A. Iain Johnston has the lead article in the latest issue of International Security.  It's available for free right now, and it's quite the doozy.  Entitled "How New and Assertive is China's New Assertiveness?", Johnston picks apart the claim made by many (including your humble blogger) that China's post-2008 foreign policy represented anything all that much out of the ordinary.  From the abstract: 

There has been a rapidly spreading meme in U.S. pundit and academic circles since 2010 that describes China's recent diplomacy as “newly assertive.” This “new assertiveness” meme suffers from two problems. First, it underestimates the complexity of key episodes in Chinese diplomacy in 2010 and overestimates the amount of change. Second, the explanations for the new assertiveness claim suffer from unclear causal mechanisms and lack comparative rigor that would better contextualize China's diplomacy in 2010. An examination of seven cases in Chinese diplomacy at the heart of the new assertiveness meme finds that, in some instances, China's policy has not changed; in others, it is actually more moderate; and in still others, it is a predictable reaction to changed external conditions. In only one case—maritime disputes—does one see more assertive Chinese rhetoric and behavior.

Johnston has forgotten more about Chinese foreign policy than I will ever learn, so I'd encourage you to give the whole piece a read.  My take is that I'm actually not that far apart from Johnston.  As he notes, China's foreign policy had its share of belligerent episodes prior to 2008.  He also acknowledges that there has been some movement by China on a couple of issues, including the maritime disputes. He also omits any discussion of some of the cases that I've highlighted on the blog, including the reaction to Liu Xiaobo's Nobel Peace Prize, as well as the kerfuffle with Google. 

What's really interesting, however, is the second part of that abstract: 

The speed and extent with which the newly assertive meme has emerged point to an understudied issue in international relations—namely, the role that online media and the blogosphere play in the creation of conventional wisdoms that might, in turn, constrain policy debates. The assertive China discourse may be a harbinger of this effect as a Sino-U.S. security dilemma emerges (emphasis added).

Whoa there!!  Bloggers are constraining policy debates? 

Here's the relevant passage from the article itself (p. 46-47): 

The conventional description of Chinese diplomacy in 2010 seems to point to a new, but poorly understood, factor in international relations—namely, the speed with which new conventional wisdoms are created, at least within the public sphere, by the interaction of the internet-based traditional media and the blogosphere. One study has found, for instance, that on some U.S. public policy issues, the blogosphere and the traditional media interact in setting the agenda for coverage for each other. Moreover, on issues where this interaction occurs, much of the effect happens within four days. Other research suggests that political bloggers, for the most part, do not engage in original reporting and instead rely heavily on the mainstream media for the reproduction of alleged facts. The media, meanwhile, increasingly refers to blogs as source material. The result is, as one study put it, “a news source cycle, in which news content can be passed back and forth from media to media.” Additional research suggests that the thematic agendas for political campaigns and politicians themselves are increasingly influenced by blogosphere-media interaction.

Together, this research suggests that the prevailing framework for characterizing Chinese foreign policy in recent years may be relevant for the further development (and possible narrowing) of the policy discourse among media, think tank, and policy elites. As the agenda-setting literature suggests, this is not a new phenomenon. What is new, however, is the speed with which these narratives are created and spread—a discursive tidal wave, if you will. This gives first movers with strong policy preferences advantages in producing and circulating memes and narratives in the electronic media or in high-profile blogs, or both. This, in turn, further reduces the time and incentives for participants in policy debates to conduct rigorous comparative analysis prior to participation.

And here I'm going to have to disagree with Johnston a bit.   On a day in which the mainstream media demonstrated a truly excellent ability to spread its own misinformation -- and, in response, said mainstream media blamed Twitter -- I'm highly dubious that the blogs play that much of a causal role.  To be sure, I do think blogs can sometimes perpetuate falsehoods.  That said, most of Johnston's evidence for blog effects comes from domestic policy, and methinks the foreign policy media ecosystem functions a wee bit differently. 

If I had to wager why the misperceptions about China that Johnston enumerates have emerged, I'd hypothesize, in descending order of importance, the following reasons: 

1)  Foreign affairs columnists and international relations analysts who hadn't paid that much attention to China prior to 2008 had no choice but to pay a lot of attention to Beijing after the financial crisis;

2)  Interest groups in the United States that were traditionally predisposed towards a more dovish view of China started feeling burned by Beijing on matters unrelated to security. 

3)  The media likes a trend, and a lot of the incidents that Johnston chronicles took place in rapid-fire fashion from the end of 2009 to the middle of 2010. 

4)  The Obama administration's rebalancing strategy validated the perception that China was doing something different. 

5)  Blogs acted as an amplifier for all of these other trends.

What's ironic about this is that in the article, Johnston properly takes a lot of the conventional wisdom to task for ahistoricism and problematic causal arguments in assessing Chinese behavior after 2008.  I'd wager, however, that Johnston has done the exact same thing with respect to the foreign policy blogosphere. 

What do you think?   

Zaki Laïdi has a fascinating op-ed in the Financial Times blasting the current state of global governance. It's fascinating because of the mix of not-entirely-accurate observation and breathtakingly naïve prescription. The good parts version:

In principle, the emergence of a multipolar world, in which the US is no longer the only very powerful country, should boost “multilateralism” – institutionalised co-operation among states in pursuit of shared objectives. It should boost efforts to achieve free trade via the World Trade Organisation, poverty reduction through the World Bank, and international security through the UN.

Yet the reality is different. Countries are seeking to extricate themselves from global agreements in order to extract concessions from partners on a bilateral basis or to protect national sovereignty.

Take the case of the WTO. A conflict between India and the US over agricultural subsidies derailed a final compromise in the summer of 2008. This would have – finally – concluded the Doha round of trade talks, which were launched in Qatar in 2001. Negotiations have stalled since the US-India spat. The main responsibility for this failure falls on the US, which believes the system of multilateral trade no longer offers the advantages it used to. The priority for the US is to secure access to markets through enhanced bilateralism. Hence the Obama administration’s drive to agree the trans-Pacific Partnership for Asia and, more recently, to conclude the Transatlantic Trade and Investment Partnership for Europe.

In each case, the strategic objective is to contain China’s rise by setting a high bar for regulatory standards. The novelty is that Europe, which has long defended multilateralism, is now succumbing to the temptation of bilateralism even while it remains completely incapable of assuming political responsibility for its trade policy...

It is important to understand that the collapse of multilateral trade we are witnessing today is far from being an isolated case. Climate talks since the 2009 Copenhagen conference have challenged the multilateralism heralded by the Kyoto protocol of 1997. The idea then was to move forward on the basis of a shared objective – the reduction of greenhouse gas emissions. Today countries only make commitments on climate change on the basis of a very narrow assessment of their national interests. The idea that shared commitments – rather than individual interests – shape behaviour is now dead....

Since the end of the cold war, Europeans have believed deeply in the existence of a global commons – and the declining importance of national sovereignty. The conduct of both the US and emerging countries suggests the opposite. Power politics is back. Multilateralism is dying.

OK, a few things here: 

1) It was a lot easier to take this "Europeans don't really believe in national interests anymore, we're so above all that, so the rest of the world should listen to us" guff prior to the Eurozone crisis. Watching Germany and other Northern European nations make sure that their national interest gets executed through EU institutions, however, makes this canard a bit harder to swallow. 

2) I hate to break it to Laïdi, but during the 1990s the Europeans could afford the luxury of believing in the growing power of multilateralism. That suited their beliefs and seemed to accord with the facts on a surface level. In point of fact, however, it was the growing power of the United States -- along with the strong support and coordination of its European allies -- that made multilateralism work. The idea that multilateralism should work better when power is more dispersed is an ... odd notion. 

3) If Laïdi is really gonna go there on trade, let's ask  blunt question -- exactly which jurisdiction triggered the explosion in bilateral free-trade agreements and preferential trade agreements?  Hold on, I'll wait ... but I bet everyone already knows the answer. 

4) As I've argued at length elsewhere, focusing on Doha and Copenhagen will lead to Laïdi's conclusions -- but those cases are not necessarily representative of global governance writ large. On a raft of other dimensions, the multilateral system has worked surprisingly well.

5) Finally, the real problem with  Laïdi's argument is that it fosters a spectacularly naïve narrative about how multilateral arrangements are created in the first place. This is hardly the first moment when great powers have created club-like arrangements in an effort to move the multilateral status quo. In fact, I'm pretty sure that some big books have been devoted to this topic.   

The reason the European Union has had success in pushing its version of global rules has little to do with its love of multilateralism and a lot to do with its market power and institutional capabilities. The sooner that European international relations commentators appreciate this, the better.

Am I missing anything? 

Your humble blogger has been too hard at work trashing his diminished reputation for seriousness working on other projects to blog about North Korea as of late. Now, the situation on the Korean Peninsula has been such a predictable cycle of DPRK provocative action, measured response, and more provocative action that I've been tempted to automate these posts the same way I have with Iran.

Still, as one reviews recent behavior, it's necessary to acknowledge that this cycle looks a little different. When Nick Kristof tweets that "I've been covering North Korean pugnacity and brinksmanship for 25 years, and I'm nervous about what might happen," the rest of us snap to attention.

So, after the missile test and the third nuclear test and the inevitable ratcheting up of United Nations sanctions, what's so troubling now? Well…

1) There was the novel threat from a North Korean general to launch a pre-emptive nuclear strike against the United States, causing Washington to "be engulfed in a sea of fire."

2) North Korea has also declared that the 1953 armistice with South Korea is now "invalid," cutting off the direct phone link with South Korea at Panmunjom.

3) North Korea's propaganda machine has ramped up against new South Korean leader Park Geun-hye in a rather sexist fashion, decrying the "venomous swish of skirt" coming from the Blue House. In Korean, this language implies an "overly aggressive" woman.

4) Something something Dennis Rodman inanity something.

5) North Korea has dramatically ramped up the number of air force sorties, from 100 a day last summer to at least 550 a day now -- a number that comes close to matching the South Korean daily number.

So, seriously, WTF, Kim Jong Un? Is this simply a more severe version of typical DPRK brinkmanship, or is this something altogether new and destabilizing?

Well … I think it's the former. First, let's just ignore the DPRK's rhetoric, because it's always over the top -- or, as with Rodman, completely disingenuous. Let's look at the DPRK's actions. Here, even the cancellation of the armistice doesn't necessarily mean much, as McClatchy's Tom Lasseter points out:

Pyongyang is infamous for issuing dramatic but empty threats, like turning its enemies into an apocalyptic "sea of fire." The North has also announced on several previous occasions that it was pulling out from the armistice, most recently in 2009.…

The last time North Korea disconnected the hotline, in 2010, was a year when the North killed four South Koreans when it shelled an island and was accused of torpedoing a South Korean naval ship, killing 46 sailors.

But Yonhap also reported that the North had not severed another North-South communication line, this one related to a North Korean industrial zone where South Korean companies operate.

So … nothing much new here. Beyond that there's the ramping up of air sorties, which does seem like a more powerful signal, if for no other reason than that it's actually a costly act. And beyond that … a lot of hot air.

So does that mean I can automate my North Korea posts? Well, Fareed Zakaria has a different spin:

No one knows for sure what is going on. It is highly unlikely that these moves are being conceived and directed by Kim Jong Un, the young leader who succeeded his father, Kim Jong Il. North Korea’s military dictatorship has wedded itself to the third generation of the Kim dynasty, which now seems to serve mostly as a unifying symbol for its people. But it is unlikely that a 28-year-old with almost no background in politics or experience in government is conceiving and directing these policies. (He does appear to have free rein on basketball policy in the hermit kingdom.)

The most likely explanation for North Korea’s actions is that it is trying to get attention. In the past, its provocations usually led to international (especially American) efforts to defuse tensions. Then came negotiations, which led to an agreement of sorts, which the North soon cheated on, which led to sanctions, isolation and, finally, North Korean provocation again.

The pattern may be repeating — but it’s a high-stakes game, with nuclear weapons, brinkmanship and hyper-nationalism all interacting. Things could go wrong. The most important new development, however, is China’s attitude change. In a remarkable shift, China — which sustains its neighbor North Korea economically — helped draft and then voted last week for U.N. sanctions against Pyongyang.

For decades, Beijing saw Pyongyang as a historical ally. But now, a senior Obama administration official told me Wednesday, “We are clearly hearing increasingly levels of frustration and concern” from Beijing about North Korea.

Zakaria is correct to point out Beijing's growing disenchantment with Pyongyang. But I tend to share Jennifer Lind's assessment that this disenchantment won't necessarily lead to any dramatic changes:

One shouldn't exaggerate the significance of these recent developments. After all, in the U.N. negotiations over sanctions -- this time as before -- the Chinese have consistently played the role of watering down the degree of punishment imposed against Pyongyang. And in the past Chinese firms have helped North Koreans evade sanctions. It remains to be seen whether Beijing intends to enforce the new measures.…

Because the specter of North Korea's collapse could potentially destabilize the Korea peninsula, Beijing may continue to shield Pyongyang. But the two country's [sic] increasingly divergent interests suggest that China's dissatisfaction with North Korea is only likely to grow.

I'd be even more skeptical. Obviously, China's leadership would prefer North Korea to act in a less provocative manner -- but they really don't want a disintegrating North Korean state. So even if they're disenchanted, they won't apply the necessary pressure to foment regime change or regime collapse. Which means that Pyongyang will still have carte blanche to provoke everyone else.

So my take is … not much has changed. I suspect that the reason for all of the amping up has to do with domestic politics on all sides. On the one hand, Kim Jong Un is playing to his own military base. On the other hand, North Korea is also trying to suss out the policy preferences and resolve of the new leadership in both South Korea and China.

Unless and until Beijing gets fed up enough to desire a strategic shift on the Korean Peninsula, I'm dubious that anything will change.

Am I missing anything?

For the past few years, a low level theme that occasionally pops into my news feed is the idea of greater Sino-Pakistani cooperation.  Now this has a certain amount of realpolitik sense to it.  The United States and Pakistan are not exactly on the best of terms, China is a rising power, they share a comon interest in containing India, yadda, yadda yadda.  As a result, there has been the occasional press story about closer ties, which begets the inevitable U.S.-based blog posts about China expanding its "string of pearls" strategy of more deepwater ports in the Asia/Pacific region.

There's just one thing.  The more closely one reads these stories, the less clear it is that China wants a string of pearls.  Most of these stories talk about great Pakistani enthusiasm for more Chinese involvement.  That enthusiasm is not really reciprocated by China, however.  Consider Jane Perlez's New York Times story from October 2011:   

A rising China with global ambitions is unlikely to supplant the United States in Pakistan, according to Chinese experts on Pakistan, as well as Pakistani and American officials. And while Pakistan’s latest flirtations with Beijing have been received cordially, Pakistani officials have walked away from their junkets with far less in hand than they might have hoped....

China’s core interests lie elsewhere — in its competition with the United States and in East Asia, experts say. China has shown little interest in propping up the troubled Pakistani economy, consistently passing up opportunities to do so.

Despite China playing it cool, Pakistan has continued to fall all over itself to attract greater Chinese engagement in their country.  Which leads us to today's headline in the New York Times:  "Chinese Firm will Run Strategic Pakistani Port."   Sounds ominous for U.S. interests... until one reads Declan Walsh's actual story:

Pakistan is handing management control of a strategic but commercially troubled deep-sea port to a Chinese company, the information minister confirmed Thursday....

The fate of Gwadar, once billed as Pakistan’s answer to the bustling port city of Dubai, United Arab Emirates, has been a focus of speculation about China’s military and economic ambitions in South Asia for the past decade. Some American strategists have described it as the westernmost link in the “string of pearls,” a line of China-friendly ports stretching from mainland China to the Persian Gulf, that could ultimately ease expansion by the Chinese Navy in the region. Gwadar is close to the Strait of Hormuz, an important oil-shipping lane.

But other analysts note that Gwadar is many years from reaching its potential, and they suggest that fears of creeping Chinese influence might be overblown. “There may be a strategic dimension to this, where the Chinese want to mark their presence in an important part of the world,” said Hasan Karrar, an assistant professor of Asian history at the Lahore University of Management Sciences, referring to the management transfer at Gwadar. “But I wouldn’t go so far as saying this implies a military projection in the region.”....

Pakistan has failed to build the port or transportation infrastructure needed to develop the port, the property bubble has burst and, according to the port management Web site, the last ship to dock there arrived in November. “The government never built the infrastructure that the port needed — roads, rail or storage depots,” said Khurram Husain, a freelance business journalist. “Why would any shipping company come to the port if it has no service to offer?”

According to reports in the Pakistani news media, the Port of Singapore Authority sought to withdraw from the management contract after the Pakistani government failed to hand over land needed to develop the facility.  (emphasis added)

This greater Chinese involvement, it should be noted, also comes after Beijing rebuffed Pakistani requests to turn Gwadar into a naval base. 

So, to sum up:  despite Pakistan prostrating itself before China, Beijing has been extremely leery of getting too enmeshed in that country.  It has rejected repeated requests for military basing, and only now has a commercial Chinese company agreed to manage a port that appears to be the Pakistani exemplar of "white elephant." 

So please, no "strong of pearls" posts from the national security blogosphere today.  These pearls are about as fake as you can get. 

Am I missing anything? 

Every five years or so the National Intelligence Council releases a Global Trends report about what the world will look like a generation from today.  The Global Trends 2030 report is now out, and if my Twitter feed and Thom Shanker's New York Times story are any indication, well, there's gonna be some freaking out inside the Beltway: 

A new intelligence assessment of global trends projects that China will outstrip the United States as the leading economic power before 2030, but that America will remain an indispensable world leader, bolstered in part by an era of energy independence....

“There will not be any hegemonic power,” the 166-page report states. “Power will shift to networks and coalitions in a multipolar world.”

It warns that at least 15 countries are “at high risk of state failure” by 2030, among them Afghanistan and Pakistan, but also Somalia, Burundi, Rwanda, Yemen and Uganda.

The study acknowledges that the future “is malleable,” and lists important “game-changers” that will most influence the global scene to 2030: a crisis-prone world economy, shortcomings in governance, conflicts within states and between them, the impact of new technologies and whether the United States can “work with new partners to reinvent the international system.”

The best-case situation for global security to 2030, according to the study, would be a growing political partnership between the United States and China. But it could take a crisis to bring Washington and Beijing together — something like a nuclear standoff between India and Pakistan resolved only by bold cooperation between the United States and China.

The worst-case situation envisions a stalling of economic globalization that would preclude any advancement of financial well-being around the world. That would be a likely outcome following an outbreak of a health pandemic that, even if short-lived, would result in closed borders and economic isolationism.

The chief author and manager of the project, Mathew Burrows, who is counselor for the National Intelligence Council, said the findings had been presented in advance in more than 20 nations to groups of academic experts, business leaders and government officials, including local intelligence officers.

As one of those academic experts, let me say three things.  First, the NIC puts a lot of effort into these reports, and they're important because they're consumed globally and not just nationally.  Not a lot of other countries have either official or unofficial institutions trying to do this kind of long-range analysis, so they devour the NIC reports just as much as Americans. 

Second, as Michael Horowitz and Philip Tetlock pointed out in Foreign Policy just a few short months ago, these NIC reports are hardly a perfect crystal ball: 

The reports almost inevitably fall into the trap of treating the conventional wisdom of the present as the blueprint for the future 15 to 20 years down the road. Many things the early reports get right, such as the continued integration of Western Europe, were already unfolding in 1997. Similarly, predicting that "some states will fail to meet the basic requirements that bind citizens to their government" or that information technology will have a large impact on politics was hardly going out on a limb.

Looking carefully at the first two Global Trends reports reveals how the reports have struggled to make accurate non-obvious predictions of big-picture trends....

The reports also engage in extensive hedging. For every prediction, there is a caveat. The reports lean heavily on words such as "could," "possibly," and "maybe." The lead-in to Global Trends 2025 uses "could" nine times in two pages, and the report as a whole uses the word a whopping 220 times. The report also uses "maybe" 36 times.  Global Trends 2020 uses "could" 110 times. Add all of the caveats and conditionals, and a harsh critic might conclude that these reports are saying no more than that there is a possibility that something could happen at some point -- and it might have a big effect.

Third, that prediction of the end to U.S. hegmony will be an interesting litmus test of the maturity of America's foreign policy community.  Sure, other institutions have made this kind of prediction about rising Chinese power, but it's different when a U.S. government body does it.  Despite the wide variance contained within these kind of predictions, it's gonna be easy for threat-mongers to screech at the headline statements. 

Furthermore, whenever the topic of waning American hegemony comes up in public discourse... well, the conversation doesn't go well.  Admitting a relative decline in American power is not something American's political and policy elites like to do -- see 2012 campaign, Mitt Romney. 

So pay close attention to who freaks out and who doesn't from the NIC report, and feel free to discount the future statements of those who choose to freak out today. 

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).

As I've said before, the dollar ain't going away anytime soon, and whatever leverage analysts believe China possesses with its dollar holdings is vastly overstated.   

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? 

It appears that I owe Mitt Romney a partial apology.  In yesterday's blog post I quoted from a video procured by Mother Jones' David Corn regarding Romney's perspective on the peace process between Israel and Palestine.  The tape suggested that Romney had zero hope for peace.  As Politico's Dylan Byers notes, however, the unedited version of the tape contained the following passage right after Romney had said that an ex-Secretary of State had told him that there was a prospect for a settlement between the Palestinians and the Israelis after the Palestinian elections.  After Romney said he didn't "delve" into it, he then added the following:   

But I always keep open: the idea of pushing on the Israelis to give something up to get the Palestinians to act is the worst idea in the world. We have done that time and time and time again. It does not work. So the only answer is show them strength. American strength, American resolve, and the Palestinians will some day reach the point where they want peace more than we’re trying to force peace on them. Then it’s worth having the discussion. So until then, it’s just wishful thinking (emphasis added).

OK, so it would appear that Romney does proffer a way of getting the two sides to talk.  My deepest apologies to Governor Romney for only printing the part of the statement that Mother Jones initially released. 

And yet... I have anothert question now.  I fear that Romney's "more resolve" strategy -- a theme he's echoed since making these comments in May -- raises more questions than answers. 

For exhibit A, let's go to the Financial Times' Najmeh Bozorgmehr, who interviewed Speaker of the Iranian Parliament (and possible future PM) Ali Larijani.   Here's what he had to say to Bozorgmehr about Mitt Romney: 

Military action against Iran would be “highly costly” for the US and threats issued by Mitt Romney as he tries to become the next American president are campaign rhetoric only and can be largely ignored, Ali Larijani, Speaker of the Iranian parliament, has told the FT.

Mr Romney has sought to portray himself as much tougher on Iran than President Barack Obama and more sympathetic to Israel’s concerns. But Mr Larijani is unimpressed, saying the Republican candidate has the “little bit of wisdom” needed to understand the consequences of waging war on the Islamic Republic.

So it would seem that Mr. Larijani doubts Romney's strength and resolve.  This is a problem. Romney's Theory of Statecraft seems to be that all U.S. problems in the world can be soled with Extra-Strength Resolve and Strength.  Now, even one accepts this premise, the failure of adversaries to believe Romney's promises means he's gonna have to display even more Extra-Strength Resolve and Strength to convince people that he is being strong... and resolute. 

The thing is, though, even Romney's allies doubt his strength and resolve... at least, they doubt his strength and resolve with respect to his China policy: 

Mitt Romney is hoping his tough talk on China policy will win him votes — but few of his big business donors or fellow Republicans support what he’s saying or believe he’d follow through if elected.

And if he did, many analysts say, he’d likely spark a disastrous and counter-productive trade war that would hurt both American consumers and the workers he says he’s trying to protect....

An actual Romney policy, many corporate executives believe, would have the same kind of focus on bringing cases before the World Trade Organization and negotiating behind closed doors — the same approach of Obama and George W. Bush.

“On his first day on the job, Romney is not going to put himself on the immediate defensive with the world’s second largest economy,” said one top financial industry executive who strongly supports Romney....

Romney hopes his tougher words will make Obama look weak. But the question remains whether Romney’s tough talk is just that: talk.

“It’s kind of a head scratcher,” said the senior financial services executive who supports Romney but questions his China policy. “Is this just rhetoric or is this really the view of the candidate?”

Now, to be fair, it's not just Romney supporters who don't believe Romney's resolve on China.  A Bloomberg Global Poll of  847 "decision makers in finance, markets and economics" showed that 82% of respondents were skeptical that Romney would designate China as a currency manipulator, for example. 

So we have a presidential candidate who thinks the way to get things done is to show resolve -- but neither his allies nor his adversaries believe Romney's own resolve.  Which leads to the following question:  is it possible that there is simply no amount of Extra-Strength Resolve and Strength that will allow Romney to bend the rest of the world to his will?  And if that's the case, what's his fallback option? 

I should be really pleased with Thomas Friedman's column today.  Entitled "In MItt's World," Friedman pens a substantive column criticizing Romney's foreign policy rhetoric to date and wishing that Romney displayed the same analytic acumen about foreign policy that he displayed as CEO of Bain Capital. 

So I should be happy, except that I passed out from banging my head against my desk after reading the first two paragraphs: 

Mitt Romney has been criticized for not discussing foreign policy. Give him a break. He probably figures he’s already said all that he needs to say during the primaries: He has a big stick, and he is going to use it on Day 1. Or as he put it: “If I’m president of the United States ... on Day 1, I will declare China a currency manipulator, allowing me to put tariffs on products where they are stealing American jobs unfairly.”

That is really cool. Smack China on Day 1. I just wonder what happens on Day 2 when China, the biggest foreign buyer of U.S. debt securities, announces that it will not participate in the next Treasury auction, sending our interest rates soaring. That will make Day 3 really, really cool. 

No.  No, no, no, no, no, and no. 

To elaborate a bit further:  

First, it wouldn't be enough for China to stop buying Treasuries -- as Joe Weisenthal showed with some fun charts a few weeks ago, China has pared back its Treasury purchases intermittently over the past few years -- with zero appreciable effect on U.S. interest rates. (see non-panda-hugger Paul Krugman on this point as well).  No, for China to have the effect that Friedman envisions, they would also have to actively dump most of their holdings of U.S. debt as well.

So what if they do?  Well, second, while Romney's stated China policies border on the destructive, the "labeling" move is bone-headed rather than truly calamitous. China wouldn't dump its debt unless things got really bad between the two countries.  Not even Stephen Roach thinks this would be the initial Chinese response -- and I think Roach is being way too gloomy about Sino-American relations under Romney. 

The reason China won't respond with the nuclear option of dumping all its U.S. debt holdings is that -- to repeat a theme -- this move would hurt China way more than it would hurt the United States.  The far more likely response by China would be to retaliate with trade measures.  This would not be good, as China is now the third largest export market for the United States.  Beijing can hurt a Romney administration by reducing its American imports far more adroitly than trying to trigger another financial crisis. 

Now, for the record, I don't think Romney should label China as a currency manipulator on day one, and I think Friedman makes some trenchant observations on Romney's consequences-free foreign policy statements later in his column.  But this Niall Ferguson-lite version of Sino-American relations is bad international relations theory and really bad economics -- and yet Very Serious People keep trotting it out.  

I really, really wish this would disappear from public discourse.  But it won't.  So, most likely, my desk is gonna get dented a few more times before Election Day. 

As China gears up for its 18th Party Congress and the trial of Bo Xilai's wife Gu Kailai on charges of murdering a British business partner, there have been accompanying press stories (even from the Chinese press) about the opaque nature of the Chinese regime. For example, consider this Edward Wong and Jonathan Ansfield New York Times front-pager about the relationship between China's civilian leadership and the People's Liberation Army: 

During a holiday banquet for China's military leadership early this year, a powerful general lashed out in a drunken rage against what he believed was a backhanded move to keep him from being promoted to the military’s top ruling body.

The general, Zhang Qinsheng, vented his fury in front of President Hu Jintao, according to four people with knowledge of the event. At the banquet, he even shoved a commanding general making toasts; Mr. Hu walked out in disgust.

The general’s tirade was one of a series of events this year that have fueled concerns among Communist Party leaders over the level of control they exercise over military officials, who are growing more outspoken and desire greater influence over policy and politics.

With China’s once-a-decade leadership transition only months away, the party is pushing back with a highly visible campaign against disloyalty and corruption, even requiring all officers to report financial assets.

“Party authorities have come to realize that the military is encroaching on political affairs,” said one political scientist with high-level party ties. “Although the party controls the gun, the expression of viewpoints from within the military on political issues has aroused a high level of alarm.” He, like others who agreed to discuss internal party affairs, spoke on the condition of anonymity because of fear of reprisals.

Now if you read the whole article, it's really not clear at all just how much of a problem this is.  We learn that Hu Jintao's relationship with the PLA is weak, even though he has engineered promotions of his favored generals (including, apparently, Zhang). We learn Ju's likely successor Xi Jinping allegedly has better ties to the military, but that Hu might keep control of the Central Military Commission for the next few years anyway. Oddly, we also learn that some PLA hardliners want to see China adopt a more liberal political model -- like Singapore. 

In other words, we know a bit more about the machinations than we do in, say, North Korea.  But we don't know much. 

Western readers are now likely clucking to themselves and thinking, "Man, am I glad that we don't have to live in a regime with that much political uncertainty and caprice." To those readers: Let's take a tour of Europe and the United States now, shall we? 

In Europe, there was a long WSJ front-pager about Italian prime minister Mario Monti and his efforts to push back against Angela Merkel's austerity policies.  The impresssion that was given in the beginning of the article is that Mnti was successful... and then we get to this: 

Mr. Monti didn't want Rome and Madrid to suffer the stigma of applying formally for aid or signing a list of policy demands written in Brussels, fearing this would undermine his public standing at home, as well that of his ally, Spain's premier Mariano Rajoy....

The evening before the [June EU Summit meeting], Mr. Monti hatched a plan to hijack the summit. Unless Ms. Merkel accepted his proposal on bond-market intervention by Europe's bailout fund, Mr. Monti would veto the growth pact -- stymieing Ms. Merkel in her parliament.

Italy had previously lobbied for the growth pact, so Mr. Monti's threatened veto -- announced just before Europe's leaders were due to sit down for dinner -- was a bombshell....

Mr. Monti's blockade lasted until 4 a.m., when leaders finally agreed to a text hashed out by their aides. It promised that Europe's bailout funds would be used "in a flexible and efficient matter" to stabilize the bond markets of vulnerable euro members.

It didn't go as far as Mr. Monti had originally wanted: Italy and Spain would still have to apply for any aid and sign a policy memorandum. But by planting the need to stabilize bond markets in the declaration, Italy had convinced Germany to recognize Italian reform efforts and pushed its approach for tackling the crisis into the spotlight.

An ebullient Mr. Monti spoke to reporters, claiming satisfaction for Italy and for Europe. A tired Ms. Merkel slunk off to her hotel.

German media and lawmakers were convinced their chancellor had buckled under Mr. Monti's pressure, granting Italy and Spain unconditional access to Germany's treasury. Her protestations later that morning that the fine print preserved the existing procedure for aid went largely unheard.

So did Monti get what he wanted? Beyond political optics, I don't think so, but the article makes it unclear. Actually, to be fair, the summit declaration itself makes it unclear as well, as the Financial Times' Peter Spiegel explains: 

Last week’s signal from Spain’s prime minister that he may be prepared to request assistance from the eurozone’s €440bn rescue fund to drive down his country’s borrowing costs has shifted the debate back to where it was more than a month ago: What strings will be attached to such aid?

Eurozone leaders had hoped to put the question to bed during an all-night summit in late June, where Mario Monti, Italy’s prime minister, thought he had won agreement that new aid from the bailout fund to buy a struggling country’s bonds would come with few additional conditions.

Indeed, Herman Van Rompuy, who chaired the summit as president of the European Council, publicly declared there would “not be any more countries” subject to full monitoring if they sought bond-buying assistance from the fund, the European Financial Stability Facility.

The only conditions, Mr Van Rompuy said, would be living up to existing commitments under EU budget rules.

Even before the summit wrapped up, however, that conclusion came into dispute. Indeed, the summit’s final communiqué appears to contradict itself.

At one point, it asserts bond buying programmes would be executed “in a flexible and efficient manner” -- code words for light conditions sought by Mr Monti and his Spanish counterpart, Mariano Rajoy. But in another section it says such aid would only be granted under “existing guidelines” -- code words for the more onerous conditions that existed before the summit (emphasis added).

So I'm gonna say that the EU is not winning a lot of points in the transparency department right now. 

Well, there's always the United States, right?  Right? Oh, wait, what's this New York Times front-pager from Monday saying? 

A rising number of manufacturers are canceling new investments and putting off new hires because they fear paralysis in Washington will force hundreds of billions in tax increases and budget cuts in January, undermining economic growth in the coming months.

Executives at companies making everything from electrical components and power systems to automotive parts say the fiscal stalemate is prompting them to pull back now, rather than wait for a possible resolution to the deadlock on Capitol Hill....

All told, the political gridlock in the United States, along with the continuing debt crisis in Europe, will shave about half a percentage point off growth in the second half of the year, estimates Vincent Reinhart, chief United States economist at Morgan Stanley.

More than 40 percent of companies surveyed by Morgan Stanley in July cited the fiscal cliff as a major reason for their spending restraint, Mr. Reinhart said. He expects that portion to rise when the poll is repeated this month.

“Economists generally overstate the effects of uncertainty on spending, but in this case it does seem to be significant,” he added. “It’s at the macro- and microeconomic levels.”....

In Washington, powerful business lobbies like the National Association of Manufacturers, the Business Roundtable, and more specialized groups like the National Electrical Manufacturers Association have grown more vocal about their frustration with the inaction of Congress, and the possible dangers ahead.

“It’s totally irresponsible and absolutely insane,” said Evan R. Gaddis, the president of the electrical manufacturers’ group. “The two parties are really dug in. Companies see the writing on the wall and business decisions are now being made on this.”

Sure, China is an opaque mess when it comes to governance. Sure, praising China's governance in an uncritical fashion should trigger critical blowback. Let's face it, however -- 2012 is not a year for democracies to be crowing about how their governing model is more transparent. 

Here's a more complete transcript of my interview with Peterson Institute for International Economics founder C. Fred Bergsten that Foreign Policy excerpted earlier in the week.  I edited and abridged the transcript to clean up some of grammar.  Have at it -- Bergsten's discussion of his role in the Trans-Pacific Partnership should make for interesting reading!! 

DANIEL W. DREZNER: I guess the first question I would ask is, what do you think the [Peterson Institute for International Economics'] greatest accomplishment has been?

C. FRED BERGSTEN: I think our greatest accomplishment has been to educate Americans on the benefits of globalization. And the first calculation that tried to quantify the effects, namely a trillion dollar a year -- higher -- national income, the potential for further gains of another half-trillion a year could go all the way to reducing barriers to global trade. Um, it's been a tough battle. It started in earnest I'd say in the NAFTA fight in Congress, and it continued during every one of the trade policies at the time. It's of course come up repeatedly in the capital flows context as well with all the monetary crises going back to the 80s with the debt crisis, and the 90s with Asia, Russia, Brazil, Mexico, etc. And now, with the crises of the high-income countries...but I think, putting it in the broadest terms, we have been the people trying to expand understanding of globalization -- its benefits and costs, which there certainly are -- but how [on] balance, it's a positive force, both for the U.S. economy and for U.S. foreign policy. In doing that, we have never tried to cover up or short-change the costs, particularly the adjustment the cost to workers and [immobile] factors of production, but it's mainly workers. We've quantified that, about 50 billion a year to offset against the one trillion a year of gains --20/1 cost ratio -- pretty overwhelming but that is significant cost. So that has to be dealt with, and the U.S. has not dealt with it very well. Trade adjustment is miniscule --  one billion a year. We need to invest more to deal with the downside; the cost of losing, in order to keep the benefits of globalization on a stable basis. And we've argued that throughout, and I think our balance carried the day. But the battle rages on, as you know, so much work yet to be done.

DWD: Of course, I know you're a Fletcher alum, and I'm speaking right now from the Fletcher school, so I have to ask this question: In what ways did your Fletcher experience prepare you for going to DC and then sort of creating the Institute for International Economics?

CFB: Well, it prepared me really well because I learned really most of my international economics there, from the top professors of the day, [like] Charles Kindleberger.

DWD: Kindleberger was there when you were? Oh, I didn't know that.  

CFB: Charlie taught a couple of courses -- a course on Europe, Europe Economy, an economics course on development with Humphry called the Don and Charlie show -- that was one of the highlight performances on the campus. But their teaching gave me most of my roots in international economics, and always -- obviously in a global context -- but also in a real world context; a political economy context that was, of course, really useful then for going into the policy world, which I did, most immediately into government, and then with that of most of my 20 years of career then to creating the institute.

DWD: Do you think America's foreign policy establishment has become more or less economically literate since when you first started IIE?

CFB: I don't think there's been much change. They were not very literate then, and they're not very literate now. My first big job -- I had a couple of lesser jobs -- my first big job was becoming economic deputy to Kissinger when he was National Security Advisor under Nixon.

Read on

Opening up my Gmail account yesterday, I saw the following announcement across the top encased in a pink banner: 

We believe state-sponsored attackers may be attempting to compromise your account or computer. Protect yourself now.

As FP's Josh Rogin and others have reported, this is part of Google's new policy of warning users specifically of "state-sponsored attackers."  It should be noted that Google's advice is essentially the same as it has always been -- follow good email hygeine and be careful about opening up attachments. 

So, this warning doesn't really change things on my end all that much.  I do wonder, however, if this will be yet another signifier that wonks inside and outside the Beltway will use to measure their "influence".  I can all to easily imagine the following exchange taking place this morning at a DC Caribou Coffee:

WONK 1:  So did you get the Gmail warning?  Isn't that pink header a little creepy?

WONK 2:  What pink header?  What are you talking about? 

WONK 1:  You know, the Gmail  notification  saying that you account might be the object of a state-sponsored attack.

WONK 2:  No, I didn't get that.

WONK 1:  Oh.

[Long, awkward pause]

WONK 1:  I'm sure it's just an oversight by the Chinese/Iranian/Russian/American authorities!

WONK 2:  I can't believe this.  My Klout score is higher than yours! 

WONK 1:  This just shows how inept the security apparatus is in Beijing/Tehran/Moscow/Washington.

WONK 2:  Just you wait.  After my Washington Post op-ed runs tomorrow, I'll be getting that pink banner! 

WONK 1 [pats WONK 2 on the back]:  Atta boy. 

Of course, us academics would never have this kind of conversation.  Now, if you'll excuse me, I need to polish my cv. 

Periodically, Reuters' Emily Flitter files a story on the Sino-American financial relationship that contains great reporting.  Unfortunately, analysts and pundits often take that reporting and misinterpret what it means.  The hardworking staff at this blog hereby dubs this phenomenon The Flitter Warning. 

Her latest story, which got the Drudge link and was widely linked to, reveals that China no longer has to go through Wall Street to buy U.S. Treasuries:

China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The relationship means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world....

China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary.

The documents viewed by Reuters show the U.S. Treasury Department has given the People's Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.

China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market.

The change was not announced publicly or in any message to primary dealers.

Now, this sounds like China is getting some kind of sweetheart deal, or at a minimum preferential treatment in its dealings with the U.S. Treasury, which ruffles the feathers of the easily ruffled.  The Blaze, for example, suggests:  "Considering the fact that China is America’s greatest creditor, as well as the fact that they are becoming increasingly antagonistic in cyber security attacks, maybe – just maybe – granting the Communist country a direct computer link to the treasury auction system isn’t the wisest decision."

A closer look at Flitter's story, however, reveals a more nuanced picture.  First, China isn't getting a direct discount by bypassing Wall Street.  As Flitter notes, "Primary dealers are not allowed to charge customers money to bid on their behalf at Treasury auctions, so China isn't saving money by cutting out commission fees."  On the other hand, China is likely saving some money by keeping Wall Street a little more in the dark about its buying intentions (and thereby preventing traders from driving up the price of securities China intends to purchase). 

Second, and this is really important -- Flitter fails to explain an important strategic reason why the United States might agree to this arrangement.  She proffers two possibilities.  First, that because this financial relationship is so politically sensitive, both sides have an incentive to keep the depths of it under wraps.  Second, U.S. Treasury officials want to make the Chinese purchasers of U.S. debt happy. 

I'd suggest a third -- through this arrangement, U.S. officials now have better data on just how much debt China is purchasing.  For years, Beijing has tried to conceal the extent of its U.S. debt purchases by going through intermediaries in London and elsewhere (see this Setser and Pandey paper for more on the details).  Flitter notes in her story that "in 2009, when Treasury officials found China was using special deals with primary dealers to conceal its U.S. debt purchases, the Treasury changed a rule to outlaw those deals."

This arrangement seems like a win-win deal to me.  China, by bypassing Wall Street, saves a bit on its debt purchases by not moving the market so much.  The United States, by dealing with Beijing directly, gets more accurate information on just how much U.S. debt China is purchasing.  Flitter's reportage, in other words, simply confirms the existence of mutual interdependence between China and the United States, not asymmetric dependence.  Which sounds... awfully familiar. 

So, let the Flitter Warning go forth -- interesting new facts, but not much to worry about here. 

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...