point, America looked like a machine that could take immigrants and raw materials and spit out manufactured goods at will. By 1890, the U.S. economy was the largest and most productive in the world. As any student of American history knows, however, these were hardly tranquil times for the United States. Immigration begat ethnic tensions in urban areas. The shift from an agrarian to an industrial economy led to fierce and occasionally violent battles between laborers, farmers, and owners of capital. With an immature financial sector, recession and depressions racked the American economy for decades.
It is not contradictory for China to amass a larger share of wealth and power while still suffering from severe domestic vulnerabilities.
China-watchers tend to be divided between the Bubblers and the Extrapolators. I'm still more sympathetic to the Bubblers, but if the "China is doomed" meme goes mainstream, I might have to defect.
Yesterday your humble blogger attended a Hoover Institution conference devoted to China's evolving military and its implicatons for U.S. foreign policy. I can't say who said what, but I can say that atendees included several high-ranking military folk, multiple former policy principals, top China people from the academic and think tank communities, and at least one former presidntial candidate.
Chatham House rules prevent me from revealing who said what, but what was interesting was the areas of consensus among most of the attendees. In order:
1) China has bigger worries than the United States. It is easy to look at China's military modernization and interpret it as a dagger placed against the throat of the U.S. and its allies. It's worth remembering, however, that China currently spends more money on internal security than defense. Their actual capabilities in the anti-access/anti-denial area are... let's say a bit exaggerated (though growing). Sure, Beijing wants to expand its sphere of influence -- its a rising great power -- but it sees its greatest threats as internal rather than external.
2) If you want to worry about something, worry about China's civil-military relations. The U.S. defense establishment is quite keen on ramped-up military-to-military connections. It's the People's Liberation Army (PLA) that is not keen on this at all. The civilian leadership has... let's say limited control over numerous aspects of the PLA. Plus, the Chinese military has a corruption problem that makes the Bo Xilai scandal look like minor kerfuffle. Relations with the United States are difficult because of clashing interests... but also clashing styles. The PLA is quite transparent about intentions, but opaque about their capabilities. The United States is the reverse -- transparent about capabilities but ambiguous about intentions. This is not a recipe for comity.
3) The Chen case didn't really affect the Strategic and Economic Dialogue. This is not to say that the S & ED solved anything, but it did appear to be a productive meeting -- which is, after all, the point of a dialogue.
4) You know what would be super? The United States ratifying the U.N. Convention on the Law of the Sea (UNCLOS). There was unanimous consent the United States could do far more damage to itself than China ever could. Exhibit A on this front was the continued failure of the U.S. Senate to ratify UNCLOS. This is, in theory, the treaty that can provide the framework for resolving disputes in the South China Sea and East China Sea. It's a treaty backed by every president and secretary of state in the post-Cold War era. It's a treaty that the U.S. Navy desperately wants to see ratified. But because it hasn't happened yet, the U.S. always finds itself wrong-footed on these issues in negotiations. Well, I'm sure that in the current political climate, the Senate will eventually get around to it. Oh, wait...
Your humble blogger has been underwhelmed with Mitt Romney's foreign policy pronouncements to date. Sure, I thought what he was saying was far better than most of the rest of the GOP 2012 field, but that's like complimenting Moe on being the smart Stooge.
The past month or so have not helped matters. During this period, Romney has continued to harp on Obama's non-existent "apology tour", published an op-ed on China that the Hulk could have drafted, and labeled a dysfunctional and demographically dying state our number one geopolitical foe.
In fairness, the Romney campaign has a tough task. Obama's foreign policy has been far from perfect, but he's hit the key notes reasonably well. U.S. standing abroad has risen considerably, Osama bin Laden is dead, U.S. grand strategy has pivoted towards the most dynamic region in the world, and his Secretary of State is a badass texter. There are angles where Romney could try to hit Obama - the Iraq withdrawal, the planned drawdown in Afghanistan -- except that the American public overwhelmingly endorses these moves. That ground is not fertile. This has reduced the Romney campaign to do little but shout "Iran is dangerous! Israel is getting thrown under the bus!!" a lot. The fact that the Obama White House seems delighted to highlight this stuff is not a good sign for the Romney folk.
This is a shame. Foreign policy might actually matter in this campaign, and it would be nice if there was a genuine debate. For that to happen, however, the Romney campaign needs to actually mount a substantive critique as opposed to a purely oppositional one. They need to seize on an issue and show how it represents the flaws of Obama's foreign policy approach.
Might I suggest North Korea? From today's New York Times front-pager by Mark Landler and Jane Perlez:
With North Korea poised to launch a long-range missile despite a widespread international protest, the Obama administration is trying to play down the propaganda value for North Korea’s leaders and head off criticism of its abortive diplomatic opening to Pyongyang in late February....
[T]he administration’s options are limited. The United States will not seek further sanctions in the United Nations Security Council, this official said, because North Korea is already heavily sanctioned and Washington needs to preserve its political capital with China and Russia to win their backing for future measures against Syria and Iran. The more likely scenario at the United Nations is a weaker statement from the Council president.
With North Korea telling reporters that it had begun fueling the rocket, the launching appeared imminent, confronting the Obama administration with a new diplomatic crisis after an agreement that American officials had hoped would open a new chapter with a traditionally hostile and unpredictable nation.
White House officials moved aggressively to deflect criticism of that deal, which offered North Korea food aid in return for a pledge to suspend work on its uranium enrichment program and to allow international inspectors into the country.
Unlike the administration of President George W. Bush, this official said, the Obama administration did not give the North Koreans anything before they violated the agreement by announcing plans to go ahead with the satellite launching. And, he added, the administration expects the North Koreans to abide by the other terms of the deal if it hopes, as it has said, for a fuller diplomatic dialogue.
Still, for President Obama, who prided himself on not falling into the trap of previous presidents in dealing with North Korea, the diplomatic dead end has been a frustrating episode: proof that a change in leadership in Pyongyang has done nothing to change its penchant for flouting United Nations resolutions, paying no heed to its biggest patron, China, and reneging on deals with the United States.
This is an issue that the Romney campaign should be all over. The administration's policy of "strategic patience" followed by "let's make a deal with Kim the Younger" has not worked well. The DPRK highlights the Obama administration's reluctance to talk tough with China and the ways in which its nonproliferation policy seems to be... troubled. This is taking place in the most strategically interesting part of the world. In other words, this is an issue where Obama's record has been radically imperfect and a solid critique should resonate. Sure, there's no magic solution or anything, but attacking Obama on this issue is at least a way for Romney to articulate exactly what he means when he signals his hawkishness.
So let's see how the Romney campaign responds. Disappointingly, North Korea was not even mentioned in the Romney foreign policy team's open letter to Obama, and it's nowhere on Romney's campaign blog. If that doesn't change by the end of this week, then I'll know I don't really need to take his foreign policy pronouncements all that seriously.
I'm daring you, Mitt Romney. I'm double-dog-daring you. Let's see if and your team have got the foreign policy goods or not.
Your humble blogger is spending the first half of this week at the International Studies Association's annual conference. This means that news stories that would ordinarily catch my eagle eye the day they come out take a little longer to
penetrate my alcohol-bleary cerebral cortex read. Still, if they're important enough, they require a blog response.
Yesterday the New York Times' Jane Perlez reported that Wang Jisi -- China's most prominent international affairs writer -- has offered a surprisingly stark view of how China's leadership views the United States:
The senior leadership of the Chinese government increasingly views the competition between the United States and China as a zero-sum game, with China the likely long-range winner if the American economy and domestic political system continue to stumble, according to an influential Chinese policy analyst.
China views the United States as a declining power, but at the same time believes that Washington is trying to fight back to undermine, and even disrupt, the economic and military growth that point to China’s becoming the world’s most powerful country, according to the analyst, Wang Jisi, the co-author of “Addressing U.S.-China Strategic Distrust, a monograph published this week by the Brookings Institution in Washington and the Institute for International and Strategic Studies at Peking University.
The United States is no longer seen as “that awesome, nor is it trustworthy, and its example to the world and admonitions to China should therefore be much discounted,” Mr. Wang writes of the general view of China’s leadership.
In contrast, China has mounting self-confidence in its own economic and military strides, particularly the closing power gap since the start of the Iraq war. In 2003, he argues, America’s gross domestic product was eight times as large as China’s, but today it is less than three times larger.
The candid writing by Mr. Wang is striking because of his influence and access, in Washington as well as in Beijing. Mr. Wang, who is dean of Peking University’s School of International Studies and a guest professor at the National Defense University of the People’s Liberation Army, has wide access to senior American policy makers, making him an unusual repository of information about the thinking in both countries. Mr. Wang said he did not seek approval from the Chinese government to write the study, nor did he consult the government about it. (emphasis added)
If Wang is telling the truth in that last bolded section, it's quite extraordinary. One of the common laments among U.S.-based international relations scholars is that there is no point in having a China-based scholar come to a conference on Sino-American relations, because the Chinese scholar inevitably clams up whenever the discussion turns to the thinking in Beijing. If Wang doesn't have to worry about that, it's a sign of his relative influence.
That said, what about his analysis? You can read it by clicking here. Wang doesn't pull many punches. Here's an assortment of quotes from it:
Chinese distrust of the United States has persisted ever since the founding of the People’s Republic of China (PRC) in 1949....China’s strategic distrust of the United States is deeply rooted, and in recent years it seems to have deepened.
Since 2008, several developments have reshaped China’s views of the international structure and global trends, and therefore of its attitude toward the United States. First, many Chinese officials believe that their nation has ascended to be a firstclass power in the world and should be treated as such.... Second, the United States is seen in China generally as a declining power over the long run...Third, from the perspective of China’s leaders, the shifting power balance between China and the United States is part of
an emerging new structure in today’s world.
Fourth, it is a popular notion among Chinese political elites, including some national leaders, that China’s development model provides an alternative to Western democracy and experiences for other developing countries to learn from, while many developing countries that have introduced Western values and political systems are experiencing disorder and chaos. The China Model, or Beijing Consensus, features an all-powerful political leadership that effectively manages social and economic affairs, in sharp contrast to some countries where “color revolutions” typically have led to national disunity and Western infringement on their sovereign rights....
It is widely believed in the Chinese leadership that the Americans orchestrated awarding
the Nobel Peace Prize to Liu Xiaobo in October 2010....
Chinese officials have paid special attention to the Obama administration’s statements of a new pivot of America’s strategic focus to Asia, made during the APEC meetings in Hawaii and the East Asia Summit in Indonesia in November 2011. In Beijing’s interpretation, many of Washington’s latest actions in Asia, including the decisions to deploy on rotation U.S. marines in Darwin, Australia, encourage Myanmar (Burma) to loosen domestic political control, and strengthen military ties with the Philippines, are largely directed at constraining China.
You should read the whole thing. I have three thoughts. First, I'm sure to many American readers, Wang's description of Chinese thinking about the U.S. verges on the conspiratorial and paranoid. According to Beijing, the United States does what it does only to constrain and weaken China. And, indeed, this does seem outladish, until one thinks about what is written about China in the United States -- by presidential candidates no less.
Second, if Wang's assessments really reflect the thinking in Beijing about the future of world politics, then Chinese diplomacy is about to face a world of hurt. In Wang's essay, the United States is the chief architect of any misfortune or policy reversal that affects the Middle Kingdom. Wang notes the U.S. "pivot" without speculating why countries like South Korea, Vietnam, or even Myanmar might be so eager to welcome Washington with open arms. If Chinese policymakers truly believe that the U.S. is solely to blame for these turn of events, then they will likely continue to act in ways that alienate their neighbors in the Pacific Rim, thereby exacerbating the geopolitical straight-jacket that they disliked in the first place.
Third, Wang notes that, in the short run, China has an incentive for the U.S. economy to recover. I'd add that the reverse is true. Relations with China would be difficult if Beijing suffered a growth slowdown. That would increase the domestic political pressure on the CCP at a time when they're already a bit stressed out. Furthermore, based on Wang's analysis, Chinese elites would likely blame the U.S. for any downturn.
Am I missing anything?
Walter Russell Mead has not been the biggest fan of the current president, so it's worth quoting at length what he said in a recent blog post about Obama's Pacific Rim trip:
The cascade of statements, deployments, agreements and announcements from the United States and its regional associates in the last week has to be one of the most unpleasant shocks for China’s leadership — ever. The US is moving forces to Australia, Australia is selling uranium to India, Japan is stepping up military actions and coordinating more closely with the Philippines and Vietnam in the South China Sea, Myanmar is slipping out of China’s column and seeking to reintegrate itself into the region, Indonesia and the Philippines are deepening military ties with the the US: and all that in just one week. If that wasn’t enough, a critical mass of the region’s countries have agreed to work out a new trade group that does not include China, while the US, to applause, has proposed that China’s territorial disputes with its neighbors be settled at a forum like the East Asia Summit — rather than in the bilateral talks with its smaller, weaker neighbors that China prefers.
Rarely has a great power been so provoked and affronted. Rarely have so many red lines been crossed. Rarely has so much face been lost, so fast. It was a surprise diplomatic attack, aimed at reversing a decade of chit chat about American decline and disinterest in Asia, aimed also at nipping the myth of “China’s inexorable rise” in the bud....
[I]t was as decisive a diplomatic victory as anyone is likely to see. Congratulations should go to President Obama and his national security team. The State Department, the Department of Defense and the White House have clearly been working effectively together on an intensive and complex strategy. They avoided leaks, they coordinated effectively with half a dozen countries, they deployed a range of instruments of power. In the field of foreign policy, this was a coming of age of the Obama administration and it was conceived and executed about as flawlessly as these things ever can be.
You know it was a good foreign policy trip when Politico runs the "Obama will soon miss his foreign policy successes as he returns to the Washington mire" storyline upon his return.
The standard line among the press and expert analysts is that the combination of speeches and actions represents a dramatic foreign policy "pivot" to East Asia. This elides some prior speeches that suggested this was under way for some time, but still -- what does it mean?
I'd suggest three things. First, it's an interesting moment to highlight some macro trends that are relatively favorable to the United States. In comparison to, say, China or Europe, the United States looks to be in decent shape. Over the longer term, trends in both energy and manufacturing suggest that the United States will continue a time-honored tradition and emerge from a crisis of its own making in a stronger relative position than before. If the administration is smart, it will marry its recent successes to these longer-term trends as a way of constructing a more optimistic strategic narrative.
Second, China is likely to pursue a more accommodating posture in the short run. As Mead notes, the official Chinese reaction has been muted. The unofficial reaction has ranged from the hyperbolic to the inscrutable. Still, as I've pointed out repeatedly, China's behavior in 2009 and 2010 was a giant honking invitation for the rest of the Pacific Rim to cozy up to the United States. And that's what should worry Beijing. It's not that the United States is interested in maintaining its presence in East Asia -- that interest has not wavered. What has changed is the eagerness with which the countries in the region, ranging from Australia to Myanmar, have reciprocated.
Third, while the Obama administration deserves credit for this foreign policy swing -- and for some fun, compare and contrast coverage of this trip with Obama's Pac Rim swing from two years ago -- the "pivot" language is badly misplaced. A pivot implies that the United States will stop paying attention to Europe or the Middle East and start paying attention to East Asia. While I'm sure that's what the Obama administration wants to do, it can't. Europe is imploding, as are multiple countries in the Middle East. The United States can't afford to ignore these regions, since uncertainty there eventually translates into both global and domestic problems. A European financial meltdown or an Egyptian political meltdown will have ramifications that simply can't be ignored.
Talking about a United States "pivot" in foreign policy is meaningless. The US, like an overstuffed couch, is simply too big to pivot.
What do you think?
Over at The Atlantic, Max Fisher argues that the age of American client states is coming to an end:
The fall of easily controlled dictators across the region (the U.S. has already given up on its man in Yemen) comes at the same time as U.S.-allied democracies and autocracies alike seem increasingly willing to buck Washington's wishes. Last week alone, the U.S. clashed with some of its most important client states. Maybe that's because of America's habit of picking the most troubled states in the most troubled regions as clients (where they're perceived as the most needed), maybe it's because democratic movements are pressuring client states to follow popular domestic will rather than foreign guidance, and maybe it's because the idea of clientalism was doomed from the start....
Whatever the reasons, U.S. client states have been causing Washington more headaches than normal this year, and particularly over the past week. Here are ten of the most closely held U.S. clients, measured in part by foreign assistance (scheduled for fiscal year 2012) and by number of U.S. troops stationed there (according to Department of Defense statistics). Each is labeled with the reason for their strategic importance and with a rough gauge of how much trouble it's been causing the U.S., rated on a scale from "Zero Problems" to "Migraines in Washington." The most extreme cases are labeled "Client Relationship at Risk." Looking over the list of troubled client relationships, it's easy to wonder if the entire Cold War-inspired enterprise could be nearing its end. Maybe Egypt, just as it helped end the centuries of European imperialism in 1956, could make 2011 the year that began the end of clientalism.
Fisher makes an interesting point, but if you look at his list, there's a pretty obvious pattern: the client states causing actual headaches in Washington are in the Greater Middle East. Fisher's examples from Latin America and the Pacific Rim -- Colombia, South Korea and Taiwan -- are relationships that are actually deepening rather than fraying. These also happen to be the most democratic countries on Fisher's list.
The deeper question is whether the trouble with clients is a uniquely American problem, a uniquely Middle East problem, or a more general phenomenon of client-patron relationships. This is really the bailiwick of Dan Nexon, and I expect he'll weigh in on this question soon. Based on China's difficulties with North Korea and the Middle East, I'm inclined to think it's a general phenomenon, however.
I see that The Powers That Be at FP are highlighting my
unconventional wisdom about China's rise on their splash page.
Given the Hu-Obama summit and subsequent flurry of China commentary this week, it's worth highlighting the most absurd data point I cited in that article -- Forbes' magazine's decision to name Chinese President Hu Jintao the world's most powerful individual. Their explanation:
Paramount political leader of more people than anyone else on the planet; exercises near dictatorial control over 1.3 billion people, one-fifth of world's population. Unlike Western counterparts, Hu can divert rivers, build cities, jail dissidents and censor Internet without meddling from pesky bureaucrats, courts.
With these two sentences, the editors at Forbes managed to demonstrate an even shallower analysis of domestic politics than their Dinesh D'Souza cover story on Obama, which I didn't think was possible.
Let's review just a smattering of coverage about Hu Jintao's current ability to exercise iron-willed control over the Chinese bureaucracy, shall we? First, Gordon Chang in The New Republic:
Hu is sometimes called the world's most powerful person -- Forbes magazine gave him that accolade in November -- but he is a weak leader back home. Just how weak was revealed in two startling incidents within the past three weeks. On Tuesday, after the state-run Chengdu Aircraft Design and Research Institute performed the first flight test of the J-20 stealth fighter -- an unmistakable slap in the face of Defense Secretary Robert Gates, who was visiting Beijing at the time -- Hu professed not to know that the test had occurred....
If the Chinese leader was telling the truth, the test flight reveals a remarkable defiance of civilian authority by the flag officers of the People's Liberation Army, an obvious attempt to undermine the military cooperation Hu said he wanted to foster. Or if, as is more likely, Hu did in fact know about the timing of the test, he nonetheless said something that made himself appear inept. One has to wonder about a political system that creates incentives for its top leader to publicly imply that he is both ignorant and weak.
Either way, the unmistakable impression is that Hu seems to have much less influence than is often assumed. This could be due to the fact that China is in the middle of a transition to the next generation of political leaders -- led by Xi Jinping -- who are gaining in power as Hu loses his in the long run up to the actual handover.
Next, the Economist:
China's new raw-knuckle diplomacy is partly the consequence of a rowdy debate raging inside China about how the country should exercise its new-found power. The liberal, internationalist wing of the establishment, always small, has been drowned out by a nativist movement, fanned by the internet, which mistrusts an American-led international order.
Then there's Drew Thompson in -- hey, it's FP!!
China's national security decision-making process is opaque, and so this worrisome disconnect -- who knew what when -- is difficult to ascertain with certainty. It is highly improbable that Hu was unaware of the development of this major military advancement. His role as chairman of the Central Military Commission ensures that he is well briefed about major programs, and he doubtlessly approves their large budgets. What is not known is how much oversight and control the central government leadership in Beijing had over the PLA's decision-making process that lead to highly visible tests at the Chengdu air base just as Gates was visiting China.
And, finally, David Sanger and Michael Wines in the New York Times:
China is far wealthier and more influential, but Mr. Hu also may be the weakest leader of the Communist era. He is less able to project authority than his predecessors were -- and perhaps less able to keep relations between the world's two largest economies from becoming more adversarial.
Mr. Hu's strange encounter with Defense Secretary Robert M. Gates here last week -- in which he was apparently unaware that his own air force had just test-flown China's first stealth fighter -- was only the latest case suggesting that he has been boxed in or circumvented by rival power centers....
President Obama's top advisers have concluded that Mr. Hu is often at the mercy of a diffuse ruling party in which generals, ministers and big corporate interests have more clout, and less deference, than they did in the days of Mao or Deng Xiaoping, who commanded basically unquestioned authority....
"There is a remarkable amount of chaos in the system, more than you ever saw dealing with the Chinese 20 years ago," Brent Scowcroft, the former national security adviser and Mr. Gates's mentor, said Saturday. "The military doesn't participate in the system the way it once did. They are more autonomous -- and so are a lot of others."
Now, to be fair, it's possible that China is learning how to play the authoritarian equivalent of the two-level game. Even if that's true, however, China is playing that game very badly -- and they're playing it in policy arenas that are guaranteed to trigger a balancing coalition rather than accommodation.
OK, contest for readers -- name the award that I want to give to writers who vastly exaggerate China's rise!
Well, it was a very exciting weekend on the Korea peninsula, as South Korea vowed to go ahead with live-fire artillery exercises on Yeonpyeong Island, site of the artillery exchange between ROK and DPRK earlier this month. North Korea vowed to retaliate, the U.N. Security Council met all day yesterday without any agreement on the matter, Seoul recommended island residents go to bunkers, and everyone urged restraint by everyone else.
Very exciting!! How would today's exercise play out? Mark McDonald and Martin Fackler report for the New York Times:
Defying North Korean threats of violent retaliation and "brutal consequences beyond imagination," South Korea on Monday staged live-fire artillery drills on an island shelled last month by the North.
The immediate response from Pyongyang was surprisingly muted, however. A statement from the North's official news agency Monday night said it was "not worth reacting" to the exercise.
"Maybe we had a little impact," said Gov. Bill Richardson of New Mexico, who as an unofficial American envoy was in Pyongyang when the drills ended. Mr. Richardson, a former ambassador to the United Nations, said earlier that the North had offered concessions on its nuclear program, including a resumption of visits by United Nations inspectors.
Wait, that's it? Pyongyang issues threat after threat and then claims the whole thing isn't worth their bother? Let's dig a little deeper into the Times story:
The question now is whether the North will make good on its promises to retaliate, and how it might do so. Mr. Lankov, the analyst, said he did not expect a massive response by Pyongyang because the recent incidents are part of a North Korean "strategy of tensions," meaning that North Korean leaders want to choose when and where to strike.
"I do not think the North Koreans will do much this time," Mr. Lankov said. "They'd rather deliver a new blow later when they will be ready. But the maneuvers still mean a great risk of escalation."
Meanwhile, Mr. Richardson said the North had agreed to concessions related to its nuclear program, a main source of tension on the peninsula. A former United States special envoy to North Korea, Mr. Richardson was on an unofficial trip approved by the State Department. He met with high-ranking military officials, the North Korean vice president and members of the Foreign Ministry over four days.
Mr. Richardson said the North had made two significant concessions toward reopening six-party talks on the country's nuclear program. The North's proposal would allow United Nations nuclear inspectors back into the Yongbyon nuclear complex to ensure that it is not producing enriched uranium for a nuclear bomb. The North recently showed an American nuclear expert a new and stunningly sophisticated facility there. It expelled international inspectors last year.
North Korean officials also told Mr. Richardson that their government was willing to sell 12,000 plutonium fuel rods to South Korea, removing bomb-making material from the North, he said. "I would describe this as important progress," he said of the concessions.
So now North Korea also wants to restart the Six-Party Talks? What just happened? As always, trying to explain North Korean behavior is a challenging task. Here are some possible explanations:
1) North Korea finally got caught bluffing. True, they have the least to lose from the ratcheting up of tensions, but that doesn't mean they have nothing to lose from a military escalation with the ROK. The past month of tensions got everyone's attention, and North Korea is only happy when everyone else is paying attention to them.
2) Kim Jong Un was busy. One of the stronger explanations for the DPRK's last round of provocations was that this was an attempt to bolster Kim the Younger's military bona fides before the transition. Reading up on what little is out there, it wouldn't shock me if he planned all of this and then postponed any retaliation because he'd organized a Wii Bowling tournament among his entourage.
Somewhat more seriously, it's possible that there are domestic divisions between the military, the Foreign Ministry, and the Workers Party, and that the latter two groups vetoed further escalation.
3) China put the screws on North Korea. For all the talk about juche, North Korea needs external aid to function, and over the past year all the aid lifelines have started to dry up -- except for Beijing. As much as the North Koreans might resent this relationship -- and they do -- if Beijing leaned hard on Pyongyang,
4) North Korea gave the ROK government the domestic victory it needed. Bear with me for a second. The shelling incident has resulted in a sea change in South Korean public opinion, to the point where Lee Myung-bak was catching hell for not responding more aggressively to the initial provocation. This is a complete 180 from how the ROK public reacted to the Cheonan incident, in which Lee caught hell for responding too aggressively.
Lee clearly felt domestic pressure to do something. Maybe, just maybe, the North Korean leadership realized this fact, and believed that not acting now would give Lee the domestic victory he needed to walk back his own brinksmanship.
5) Overnight, the DPRK military hired the New York Giants coaching staff to contain South Korean provocations. Let's see... a dazzling series of perceived propaganda victories, followed by the pervasive sense that they held all the cards in this latest contretemps. Then an inexplicable decision not to do anything aggressive at the last minute, after which containment policies fail miserably. Hmmm… you have to admit, this MO sounds awfully familiar.
If I had to make a semi-informed guess -- and it's just that - I'd wager a combination of (1) and (4).
Alternative explanations welcomed in the comments.
North Korea has spent the past week demanding that someone pay attention to them. In response, online policy recommendations have ranged from Thomas P.M. Barnett's doubling down on strategic patience to Glenn Reynolds recommendation that the U.S. nuke North Korea "if they start anything."
The IR wing of the blogosphere is pretty pessimistic about the current situation. Rob Farley concludes:
North Korean behavior has vexed Presidents Bill Clinton, George W. Bush, and now Barack Obama. The difficulty doesn't lie with the delusions or incompetence of any American administration, although the United States has suffered from its fair share of both. Rather, reaching a conclusive agreement with North Korea is simply beyond the capabilities of the United States. Under current circumstances, North Korea cannot be "solved"; it can only be managed.
In a follow-up post, Farley is even more pessimistic:
The best we can do now is hope for change internal to North Korea, which need not necessarily take the form of full-scale regime change. I suspect that Kim Jong Il needs to be dead before any meaningful change can happen, not necessarily because he’s particularly crazy or irrational, but rather because the impending succession crisis makes any diplomatic maneuver more difficult for North Korea. I should hasten to add that I don’t support military action in the service of regime change; the costs are virtually incalculable. I do think that military response is one necessary managerial tool for the relationship, but it is critically important that any response to specific provocations is measured, limited, and spearheaded by South Korea.
Dan Nexon looks at the strategic calculus and concludes that escalation won't happen:
[N]one of this suggests an alteration in the basic factors that restrain Seoul:
a) Before they collapse, North Korean forces will kill a lot of South Koreans and do a lot of damage to South Korea's economy;
b) The United States has no appetite for taking part in an additional large-scale military conflict;
c) Uncertainty surrounding Beijing's likely actions in the event of a conflict; and
d) The significant challenges that would come from assuming control of North Korean territory if the conflict leads to ROK victory in a full-blown war.
These four factors--two of which aren't particularly manipulable--make significant escalation unlikely.
Erik Voeten notes that if the reason for the current dust-ups are internal rather than external, then escalation would be a bad move:
If this is a provocation as usual, then new negotiations and concessions may "work" in the sense that they will quiet the North Koreans until they feel the need to provoke again. If [Victor] Cha is right, then the North Korean leadership may actually want to see a limited military response that they can defend themselves against in some heroic fashion.
Finally, here at FP, both Michael Green and Steve Walt recommend that the U.S.not play into Pyongyang's hands by overreaqcting, and try reach some accord with China over what to do with the preoblem child of Northeast Asia. Aidan Foster-Carter argues that... er... well, to be honest, I'm not entirely sure what he's arguing. He starts by saying that there's no way Beijing is going to rein in its bestest ally, but then he observes that since China is North Korea's only ally, "if [North Korea's leaders] have an ounce of sense, they must know the old game is up. Militant mendicancy won't cut it any more; no one will buy that old horse again." So damned if I know what he's saying.
Speaking for myself, the artillery barrage, although scary, is not what scares me about the stituation. No, the guided tour of their new light water nuclear reactor facility is the real game-changer on the Korean penunsula, because it undercuts the U.S. policy of strategic patience. See, 18 months ago, I wrote:
I think maybe, just maybe, the international community has found a status quo that makes the North Koreans less comfortable than everyone else. Assuming that the interdiction and sanctions regime works well -- which is a robust but not entirely unreasonable assumption -- then North Korea gets nothing for thumbing its nose at the world except some more weapons-grade fissile material.
That's not nothing, but it's not all that much either. Pyongyang already has a deterrent to prevent invasion. It can't threaten nuclear blackmail all that persuasively, because it's a pretty hollow threat on their part. And if they can't sell their technology to other countries, then there's no profit in it for them either. Which means they're stuck, wallowing in their own barren dirt.
The fast development of a light-water reactor -- during a period when the DPRK leadership has been kinda busy with an uncertain leadership transition -- changes the strategic calculus. It suggests that North Korea has not been contained; instrad, Pyongyang has been able to ramp up a technologically sophisticated prograqm during the time period when that task should have been fantastically difficult.
How did this happen? At least one of the following things must be true:
1) North Korea has developed an indigenous group of nuclear researchers with sufficient brainpower and access to resources to move forward in the nuclear arena;
2) Despite the best efforts of everyone involved, the sanctions/interdiction regime is leaking like a sieve.
3) Elements of the Chinese leadership are saying "f*** it" and assisting the DPRK in their nuclear program.
4) The entire Chinese leadership is saying "f*** it" and assisting the DPRK in their nuclear program.
If (1) or (4) are the problems, they can't be fixed. North Korea won't stop, and telling the Chinese to act contrary to their own perceived interest isn't a viable strategy. I'm not really sure that (2) is the problem, but ramping up Proliferation Security Initiative efforts does force Beijing to sit up and pay notice, since it really means a lot more unfriendly warships in its backyard, which might affect (3) or (4). It probably won't cause the Chinese to change their mind, however. (3) might be fixable, but I doubt it. Beijing's slow-motion response to the latest contretemps suggests that if the problem is a divided foreign policy leadership in Beijing, then it's a problem that won't be going away anytime soon. Meanwhile, the sanctions regime will falter.
So, for now, I'd advocate increasing the PSI presence surrounding North Korea while demonstrating a receptivity to talks if/when Pyongyang drops the brinksmanship routine. Very reluctantly, I'm beginning to wonder if it's time to call the North Koreans in their game of Crazy No Limit Texas Hold 'Em. Voeten hypothesizes that a low-level military attack would be just the thing Kim the Older would need to boost support for Kim the Younger. A more costly military attack -- say, the Yongbyon facility -- might have the reverse effect, however.
Of course, the problem with that option is that the North Koreans could respond by ramping up the retaliation. This is why I'm only beginning to wonder about this possibility. There really is a point, however, after which Pyongyang doesn't want this to escalate -- because in an all-out war, North Korea really does lose.
The question is whether that point can be located without a Second Korean War breaking out as a result. That risk is what gives me serious pause about considering any military option.
Increasingly, however, I don't think the status quo can hold.
Brilliant and original policy ideas are welcomed in the comments section.
The opening and closing of today's Tom Friedman's column:
For me, the most frightening news in The Times on Sunday was not about North Korea's stepping up its nuclear program, but an article about how American kids are stepping up their use of digital devices...
We need better parents ready to hold their kids to higher standards of academic achievement. We need better students who come to school ready to learn, not to text. And to support all of this, we need an all-society effort -- from the White House to the classroom to the living room -- to nurture a culture of achievement and excellence.
If you want to know who's doing the parenting part right, start with immigrants, who know that learning is the way up. Last week, the 32 winners of Rhodes Scholarships for 2011 were announced -- America's top college grads. Here are half the names on that list: Mark Jia, Aakash Shah, Zujaja Tauqeer, Tracy Yang, William Zeng, Daniel Lage, Ye Jin Kang, Baltazar Zavala, Esther Uduehi, Prerna Nadathur, Priya Sury, Anna Alekeyeva, Fatima Sabar, Renugan Raidoo, Jennifer Lai, Varun Sivaram.
Do you see a pattern?
OMG, I do see a pattern!! It's the the funky foreign name game! Hey, I can play that game too -- in fact, let's take a look at the first paragraph of that Sunday Times story, shall we?
On the eve of a pivotal academic year in Vishal Singh's life, he faces a stark choice on his bedroom desk: book or computer?
Guess what? He chooses the computer.
I understand what Friedman is trying to say here about American education, but mixing in the "kids are texting too much these days and it's rotting their brains" lament is as distracting a hook as... er... texting itself. Does Friedman seriously believe that the young people in South Korea, Vietnam, and China are abstaining from this technology?
Sorry, Tom, but the North Korea nucleas reactor story scares me far more. [So what do you think of the DPRK's latest provocations? Huh, smart guy?!--ed. I hope to post something on this later today.]
Hey, remember last week, when I was blogging about how China was threatening Japan with a rare earth ban because the Japanse government had a Chinese boat captain in custody? And remember how I said that, "given the spate of flare-ups between Japan and China as of late, the last thing Tokyo will want to do is back down in the face of Chinese economic coercion"?
Japanese prosecutors have released the captain of a Chinese fishing boat, two weeks after a collision in disputed waters sparked a dramatic deterioration in ties between Beijing and Tokyo....
Prosecutors on the southern Japanese island of Okinawa, where Zhan was detained, said they would monitor both governments' response to their decision before deciding whether to indict him, but that course of action is looking increasingly unlikely.
They said the row caused by Zhan's detention and the possible impact on Japan-China ties had been a factor in their decision....
Japanese officials had earlier warned that the swift deterioration in bilateral ties posed a threat to the economies of both countries.
China was Japan's largest trading partner last year and Japan was China's third largest. Bilateral trade reached $147bn (£93.6bn) in the first half of this year – a jump of 34.5% over the same time last year, Japanese figures show.
"A cooling of relations between Japan and China over the Senkaku problem would be bad for Japan's economy, but it would also be a minus for China," Japan's finance minister, Yoshihiko Noda, said.
"It's desirable that both sides respond in a calm manner."
A few commentors to my last post took this opportunity to tell me to
go suck a lemon the errors of my ways. To which I must respond.... not so fast.
I had four points to make in that post:
A) Japan was unlikely to bow to economic pressure from China;
B) China's use of a rare earths export ban was not likely to have much leverage;
C) China was overestimating its overall ability to translate economic power into political leverage; and
D) Because of these actions, the rest of the Pacific Rim was going to start getting much closer to the United States.
Now, let's go through these in the context of this Associated Press story about the latest in this Sino-Japanese kerfuffle:
Tension between China and Japan bumped back up a notch Monday when Tokyo asked Beijing to pay for damages to patrol boats hit by a Chinese fishing vessel in disputed waters, countering China's demand for an apology over the incident.
The diplomatic back-and-forth shows that nationalistic sentiments stirred up by the incident — and the territorial dispute behind it — are not fading even after Tokyo released the ship's captain Friday amid intense pressure from China.
Welcoming the skipper home as a hero, China stunned Japan over the weekend by demanding an apology and compensation over his arrest, a move that reflects Beijing's growing self-confidence and its attempts to test the resolve of key neighbors like Japan, Washington's closest ally in the region.
Criticized at home for caving in to Chinese pressure, Prime Minister Naoto Kan's government responded by issuing its own demand for compensation and calling on Beijing to decide whether it wanted to repair frayed ties.
"At this point, the ball is now in China's court," said Chief Cabinet Secretary Yoshito Sengoku....
Some experts saw China's demand for an apology as overreaching — and bad publicity in a region where neighbors are already concerned about the nation's expanding military and political clout. China is embroiled in several other territorial disputes.
"Beijing has scored an own-goal here. It really reflects badly on them," said Jeff Kingston, director of Asian studies at Temple University's Tokyo campus. "All that smile diplomacy, reassuring regional neighbors that the rise of China is unthreatening, has just gone up in smoke."
More broadly, the dispute and others like it has created openings for greater U.S. engagement in Asia as China begins to vie with the U.S. for dominance in the region.
On Friday, President Barack Obama and Southeast Asian leaders sent China a firm message over territorial disputes, calling for freedom of navigation and peaceful resolution of disputes in seas that China claims as its own. Obama said the U.S. plans to "play a leadership role in Asia."
Hmmm.... well, Japan did hand over the captain, so it seems that I was pretty wrong on (A). That said, this story also suggests I'm a little right on (A) and very right on (C) and (D). China overreached -- again -- in demanding compensation and an apology (though looking past this latest episode, there are some indications that China recognizes its overreaching vis-a-vis the USA). This caused Japan to dig in its heels. And, finally, all of this is pushing the region closer to the United States.
[What about the rare earth lever?--ed.] Damien Ma knows more about this than I do:
Given the expansive universe of Japanese high-tech sectors, Japan depends on China for the bulk of its RE supplies. Now, China produces roughly 95% of global RE supplies, but has only about 1/3 of the world's total reserves. Having such immense control over a particular resource naturally leads to suspicion, especially among buyers, that China could wield "supplier leverage" to manipulate prices and supplies, much like how a cartel would behave....
China's supply dominance was driven by market dynamics in the first place. Other RE mines closed production, in part because of environmental issues, while China continued to produce at a low price. Now that price is rising in China, it might be more cost-effective to start mine development elsewhere. If China really is trying to be the "OPEC" of rare earth elements, then global markets would react to cartel-like behavior, probably by accelerating development, eventually undermining Chinese monopoly on supply. Problem is, development takes time, so for now, it's tough to get off Chinese supply.
At worst, I was slightly wrong on (B) in the short term -- and this doesn't get into Japan's stockpiling of rare eaarths. Furthermore, I am going to be much less wrong about this over time. China's market power over rare earths is clearly temporary. Regardless of whether they were trying to use their monopsony power to extract concessions from Japan, the perception of China's economic statecraft is going to encourage a lot of countries to subsidize their domestic supply.
So, to sum up: I was more right than wrong. I hereby dare my thoughtful and cantankerous readers to
go suck two lemons demonstrate the error of my interpretation yet again in the comments section.
There's been a lot of oh-my-God-China-is-eating-America's-lunch-have-you-seen-how-pretty-their-infrastructure-is?-kind of blather among the commentariat. And, to be sure, China has had a good Great Recession. But one of the points I've been making on this blog repeatedly is that, for all of China's supposed deftness, "China's continued rise seems to be occurring in spite of strategic miscalculations, not because of them."
Now, I had also assumed that China's leadership would quickly move down the learning curve and practice a more subtle form of statecraft. After reading Keith Bradsher in the New York Times today, however, I guess I was wrong:
Sharply raising the stakes in a dispute over Japan’s detention of a Chinese fishing trawler captain, the Chinese government has blocked exports to Japan of a crucial category of minerals used in products like hybrid cars, win turbines and guided missiles.
Chinese customs officials are halting shipments to Japan of so-called rare earth elements, preventing them from being loaded aboard ships this week at Chinese ports, three industry officials said Thursday.
On Tuesday, Prime Minister Wen Jiabao personally called for Japan’s release of the captain, who was detained after his vessel collided with two Japanese Coast Guard ships about 40 minutes apart as he tried to fish in waters controlled by Japan but long claimed by China. Mr. Wen threatened unspecified further actions if Japan did not comply.
Is this effort at economic statecraft going to accomplish Beijing's objectives? In a word, no. True, according to Bradsher, "China mines 93 percent of the world’s rare earth minerals, and more than 99 percent of the world’s supply of some of the most prized rare earths."
It's also true, however, that Japan has been stockpiling supplies of rare earths. Furthermore, this kind of action is just going to lead to massive subsidies to produce rare earths elsewherein the world (including the United States) and/or develop rare earth substitutes. Oh, and one other thing -- given the spate of flare-ups between Japan and China as of late, the last thing Tokyo will want to do is back down in the face of Chinese economic coercion.
Don't get me wrong -- if China persists in this ban, there will be come economic costs to the rest of the world. Those costs just won't translate into any political concessions. [UPDATE: The Wall Street Journal has an excellent follow-up story suggesting that China is not imposing a ban.]
It is hardly surprising that (reported) actions like these are leading the entire Pacific Rim right to Washington's door:
[R]ising frictions between China and its neighbors in recent weeks over security issues have handed the United States an opportunity to reassert itself — one the Obama administration has been keen to take advantage of.
Washington is leaping into the middle of heated territorial disputes between China and Southeast Asian nations despite stern Chinese warnings that it mind its own business. The United States is carrying out naval exercises with South Korea in order to help Seoul rebuff threats from North Korea even though China is denouncing those exercises, saying that they intrude on areas where the Chinese military operates.
Meanwhile, China’s increasingly tense standoff with Japan over a Chinese fishing trawler captured by Japanese ships in disputed waters is pushing Japan back under the American security umbrella....
“The U.S. has been smart,” said Carlyle A. Thayer, a professor at the Australian Defense Force Academy who studies security issues in Asia. “It has done well by coming to the assistance of countries in the region.”
“All across the board, China is seeing the atmospherics change tremendously,” he added. “The idea of the China threat, thanks to its own efforts, is being revived.”
Asserting Chinese sovereignty over borderlands in contention — everywhere from Tibet to Taiwan to the South China Sea — has long been the top priority for Chinese nationalists, an obsession that overrides all other concerns. But this complicates China’s attempts to present the country’s rise as a boon for the whole region and creates wedges between China and its neighbors.
This latest rare earth ban is just going to accelerate this trend. The ironic thing about this is that it's not like U.S. grand strategy has been especially brilliant. The U.S., however, has two big advantages at the moment. First, it's further away from these countries than China. Second, Washington's actions and rhetoric have been far more innocuous than Beijing's.
In yet another New York Times story, David Sanger provides a small clue as to whether Beijing either knows or cares about the blowback from its recent actions:
Early this month Mr. Obama quietly sent to Beijing Thomas E. Donilon, his deputy national security adviser and by many accounts the White House official with the greatest influence on the day-to-day workings of national security policy, and Lawrence H. Summers, who announced Tuesday that he would leave by the end of the year as the director of the National Economic Council....
[O]fficials familiar with the meetings said they were intended to try to get the two countries focused on some common long-term goals. The Chinese sounded more cooperative themes than in the spring, when two other administration officials were told, as one senior official put it, that “it was the Obama administration that caused this mess, and it’s the Obama administration that has to clean it up.”
Well, that is learning, but it's of a very modest kind.
Now, it is possible that Beijing has simply decided that its internal growth is so big that it can afford the friction that comes with a rising power. My assessment, however, is that they're vastly overestimating their current power vis-a-vis the United States, and they're significantly undererstimating the effect of pushing the rest of the Pacific Rim into closer ties with the United States (and India).
More significantly, and to repeat a theme, China is overestimating its ability to translate the economic interdependence of the Asia/Pacific economy into political leverage. With these misperceptions, however, China is risking some serious conflicts down the road.
Am I missing anything? I'm serious -- this problem ain't going away anytime soon.
One of the occupational hazards U.S. foreign policy wonks possess in abundance is the tendency to forget that domestic politics is really important. Regardless of ideology, most members of the foreign policy community despair of how little time the President devotes to foreign affairs -- because he cares about things like "getting re-elected" or "maintaining popular support" or "responding to public opinion."
I'd like to think that I'm at least aware of this failing, and remind myself on a daily basis that Tip O'Neill had a point.
So, with that bias acknowledged, it's still worth pointing out that Barack Obama has foolishly decided to blow off the most dynamic region in the globe -- again:
President Obama canceled his trip to Australia, Indonesia and Guam late Thursday night as oil continued to stream into the Gulf of Mexico in what he has called the worst environmental disaster in American history.
His decision came as officials reported progress containing the oil leak at the bottom of the Gulf of Mexico.
Mr. Obama is to visit the Gulf Friday to assess the situation and meet with officials responding to the crisis. While the White House statement offered no reason for scratching the Asia trip this time, officials in recent days had grown increasingly convinced that it was untenable for the president to leave the country for a week with the oil spill still unchecked....
This was the second time Mr. Obama has scrubbed the trip to Australia and Indonesia. He was originally scheduled to travel there in March but canceled at the last minute to stay in Washington to lobby for passage of his health care legislation. He also had passed up a trip to Indonesia in connection with a regional summit meeting held in Singapore in November 2009 (emphasis added).
Correct me if I'm wrong, but for the past month President Obama has been in the country, making many, many pronouncements about the oil leak. You know what effect that has had on the spill? Absolutely zero. There is no policy reason whatsoever for Obama to stay in the country because of the spill (at this point, I'm not even sure there's a political reason, but will defer to commenters on that question).
What's particularly frustrating is that Peter Baker's story contains the seeds that contradict Obama's justification for staying in the country:
White House officials said they will not let the focus on the oil spill detract from the rest of the president’s economic, legislative and foreign agenda, pointing out that he still seems likely to sign fiunancial regulation reform by next month, push through his Supreme Court nominee and win sanctions against Iran at the United Nations Security Council.
“The American people don’t elect somebody, I think, that they don’t believe can walk and chew gum at the same time,” Robert Gibbs, the White House press secretary, told reporters earlier Thursday. “Sometimes it feels like we walk and chew gum and juggle on a unicycle all at the same time. I get that.”
But, he added, “there’s a whole lot of people working on a whole lot of things in the White House, and we’re able to do more than several things at once.” (emphasis added)
That's great, Bob -- except that there are certain things that only a President can do. Unless he has some engineering expertise that he's been keeping under wraps, there's very little that Obama can do by staying in the countrry to focus on the spill. On the other hand, Obama's comparative advantage has been to help improve U.S. relations with the rest of the world. Australia and Indonesia are vital supporter states, and yet this president has just given them the cold shoulder -- for the second time, remember -- in order to focus on domestic politics.
The Obama administration has dealt with North Korea as best they could, and after some stumbles have moved down the learning curve in handling the China portfolio. Their approach to the rest of the Asia/Pacific region, however, has gone from sclerotic to just plain awful. The United States needs good relations with these countries -- but this administration has plainly revealed its preferences on this issue. If you look at the Obama administration's behavior, in their minds, the Pacific Rim simply doesn't count.
Question to readers: is the Gulf spill such a political crisis that it requires the Obama administration to blow off allies?
SAUL LOEB/AFP/Getty Images
There are two ways to understand the current dynamics playing out on the Korean peninsula.
First, everything you need to know about the standoff on the Korean peninsula is encapsulated in this James Blitz analysis in the Financial Times:
[O]n one point there is broad agreement: military conflict between North and South would have unimaginable consequences, in terms of fatalities and economic devastation.
A range of factors have long convinced military strategists that war is pretty much unthinkable, however unpleasant the rhetoric may get.
For North Korea, the fundamental risk of any conflict is that it would almost certainly lose, given its conventional military weakness. For South Korea, the risk is that while it might ultimately win, it would suffer immense casualties.
Second, in an expert display of connecting any international relations crisis to Kevin Bacon in less than six steps [I'm pretty sure that Six Degrees of Kevin Bacon covers something different?!--ed. Well, it works for IR flashpoints too!!] you can learn the fine art of playing Chicken by watching the tractor fight sequence from Footloose:
This has been North Korea's bargaining advantage for decades -- everyone else in the world thinks they're crazy enough to stay on the tractor. This means that the rational thing to do is to get off the tractor, which translates into granting them concessions.
Alas, Kevin Bacon doesn't explain everything under the sun in international relations. As Christian Oliver explains in the FT, there are many possible explanations for the Cheonan incident, and some of them involve internal discord in the Hermit Kingdom. Paradoxically, as Thomas Schelling explained oh so many decades ago, sometimes domestic weaknesses can be parlayed into international strength.
This puts South Korea in a big bind. So long as China is reluctant to sanction North Korea -- and they're very reluctant to do this -- Seoul either needs to out-crazy Pyongyang or come up with a punishment that hurts North Korea without escalating military tensions.
So my suggestion, based on this Reuters backgrounder, would be to either ban broadcasts of the 2010 World Cup tournament in North Korea, or even better, ban North Korea's side from participation in the tournament due to start next month. There is precedent for this: Yugoslavia was barred from participating in the 1994 World Cup because of ongoing United Nations sanctions. It's also a sanction that would not benefit any internal hardliners responsible for the Cheonan.
I confess I'm grasping at straws here -- I'm holding out for a hero who can solve this policy conundrum. Readers are encouraged to offer their own policy suggestions in the comments.
That's the question that's being asked at a UCLA conference I'm attending today. I'll blog some of the more interesting answers I hear if I get a chance.
In the meanwhile, however, there's no reason that readers can't answer that question on their own in the comments.
Lost in the Nobel hoopla yesterday was this fascinating New York Times story by Michael Wines about the ways in which China's economy and foreign economic policy are vexing its neighbors.
China has long claimed to be just another developing nation, even as its economic power far outstripped that of any other emerging country.
Now, it is finding it harder to cast itself as a friendly alternative to an imperious American superpower. For many in Asia, it is the new colossus.
“China 10 years ago is totally different with China now,” said Ansari Bukhari, who oversees metals, machinery and other crucial sectors for Indonesia’s Ministry of Industry. “They are stronger and bigger than other countries. Why do we have to give them preference?”
To varying degrees, others are voicing the same complaint. Take the 10 Southeast Asian nations in the Association of Southeast Asian Nations, known as Asean, a regional economic bloc representing about 600 million people. After a decade of trade surpluses with Asean nations that ran as high as $20 billion, the surplus through October totaled a bare $535 million, according to Chinese customs figures, and appears headed toward a 10-year low. That is prompting some rethinking of the conventional wisdom that China’s rise is a windfall for the whole neighborhood.
Vietnam just devalued its currency by 5 percent, to keep it competitive with China. In Thailand, manufacturers are grousing openly about their inability to match Chinese prices. India has filed a sheaf of unfair-trade complaints against China this year covering everything from I-beams to coated paper.
Read the whole thing -- Wines does a nice job of contrasting China's policy responses in 2008 to what it did a decade earlier. To sum up: those dogs that were not barking previously are starting to growl.
This problem is not going away anytime in the near future. The problem for the rest of the Asia/Pacific is that their comparative advantages (labor costs, process innovations) are also China's comparative advantages. Unless China starts acting as an important consumer market as well -- which admittedly might be happening as I type this -- then China's mantra of being a "responsible power" is going to meet a greater level of static very, very soon.
UPDATE: The Chicago Council on Global Affairs' Tom Wright has a report on how the financial crisis has affected China's soft power in the Asia/Pacific region that buttresses the Wines story.
I'm late to this party, but two quick thoughts on Obama's Tokyo speech:
1. Last week a sharp foreign policy observer -- and a former campaign advisor for Obama -- made an interesing lexicographical observation to me about the Obama administration's foreign policy rhetoric to date. They use the word "partnership" a hell of a lot more often than they use the word "alliance." That's not terribly surprising, given their emphasis on talking with adversaries, forming great power concerts, etc. Still, there are times when it's important to reach out more to one's allies than one's rivals.
The Tokyo speech was one of those occasions, and I'm happy to report that Obama used "alliance" 12 times and "partnership" only 9 times. Perhaps this says more about the lay of the land in the Pacific Rim than anything else, but it does suggest that the adminstration is sensitive to regional nuances.
2. That said, I was underwhelmed with the trade outreach of the speech. Some reports suggest that Obama announced that the U.S. would join the Trans-Pacific Partnership, an APEC trade forum comprising, at the moment, of Brunei, Singapore, Chile and New Zealand (with Vietnam and Australia thinking about joining).
What Obama actually said, however, was:
The United States will also be engaging with the Trans-Pacific Partnership countries with the goal of shaping a regional agreement that will have broad-based membership and the high standards worthy of a 21st century trade agreement.
So what exactly does that mean? Helene Cooper points out the ambiguities of that language in the New York Times:
Although Mr. Obama did open the door during his speech in Tokyo on Asia policy, he did not explicitly say that the United States would join the pact. A formal announcement that the United States is beginning negotiations would undoubtedly kick off criticism from free-trade opponents in the United States and pushback from Congress.
Mr. Obama spoke, instead, of “engaging the Trans-Pacific Partnership countries with the goal of shaping a regional agreement that will have broad-based membership and the high standards worthy of a 21st century trade agreement.”
That line left many trade envoys already in Singapore scratching their heads: did Mr. Obama mean that the United States would begin formal talks to join the regional trade pact, which presently includes Singapore, Brunei and New Zealand, and could later include Vietnam — an addition that could lead to more Congressional pressure at home?
Many regional officials have been waiting for the United States to join the initiative as a demonstration that Washington will play a more active role in the region. But the Obama administration has yet to establish a firm trade policy, as it is still reviewing its options.
White House officials were not much clearer on what Mr. Obama meant when they were pressed on this after the speech. Michael Froman, an economics expert on the National Security Council, said that what Mr. Obama meant was that he would engage with the initiative “to see if this is something that could prove to be an important platform going further.”
Wow, that's some real enthusiasm coming from the G-20 sherpa.... not.
For an administration that likes to pride itself as savvy in the ways of foreign policy subtleties, I still don't think they grasp the fact that trade policy is now embedded into foreign policy in the Asia/Pacific Region.
My latest column in The National Interest online is up, and it sounds a warning about the Obama administration's policy malaise on both the Asia/Pacific region and the #1 issue to countries in the Asia/Pacific region -- namely, trade:
Obama’s policy malaise on trade will not win him friends in a region hell-bent on deepening economic integration. U.S. policy on trade liberalization has stalled out so badly that rumors are swirling around the Beltway that U.S. Trade Representative Ron Kirk is contemplating resignation. Meanwhile, countries in the region are signing free-trade agreements with each other at a record pace. The European Union has inked a free-trade deal with South Korea, and is negotiating one with Japan. In contrast, the chances of the Korea-United States free trade agreement passing this Congress is hovering around zero. The comparison with China is particularly dispiriting....
The United States has not been eclipsed yet—the bevy of activity in the Pacific Rim is a lot more about hedging than balancing against the United States. Nevertheless, if President Obama wants to be taken seriously in the region, he needs to take the region’s issues more seriously. Trade is not merely about economics—it’s about foreign policy too. Just because Washington ignores a policy issue does not mean others do not think it important. As we are learning, some regions can bypass America altogether if they so choose.
In a very disturbing sign of the times, I see that former State Department official Evan Feigenbaum has written something similar for the Financial Times:
[T]he business of Asia is business. Without more vigorous trade engagement, such diplomatic efforts cannot secure America’s position in a changing Asia. The US could soon face a region less willing to accommodate its commercial and financial interests.
Many eons ago in graduate school Only recently Evan and I woul talk about the Asia/Pacific when we were matriculating in graduate school together -- and, more often than not, we disagreed with one another. The only times we agreed was when some serious s**t was going down. So take this consensus for what you will.
Throughout the course of the Bush administration, a constant irritant in the Asia/Pacific region was Bush's tendency to place antiterrorism at the top of the queue in Asia/Pacific Economic Cooperation (APEC) discussions. Not that anti-terrorism wasn't important, but APEC was not the proper forum for that -- APEC is all about regional economic integration. China, by wanting to talk about trade, made a lot of diplomatic headway by distinguishing itself from the United States.
I bring this up because, according to the FT's Edward Luce, it looks like the Obama administration's policy malaise on trade is not winning it any allies in East Asia:
In a meeting with President Barack Obama last week, Lee Kuan Yew, the veteran former prime minister of Singapore, said he felt privileged to meet the US leader at a “time of renewal and change in America and during a period of transition where the world order is changing”.
At private meetings around Washington, however, Mr Lee’s message was rather more blunt.
“You guys are giving China a free run in Asia,” he told Fred Bergsten, the director of the Peterson Institute for International Economics. “The vacuum in US policy is enabling the Chinese to make the running.”
Mr Lee’s timing was apposite. On Wednesday Mr Obama leaves for Tokyo for a regional tour that will include China, South Korea and Singapore, where Mr Lee’s government is hosting a summit of the Asia Pacific Economic Co-operation (Apec) forum this weekend. Surveys in each country show that Mr Obama’s popularity has helped to restore the battered US standing in the region.
But the views of Asian governments do not always chime with those of their public. Across the region, concern is rising about the absence of US leadership on trade since Mr Obama took office. Few believe that he has the will or power to restart the Doha round of global trade talks – and he has not asked Congress for a renewal of the presi- dent’s fast-track negotiating authority.
Fewer still believe that he will be able to ratify the landmark 2007 US-South Korea free-trade agreement in the face of strong hostility in Congress....
while globalisation gets steadily less popular in the US, other parts of the world are moving ahead. South Korea recently concluded a free-trade deal with Europe. Japan is holding similar talks with the European Union. Ironically, the EU broached the talks as a way of protecting itself against the trade-diverting effects of the now moribund US-Korea deal.
US business lobby groups are hoping Mr Obama will be able to achieve some kind of a breakthrough in Seoul next week. Given that it would be futile for him to send the free-trade agreement back to Capitol Hill, any new steps would have to include a renegotiation of the deal to include better market access for US cars.
“It is really important to understand just how badly the US is screwing itself on trade,” said Mr Bergsten. “By having an inactive trade policy, others are rushing to fill the vacuum.”
For an administration that claims it wants to have better relations with its allies, Obama and his foreign policy team have been remarkably tone-deaf when it comes to trade policy.
At every major summit meeting since he's come to office, Obama has heard complaints about the lack of U.S. leadership on the trade front. This administration has demonstrated that it's not afraid to tackle multiple, complex challenges at the same time -- and yet they've been either mute or worse when it comes to trade.
Barack Obama's decision to put trade policy in a lockbox and throw away the key is utterly appalling -- and, from a foreign policy perspective, completely counterproductive.
Your humble blogger will be MIA for the next few days, as he is attending the annual meeting of the Japanese Association of International Relations in Kobe, Japan for the next few days.
Let me assure my readers that my decision to flee leave the country has nothing whatsoever to do with recent events. It's just a very, very, very, very happy coincidence.
While I'm gone, let me recomend reading Evan Feigenbaum's new Council on Foreign Relations report, "The United States in the New Asia." I'll certainly be reading it on the flight. The latest issue of The National Interest is also worth a gander.
And now a request from my readers -- what's worth reading that I haven't commented on? In other words, what should I be reading?
Following up on my dollar post from earlier this week, I see that Paul Krugman is talking a related issue in his New York Times column today -- the refusal of the renminbi to depreciate against the dollar:
Many economists, myself included, believe that China’s asset-buying spree helped inflate the housing bubble, setting the stage for the global financial crisis. But China’s insistence on keeping the yuan/dollar rate fixed, even when the dollar declines, may be doing even more harm now.
Although there has been a lot of doomsaying about the falling dollar, that decline is actually both natural and desirable. America needs a weaker dollar to help reduce its trade deficit, and it’s getting that weaker dollar as nervous investors, who flocked into the presumed safety of U.S. debt at the peak of the crisis, have started putting their money to work elsewhere.
But China has been keeping its currency pegged to the dollar — which means that a country with a huge trade surplus and a rapidly recovering economy, a country whose currency should be rising in value, is in effect engineering a large devaluation instead.
Krugman then goes on to excoriate the U.S. Treasury department for not upbraiding the Chinese more on this.
Fair enough, but the thing is, the United States is not the country that's hurt the most by this tactic. It's the rest of the world -- particularly Europe and the Pacific Rim -- that are getting royally screwed by China's policy. These countries are seeing their currencies appreciating against both the dollar and the renminbi, which means their products are less competitive in the U.S. market compared to domestic production and Chinese exports.
This leads to the title of this post. Krugman presumes that the U.S. has the strongest incentive to talk to China about this issue. If one thinks of the U.S. acting as the hegemon, that's possibly true. As a matter of direct economic interest, however, why haven't the Europeans and East Asians been screaming bloody murder about this? China's policies are forcing them to take actions they don't want to take -- so why aren't they complaining more loudly about this?
Well, Glenn Kessler's rundown on what's happeing in Phuket is rich with blog-worthy goodness:
The war of words between North Korea and the United States escalated Thursday, with North Korea's Foreign Ministry lashing out at Secretary of State Hillary Rodham Clinton in unusually personal terms for "vulgar remarks" that it said demonstrated "she is by no means intelligent."
Clinton, who earlier this week likened North Korea to an unruly child, has rallied international isolation of North Korea at a 27-member regional security forum here. She met with her Russian, Chinese, South Korean and Japanese counterparts -- the other key partners in suspended six-nation disarmament talks--and won strong statements of support from many delegations....
The Foreign Ministry statement attacking Clinton also amply demonstrated the North Korean mood. "We cannot but regard Mrs. Clinton as a funny lady as she likes to utter such rhetoric, unaware of the elementary etiquette in the international community," a Foreign Ministry spokesman said, according to North Korean media. "Sometimes she looks like a primary schoolgirl and sometimes a pensioner going shopping."
The fit of pique was apparently inspired by an interview Clinton gave ABC News while visiting New Delhi.
"What we've seen is this constant demand for attention [from North Korea]," Clinton said. "And maybe it's the mother in me or the experience that I've had with small children and unruly teenagers and people who are demanding attention -- don't give it to them, they don't deserve it, they are acting out." (emphases added)
Some random thoughts:
1. If I'm Chelsea Clinton, I'd be pretty cheesed off right now. I never thought of her as particularly "unruly," but what other teenagers has Hillary spent time with? [Cough, cough!!--ed. Oh... right.]
2. You have to give the North Koreans major chutzpah points for accusing other countries of being "unaware of the elementary etiquette in the international community." [UPDATE: As Rob Farley puts it, "the Nork rhetoric vaguely reminds me of Daily Kos threads from the early days of the 2008 Democratic primary."]
3. It's worth pointing out that we're now in a place where the Bush administration look positively dovish on North Korea compared to the Obama administration. Here's another way of looking at it: Both Dick Cheney and John Bolton are more comfortable with the Obama administration's Nort Korea policy than Bush administration's. Think about that for a second.
4. A related point -- remember how the Bush administration got pilloried for refusing to talk with Iran, arguing that doing so would confer a reward on the regime? Kessler quotes Clinton as saying, with regard to the Six-Party Talks: "We are open to talks with North Korea. But we are not interested in half measures. We do not intend to reward the North just for returning to the table." Now there is a difference between this position and that of the Bush administration vis-à-vis Iran -- but it's not nearly as big a difference as Obama defenders are likely to claim.
5. What's the end game in all of this? I think maybe, just maybe, the international community has found a status quo that makes the North Koreans less comfortable than everyone else. Assuming that the interdiction and sanctions regime works well -- which is a robust but not entirely unreasonable assumption -- then North Korea gets nothing for thumbing its nose at the world except some more weapons-grade fissile material.
That's not nothing, but it's not all that much either. Pyongyang already has a deterrent to prevent invasion. It can't threaten nuclear blackmail all that persuasively, because it's a pretty hollow threat on their part. And if they can't sell their technology to other countries, then there's no profit in it for them either. Which means they're stuck, wallowing in their own barren dirt, feeling very, very lonely.
Am I missing anything?
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.