Your humble blogger has been silent on the ongoing Chen Guangcheng case in China.  To be fair, however, I was merely copying what the Chinese and U.S. governments were doing:  furiously not commenting on the case as the next Strategic and Economic Dialogue between Washington and Beijing commences. 

Since other people are starting to say really stupid things comment on it, however, I'm required by the International Brotherhood of Foreign Policy Pundits to weigh on the matter.  So, a few random thoughts:

1)  My expectation on how this will play out:  unless Wen Jiabao has a lot more authority than I think, this ends in a year or so when Chen leaves China.  Chen wants to stay in China.  Given that he was under some kind of extralegal confinement rather than house arrest, one could envision Wen using this as a way of expanding on the "crush Bo" campaign currently emanating from Beijing.  In other words, Wen could use this to clamp down on abuses by out-of-control regional governors.  But, to be honest, I doubt Wen has that much authority -- in which case this ends with Chen out of China in a way that embarrasses Beijing the least. 

2)  The fact that both Beijing and Washington have kept their mouths shut on Chen is a pretty surprising but positive sign about the overall stability/resilience of Sino-American relations.  Bear in mind that according to the latest reports, much of the leadership in Beijing takes an increasingly conspiratorial view of the United States.  As for the mood in Washington, well, let's just call it unfriendly towards China.  Both sides are in the middle of big leadership decisions, making the incentive to cater to nationalist domestic interests even stronger than normal.  With the rest of the Pacific Rim trying to latch themselves onto the U.S. security umbrella, this could have been the perfect match to set off a G-2 powderkeg. 

Despite all of these incentives for escalating the dispute, however, it hasn't happened.  Kurt Campbell was dispatched to Beijing, talks are ongoing, and neither side appears to be interested in ramping up domestic audience costs.  That escalation hasn't happened despite massive political incentives on both sides to let it happen suggests that, contrary to press fears about Chen blowing up the bilateral relationship, there are powerful pressures in Washington and Beijing to find a solution that saves as much face as humanly possible for both sides. 

3)  Mitt Romney has been vocal about Chen's case, concluding:  "Any serious U.S. policy toward China must confront the facts of the Chinese government’s denial of political liberties, its one-child policy, and other violations of human rights." 

To which I say... good for him!!  It's the job of the opposition party in the United States to bring up questions about China's human rights problem.  It's the job of the opposition party because the moment the opposition takes power, all those structural pressures I alluded to previously kick in, and the human rights rhetoric from the campaign trail inevitably fades away.  So Republicans who expect a President Romney to be all over the human rights issue will be sorely disappointed.  That said, even someone like myself who is more realpolitik-friendly nevertheless would be sorely disappointed if human rights faded away completely (it's also worth noting that after the Obama administration's first year in office, they seemed to find their rhythm with respect to talking about human rights towards China). 

Am I missing anything? 

When we last left off with Bo Xilai, he and his family were in a spot of trouble for myriad crimes and misdemeanors in Chongqing, including the possible poisoning of a British national.  According to this New York Times story by Jonathan Ansfield and Ian Johnson, however, that's just the beginning of Bo's crimes:

When Hu Jintao, China’s top leader, picked up the telephone last August to talk to a senior anticorruption official visiting Chongqing, special devices detected that he was being wiretapped — by local officials in that southwestern metropolis.

The discovery of that and other wiretapping led to an official investigation that helped topple Chongqing’s charismatic leader, Bo Xilai, in a political cataclysm that has yet to reach a conclusion.

Until now, the downfall of Mr. Bo has been cast largely as a tale of a populist who pursued his own agenda too aggressively for some top leaders in Beijing and was brought down by accusations that his wife had arranged the murder of Neil Heywood, a British consultant, after a business dispute. But the hidden wiretapping, previously alluded to only in internal Communist Party accounts of the scandal, appears to have provided another compelling reason for party leaders to turn on Mr. Bo.

This is both interesting and unsurprising.  The leadership in Beijing has every incentive to tar and feather Bo to ensure that his residual popularity in Chongqing does not lead to a revival in his power.  It's now gotten to the point where Bo's son had to issue a statement to the Harvard Crimson in an attempt to shed the image of being a spoiled princeling driving around in a red Ferrari.   I don't doubt the wiretapping story, but let's face it, Beijing's ruling cliques are going to have an incentive to... let's say embellish Bo's perfidy.  

And we here at Foreign Policy want to help!! 

At this point, the accusations being hurled at Bo Xilai, his wife, and his son are flying so fast and furious that the hashtag #BoXilaicrimes is now rising on Twitter.  Look at the list yourself -- here are my faves so far: 

RT @parrav: Guess who's the final cylon?#BoXilaiCrimes

RT @blakehounshell: Shot the deputy #BoXilaicrimes

RT @kensofer: Created Jar Jar Binks. #BoXilaicrimes

RT @_dpress  Tore Jeremy Lin's meniscus #BoXilaicrimes

RT @HayesBrown: Cancelled Firefly.#BoXilaiCrimes

RT @NeilBhatiya: Designed the new Gmail #BoXilaicrimes

 

RT @Seagalla designed the high-speed rail signaling system. #BoXilaiCrimes

 

And, my own contribution: 

RT @dandrezner: Made sure the cast of "Girls" consisted only of princelings. #BoXilaicrimes

 

So... the hard-working staff here at Foreign Policy encourage you to contribute to the #BoXilaicrimes meme.  Think of the most annoying things you have  had to process recently -- and then blame them on Bo!  It's easy and fun.

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? 

I've been reading a raft of books recently arguing that authoritarian capitalism is a more sustainable model than us in the West appreciate.  According to this meme, entities like sovereign wealth funds, state-owned enterprises, and national oil companies will be carving up ever-greater slices of the global economy. 

Whenever I read these arguments, the question that gnaws at me is how these authoritarian capitalist institutions will operate in other authoritarian capitalist countries.  See, this kind of argument presumes a harmony of interests that doesn't necessarily exist between authoritarian states.  It also presumes a standard of competency and efficiency - or, at least, efficient corruption -- that makes these firms and institutions able to compete with private sector firms. 

For see what I'm talking about, see this Washington Times story by Kelly Hearn on China's growing frustration with Venezuela:

China has poured billions of dollars into Venezuela’s oil sector to expand its claim over the country’s massive oil reserves.

But Beijing is getting relatively little for its investments, and Chinese officials are increasingly frustrated with Venezuelan President Hugo Chavez, according to energy analysts and former managers of the state oil company, Petroleum of Venezuela, or PDVSA as it’s known by its Spanish acronym....

In 2010, CNPC signed a deal to help Venezuela develop a major Orinoco oil field known as Junin 4, which includes the construction of a facility to convert heavy oil to a lighter crude that could be shipped to a refinery in Guangdong, China.

“Although the contract was signed in December 2010, not one barrel of oil has yet been produced, much less upgraded,” said Gustavo Coronel, a former PDVSA board member.

“So far, nothing much seems to be happening, except for the arrival of a large group of Chinese staff to the CNPC’s Caracas office,” he added, referring to the Venezuelan capital, Caracas.

“Apart from money, there seems to be little that China can offer Venezuela in the oil industry,” he said, adding that a “culture gap will make working with China very difficult for Venezuelan oil people, who were mostly trained in the U.S.”....

The Chinese also seem to be increasingly wary.

Internal PDVSA documents released by a Venezuelan congressman show that the Chinese balked at a $110 billion loan request by Mr. Chavez in 2010, after PDVSA officials failed to account fully for where the money would go.

Venezuela is not the only place that Chinese foreign direct investment in energy is running into bottlenecks and roadblocks.   There was Myanmar last year:

fter five years of cozy cooperation with Burma’s ruling generals, China Power Investment Corp. got a shock in September when it sent a senior executive to Naypyidaw, this destitute Southeast Asian nation’s showcase capital, a Pharaonic sprawl of empty eight-lane highways and cavernous government buildings.

Armed with a slick PowerPoint presentation and promises of $20 billion in investment, Li Guanghua pitched “an excellent opportunity,” a mammoth, Chinese-funded hydropower project in Burma’s far north.

Then came the questions: What about the risk of earthquakes, ecological damage and all the people whose homes would be flooded? Is it true that most of the electricity would go to China?

Two weeks later, Burma, also known as Myanmar, scrapped the cornerstone of the project. President Thein Sein, a former general who took office in March, announced that he had to “respect the people’s will” and halt the $3.6 billion dam project at Myitsone, the biggest of seven planned by China Power Investment, or CPI.

As the world’s biggest consumer of energy, China has hunted far and wide in recent years for sources of power — and of profit — for state-owned corporate behemoths such as CPI. The result is a web of deals with often-repressive regimes, from oil-rich African autocracies such as Sudan and Angola to river-rich Burma.

But coziness with despots can also backfire.

Amid a dramatic, though still fitful, opening in Burma after decades of harsh repression, public anger has swamped China’s hydropower plan. The deluge threatens not only hundreds of millions of dollars already spent but also China’s intimate ties to what had been a reliably authoritarian partner, its only East Asian ally other than North Korea.

Beijing still has big interests in Burma, including a multibillion-dollar oil and natural gas pipeline that is under construction. But a partnership forged with scant heed to public opinion has been badly jolted by a barrage of no-longer-taboo questions.

These are just isolated cases -- I have no doubt that China has a boatload of successful FDI projects in energy.  What's telling, however, is that regardless of whether the host regime is democratizing or reverting to autocracy, the political economy of these investments is far from problem-free. 

One must sympathize with the Chinese firms here.  China's domestic politicsal economy of investment aren't this messy.  Oh, wait...

Mitt Romney's op-ed in today's Wall Street Journal is devoted to China policy.  Let's take a read, shall we? 

Barack Obama is moving in precisely the wrong direction [on responding to China's rise]. The shining accomplishment of the meetings in Washington this week with Xi Jinping—China's vice president and likely future leader—was empty pomp and ceremony.

President Obama came into office as a near supplicant to Beijing, almost begging it to continue buying American debt so as to finance his profligate spending here at home. His administration demurred from raising issues of human rights for fear it would compromise agreement on the global economic crisis or even "the global climate-change crisis." Such weakness has only encouraged Chinese assertiveness and made our allies question our staying power in East Asia.

Now, three years into his term, the president has belatedly responded with a much-ballyhooed "pivot" to Asia, a phrase that may prove to be as gimmicky and vacuous as his "reset" with Russia. The supposed pivot has been oversold and carries with it an unintended consequence: It has left our allies with the worrying impression that we left the region and might do so again.

The pivot is also vastly under-resourced. Despite his big talk about bolstering our military position in Asia, President Obama's actions will inevitably weaken it. He plans to cut back on naval shipbuilding, shrink our Air Force, and slash our ground forces. Because of his policies and failed leadership, our military is facing nearly $1 trillion in cuts over the next decade.

This is interesting because it's the first time I've seen a GOP candidate try to respond substantively to the "pivot".  And, in my book, the criticism that Obama was too much of a supplicant to China in the first part of his term is actually a fair one.  Unfortunately, things fall apart after that. 

First, Asian allies were worried about the U.S. presence in the region because of the priority the Bush administration placed on the global war on terror, followed by the 2008 financial crisis.  Obama had little or nothing to do with it.

Second, it's important and revealing that Romney only talked about the narrow, military part of the pivot.  Left unmentioned were the diplomatic components (joining the East Asia Summit, interceding on the South China Sea, warming relations with Myanmar, tripartite between the U.S., Australia and India) as well as the economic components (ratifying the FTA with South Korea, signing the framework agreement for the Trans-Pacific Partnership).  This is important, because any U.S. strategy in the Asia-Pacific region has to be a full-spectrum approach, while Romney seems peculiarly obsessed with shipbuilding. 

Third, the primary message Obama has been sending to Xi has been saying that China "don't play by the rules."  Which, coincidentally enough, is exactly the same thing Romney says in the op-ed. 

In the economic arena, we must directly counter abusive Chinese practices in the areas of trade, intellectual property, and currency valuation. While I am prepared to work with Chinese leaders to ensure that our countries both benefit from trade, I will not continue an economic relationship that rewards China's cheating and penalizes American companies and workers.

Unless China changes its ways, on day one of my presidency I will designate it a currency manipulator and take appropriate counteraction. A trade war with China is the last thing I want, but I cannot tolerate our current trade surrender.  (emphasis added)

The bolded section represents the only portion of the op-ed in which Romney even hints that he might cooperate with China.  The rest of it is pretty silly.  It's ludicrous for Romney to claim he doesn't want a trade war in the same breath that he promises "day one" action against China.  No wonder conservatives are labeling Romney's China policy as "blaringly anti-trade." 

To be blunt, this China policy reads like it was composed by the Hulk.  Maybe this will work in the GOP primary, but Romney and his China advisors should know better. 

Let's consider and contrast American foreign policy towards Russia and China over the past few years.

With Russia, the Obama administration announced a much-ballyhooed "reset" with the goal of improving bilateral relations.  In an effort to advance that goal, the administration reworked missile defense system plans in eastern Europe, creating political headaches for governments in the region to make Moscow happy.  The administration took great pains to endorse a Russian proposal on Iran's nuclear program.  The administration signed a fresh new arms control treaty and then expended a decent amount of political capital to get NewSTART ratified.  Washington conducted some serious behind-the-scenes diplomacy to get Russia into into the WTO.  Most recently, the administration appointed a chief architect of the "reset" policy as ambassador to Russia.   

With China, the Obama administration (after some idle G-2 talk) has been far more aggressive.  The administration has "pivoted" it's foreign policy resources toward the Pacific Rim, with the not-so-subtle signal that China is the focus of this pivot.  Washington has poked its nose into the South China Sea dispute, and recently announced a decision to station troops in Australia.  It pushed forward a framework trade agreement that pointedly does not include China, while simultaneously calling on that country to let its currency appreciate.  The State Department has reached out to one of China's longstanding allies in an effort to coax the nascent democratization in that country into something more long-lasting.  This is simply part of a larger theme in which Washington is seemingly bear-hugging any significant country that is concerned about Beijing.  The U.S. ambassador to China, when not becoming an online sensation among ordinary Chinese, is busy criticizing Beijing's human rights record. 

So, to sum up:  the Obama administration has made it something of a priority to improve relations with Russia, while at the same time investing serious amounts of diplomatic capital into various frameworks and initiatives that hedge against a rising China. 

Now compare and contrast how Moscow and Beijing are thinking about Washington this week.  In Beijing: 

China and the United States should cooperate more closely to defuse international crises and ensure friction does not overwhelm shared interests, China's likely next president, Xi Jinping, said on Monday, setting an upbeat tone for his impending visit to Washington.

"No matter what changes affect the international situation, our commitment to developing the Sino-U.S. cooperative partnership should never waver in the face of passing developments," Vice President Xi told a meeting in Beijing.

"In dealing with major and sensitive issues that concern each side's core interests, we must certainly abide by a spirit of mutual respect and handle them prudently, and by no means can we let relations again suffer major interference and ructions."

Xi's mood-setting speech did not unveil new policies or give the precise date for his U.S. visit. But he stressed Beijing's desire for steady relations for his visit and his accession to running the world's second biggest economy after America's.

And now Moscow:

Russia's foreign minister, Sergey V. Lavrov, warned Wednesday that outside encouragement of antigovernment uprisings in the Middle East and North Africa could lead to “a very big war that will cause suffering not only to countries in the region, but also to states far beyond its boundaries.”

Mr. Lavrov’s annual news conference was largely devoted to a critique of Western policies in Iran and Syria, which he said could lead to a spiral of violence.

His remarks came on the heels of a report on state-controlled television that accused the American ambassador to Russia, Michael McFaul, who has been in Moscow for less than a week, of working to provoke a revolution here. Prime Minister Vladimir V. Putin, at an impromptu meeting with prominent editors, also unleashed an attack on the liberal radio station Ekho Moskvy, which he said was serving American interests.

Now, it's possible to find other news stories that suggest China might not be handling all aspects of the bilateral relationship with equal aplomb, and its possible that these Russian statements contain more bluster than bite.  Still, stepping back, the larger narrative does seem to be that Russia has adopted an angrier and more belligerent posture toward American foreign policy in recent months, while China has responded with more aplomb. 

Why?  I don't know if there's an easy and accurate explanation.  Some neoconservatives might proffer that authoritarians only respond positively to strength, and therefore Russia feels more emboldened than China.  I seriously doubt that this is about bandwagoning.  Similarly, it could be argued that Russia is more domestically insecure than China, what with the recent protests and all.  Again, I seriously doubt this, as it's not like China hasn't experienced some domestic hiccups as well this year.

There are two more compelling explanations, but I honestly don't know if they work either.  The first is that Russia and China have different diplomatic styles.  Russian diplomats are far more comfortable with being blunt in their assessments of American intentions and actions, whereas Chinese diplomats are more comfortable laying low and not making as much of a public fuss.  Furthermore, China has moved down the learning curve, recognizing that its 2009-10 policy of "pissing off as many countries as possible" didn't turn out so well.  It's possible that the substance of both countries' approaches toward the United States are not that different -- they just go about it in ways that play very differently in the media. 

The second, more realpolitik explanation is that China and Russia are looking into the future, and Beijing is far more sanguine than Moscow.  Russia is suffering from institutional dysfunction and demographic decay.  It's only great power assets are bountiful natural resources, a huge land mass, and nuclear weapons.  China will encounter difficulties in the future, but does not have nearly the same kind of structural stresses as Russia.  Beijing is therefore simply less anxious than Moscow about U.S. policy, because it has more hard and soft power resources. 

To be honest, I'm not thrilled with either of these explanations. So, dear readers, I put it to you: why is Russia acting more bellicose toward an accommodating policy from the United States, whereas China is reacting calmly toward a more aggressive United States? 

Developing ...

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? 

As I noted previously, compared to his GOP rivals, Mitt Romney has some actual foreign policy thinking going on.  On the other hand, as Dan Trombly points out, doing better than Herman Cain or Rick Perry is a really low bar.  So, looked at objectively, what's my assessment of Romney's foreign policy white paper? 

I could go through it line by line, but James Joyner already did that for The Atlantic.  As it turns out, I'm reaching a course called The Art and Science of Statecraft that will require students to write a grand strategy document.  Sooo.... if Mitt Romney was one of my students, how would I grade him?  See below:

********************************************************************************** 

Mitt,

You and your study team have clearly put a lot of work into "An American Century."  It's cogently written and organized.  Your basic statement of purpose -- "advance an international system that is congenial to the institutions of open markets, representative government, and respect for human rights (p. 7)" -- fits perfectly within the mainstream of American foreign policy thinking. You've done an excellent job of demonstrating an awareness of the complexity of threats that face the United States in the 21st century.  I liked it on p. 6 when you noted that:

In the highly dynamic realm of national security and foreign policy there are seldom easy answers. Discrete circumstances in disparate regions of the world demand different kinds of approaches. There is no silver bullet for the problem of securing the United States and protecting our interests around the world.

You've also demonstrated an appropriate awareness that American power rests on more than a strong military.  When you note that a Romney administration would "apply the full spectrum of hard and soft power to influence events before they erupt into conflict (p. 8)," I caught myself nodding along.  

Some of the details are intriguing as well.  I need to look more into these "Reagan economic zones" that you mention a lot, but applying them to Latin America and the Pacific Rim make a great deal of strategic and economic sense.  I'm not fully persuaded that your notion of creating regional envoys to organize all "soft power resources" is all that different from the foreign policy czars or special envoys of administrations past, but this kind of argument fits well with your management background. 

That said, there are some logical flaws and major gaps in this draft that will have to be corrected if you want to earn a better grade.  The first problem is the style.  I recognize that you've written this as a campaign document, so you're never going to completely eliminate the unadulterated horsheshit allegations about the current president going on an apology tour.  Maybe you could do it a bit more subtly in the future, however? 

Secondly, there's a lack of historical awareness in some parts of the document.  For example, on page 7 the paper says:

[A] Romney foreign policy will proceed with clarity and resolve. The United States will  clearly enunciate its interests and values. Our friends and allies will not have doubts about where we  stand and what we will do to safeguard our interests and theirs; neither will our rivals, competitors, and adversaries.

Now, reading this, I kept thinking back to the Bush administration and its repeated assetions that that there would be no hypocrisy in foreign affairs.  Much like Bush, reality turned out to be trickier.  I suspect you know this, from the other excerpts noted earlier.  So get rid of this fluff:  I'm sure statements like this play well in a management consulting boardroom, but it's not going to cut it in the real world. 

Similarly, for someone who says that, the Obama administration is "undermining one’s allies (p. 3)" in contrast to you, who will "reassure our allies (p. 13)", you don't actually talk about America's treaty allies much at all.  True, you do talk about expanding America's alliance system to include India and Indonesia.  Mexico gets some face time.  Israel gets a lot of face time.  On the other hand, NATO is not mentioned once in this entire document.  Neither is the European Union.  Japan and South Korea get perfunctory treamtment at best.  Turkey is a major treaty ally but you treat it like a pariah state.  For someone who's claiming that the U.S. will reassure its major allies, you didn't seem to give them much attention at all.  This is a really important problem, because Japan and Europe have been crucial allies in a lot of major American initiatives -- and they're getting weaker.  Even in discussing new possible allies, I'm kind of gobsmacked that Brazil is never mentioned. 

Another big problem is that your approach to China is so shot full of contradictions that I don't know where to begin.  Do you seriously believe what you wrote on p. 3: 

The easiest way... to become embroiled in a clash with China over Taiwan, or because of China’s ambitions in the South or East China Seas, will be to leave Beijing in doubt about the depth of our commitment to longstanding allies in the region.

Really?  See, I'd say the easiest way to get embroiled in a clash with China is to write Taiwan a blank check on their defense needs.  The second easiest would be to publicly bluster on about Taiwan to a Chinese leadership that feels increasingly insecure and will be tempted to stoke the fires of Chinese nationalism by creating another Quemoy and Matsu crisis. 

Furthermore, you talk explicitly about supplying Taiwan with "adequate aircraft and other military platforms (p. 18)" in supposed contrast to the Obama administration.  You also talk about strengthening relationships with other countries that neighbor China in an effort to preserve American dominance.  Now, this might be a bit provocative, but I get the rationale.  Here's the thing, though -- you can't simultaneously do this and assert that you will "work to persuade China to commit to North Korea’s disarmament (p. 29)."  Really?  How exactly are you gonna persuade them on this point?   Do you really think that arming Taiwan to the teeth and blasting its human rights record will do the trick? 

If the section on China is contradictory, then your discussion of Pakistan is worse.  You state on p. 31-32:

It is in the interests of all three nations to see that Afghanistan and the Afghanistan/ Pakistan border region are rid of the Taliban and other insurgent groups.... Pakistan should understand that any connection between insurgent forces and Pakistan’s security and intelligence forces must be severed. The United States enjoys significant leverage over both of these nations. We should not be shy about using it. 

There are at least two assertions in the quoted section that are highly dubious -- I'll let you find them on your own.   

One final point, should you choose to revise this draft strategy -- you need to prioritize the threats you discuss in the paper.  You list a whole bunch of them -- rising authoritarian states, transnational violence, failing states, and rogue states.  If you have to prioritize, which threats merit greater attention?  This should actually be pretty easy, since you absurdly overhype the threats posed by some of these countries (Venezuela, Cuba and Russia in particular). 

I look forward to reviewing your later work. 

Grade:  B

... you have to write a very quick blog post saying "I have arrived safely in Shanghai" because that's the best way to inform friends and family of that fact, because I can't access Facebook, Twitter, and Google+ (intriguingly, LinkedIn is no problem), and Gmail is loading so slowly that I'd expect the Israel-Palestinian peace process to move faster.

That is all.

Your humble blogger is near the capital of Waterworld Pennsylvania at the moment and all conferenced out. Regular blogging will resume after some sleep.

In the meanwhile, however, please check out FP's latest Deep Dive on the future of currencies. I have a contribution on the dollar's future as the world's reserve currency. It's depressing to note that the thing I like best about it is it's title -- which, of course, someone else at FP created.

Enjoy!

[WARNING:  THE FOLLOWING IS AN OPTIMISTIC GLOBAL POLITICAL ECONOMY POST]

Note:  in my last blog post, I might have sounded juuuuust a wee bit pessimistic about the state of the global political economy.  That was my intent, but it wasn't necessarily how I actually felt.  My aim was to assemble as negative a brief as possible about the state of the global political economy.  The aim of this post is to argue that, despite all the recent bad news, the fundamentals of the global political economy are surprisingly sound.  I'm not actually as optimistic as the rest of this post suggests, either -- but I do lean more in this direction.  The fact that I'm blogging this from a zombie-proof vacation redoubt should in no way affect your evaluation of the following few paragraphs.  

So, when we last left off this debate, things were looking grim.  My concern in the last post was that the persistence of hard times would cause governments to take actions that would lead to a collapse of the open global economy, a spike in general riots and disturbances, and eerie echoes of the Great Depression.  Let's assume that the global economy persists in sputtering for a while, because that's what happens after major financial shocks.    Why won't these other bad things happen?  Why isn't it 1931? 

Let's start with the obvious -- it's not gonna be 1931 because there's some passing familiarity with how 1931 played out.  The Chairman of the Federal Reserve has devoted much of his academic career to studying the Great Depression.  I'm gonna go out on a limb therefore and assert that if the world plunges into a another severe downturn, it's not gonna be because central bank heads replay the same set of mistakes. 

The legacy of the Great Depression has also affected public attitudes and institutions that provide much stronger cement for the current system.  In terms of publuc attitudes, compare the results of this mid-2007 poll with this mid-2010 poll about which economic system is best.  I'll just reproduce the key charts below: 

The headline of the 2010 results is that there's eroding U.S. support for the global economy,  but a few other things stand out.  U.S. support has declined, but it's declined from a very high level.  In contrast, support for free markets has increased in other major powers, such as Germany and China.  On the whole, despite the worst global economic crisis since the Great Depression, public attitudes have not changed all that much.  While there might be populist demands to "do something," that something is not a return to autarky or anything so drastc. 

Another big difference is that multilateral economic institutions are much more robust now than they were in 1931.  On trade matters, even if the Doha round is dead, the rest of the World Trade Organization's corpus of trade-liberalizing measures are still working quite well.  Even beyond the WTO, the complaint about trade is not the deficit of free-trade agreements but the surfeit of them.  The IMF's resources have been strengthened as a result of the 2008 financial crisis.  The Basle Committee on Banking Supervision has already promulgated a plan to strengthen capital requirements for banks.  True, it's a slow, weak-assed plan, but it would be an improvement over the status quo. 

As for the G-20, I've been pretty skeptical about that group's abilities to collectively address serious macroeconomic problems.  That is setting the bar rather high, however.  One could argue that the G-20's most useful function is reassurance.  Even if there are disagreements, communication can prevent them from growing into anything worse. 

Finally, a note about the possibility of riots and other general social unrest.  The working paper cited in my previous post noted the links between austerity measures and increases in disturbances.  However, that paper contains the following important paragraph on page 19: 

[I]n countries with better institutions, the responsiveness of unrest to budget cuts is generally lower. Where constraints on the executive are minimal, the coefficient on expenditure changes is strongly negative -- more spending buys a lot of social peace. In countries with Polity-2 scores above zero, the coefficient is about half in size, and less significant. As we limit the sample to ever more democratic countries, the size of the coefficient declines. For full democracies with a complete range of civil rights, the coefficient is still negative, but no longer significant.

This is good news!!  The world has a hell of a lot more democratic governments now than it did in 1931.  What happened in London, in other words, might prove to be the exception more than the rule. 

So yes, the recent economic news might seem grim.  Unless political institutions and public attitudes buckle, however, we're unlikely to repeat the mistakes of the 1930's.  And, based on the data we've got, that's not going to happen. 

After last night's stunningly useless set of speeches, I'd put the odds of the U.S. not raising the debt ceiling by August 2nd at 1 in 2. Like many other observers, I'm finding it increasingly difficult to envision a deal that would get through the Senate while attracting a majority of House Republicans [You meant a majority of the House of Representatives, right?--ed. No, I meant a majority of House Republicans. I'm pretty sure that Boehner and the rest of the House GOP leadership will refuse to pass any debt ceiling plan that relies too much on House Democrats.]

So, it's gonna be a fun few weeks for those of us who study the global political economy. Let's start by thinking the unthinkable -- what will happen if there is a default?

I've expressed my feelings on the matter already, and I'm hardly the only one. That said, I've also hedged my bets been flummoxed by the lack of market reaction to the DC stalemate. The lack of market reaction to date has emboldened House GOP members to stand fast. Could they be right?

Tom Oatley, who pooh-poohed my fears of the debtpocalypse last week, makes an interesting point about the composition of U.S. debt-holders:

By these figures, about 63% of US government debt is owned by central banks (foreign and domestic) and/sovereign wealth funds. Most of these entities are American friends and allies. Another 4% is owned by US state and local governments. That leaves 33%--about $4.8 trillion--in private hands. Of this, the financial institutions with the most restrictive regulations regarding asset ownership (depository institutions) own only 2% of the total ($290 billion). Mutual Funds, who may or may not have to dump downgraded debt, hold another 9% ($1.35 trillion).

What's the point? The discussion about the impact of US default revolves around the market response to default. Useful to recognize that most of the US government debt is held by public-sector agents who are much less sensitive to balance sheet pressures and regulatory constraints. These public sector agents are also substantially more sensitive to "moral suasion" and direct appeal than private financial institutions. The structure of ownership of US debt might dampen the negative impact of any default that does occur.

This is pretty interesting. Oatley focuses on "moral suasion," but there's also a national-interest motive for many U.S. debtholders. Most of the official holders of U.S. debt have a strong incentive for a) the value of their holdings not to plummet; and b) the United States economy to continue to snap up other their exports. If China, for example, is buying up U.S. debt to sustain its own growth, then neither a technical default nor a ratings downgrade should deter China or other export engines from continuing to buy U.S. debt even if there's a spot of trouble.

So it appears that complex interdependence will force America's rivals to continue to hold U.S. debt even after the debtpocalypse!! The United States in the clear, right?

Not so fast. Here are five "known unknowns" I can think of that might complicate Oatley's analysis:

1) What if the creditors form a cartel? In my 2009 paper, this was the one scenario that gave me the heebie-jeebies, because it's the one scenario under which creditors can wring geopolitical gains from debtor states. Any kind of default can act as a focal point moment in which U.S. creditors decide it's time to apply a haircut to American power and influence.

I don't think this is going to happen, because the national interests of American debtholders remain divergent. That said, if U.S. allies interpret default as a signal of U.S. unreliability in times of crisis, then all bets are off.

2) What about the economic nationalism of China? China is the largest foreign debtholder, which gives it a certain agenda-setting power in moments of crisis. There are a lot of compelling reasons why China would decide to try to minimize the economic disruptions . On the other hand, there's a lot of resentment on Chinese Internet boards already about the Chinese purchases of U.S. debt. During a period in which the CCP is already concerned about domestic instability, one could envision a scenario whereby they try to mollify nationalists at home by acting out against the United States.

3) What would be the effect of a mild market reaction on the House of Representatives? The less the markets react, the less that the House GOP will feel a need to do anything. There will come a point, therefore, when official debtholders might need to signal to the House that, in IPE lingo, "s**t needs to get done." That signal would in and of itself roil markets, not to mention the effects the current uncertainty is already having on the real economy.

4) What is the fiscal shock from a default? There are two causal mechanisms through which a default could affect the global economy. The first is through panic and uncertainty roiling financial markets. The second, however, is from a dramatic fiscal contraction due to limited government spending. Given the lackluster state of the current recovery, it wouldn't take much to tip the United States back into recession.

5) What if there's another AAA bubble? FT Alphaville's Tracy Alloway provided another interesting chart earlier this month on the distribution of AAA securities:

As Alloway warns:

[W]atch what starts happening from 2008 and 2009.

The AAA bubble re-inflates and suddenly sovereign debt becomes the major force driving the world’s triple-A supply. The turmoil of 2008 shunted some investors from ABS into safer sovereign debt, it’s true. But you also had a plethora of incoming bank regulation to purposefully herd investors towards holding more government bonds, plus a glut of central bank liquidity facilities accepting government IOUs as collateral. Where ABS dissipated, sovereign debt stood in to fill the gap. And more.

It’s one reason why the sovereign crisis is well and truly painful.

It’s a global repricing of risk, again, but one that has the potential for a much largerpop, so to speak.

We know that a downgrade of U.S. Treasuries would likely lead to a downgrade of state and municipal bond ratings as well. We also know that the ripple effects from the collapse of asset-backed securities were much larger than anticipated before the 2008 crisis. This is why the possible knock-on effects of downgrade so many AAA asserts makes me itchy. Even if banks and other financial institutions have minimal exposure to U.S. Treasuries, I don't think it's possible for them to have minimal exposure to all U.S.-based AAA sovereign debt.

These are just the five known unknowns that I could think of in the past hour -- there are probably many, many more. Readers are strongly encouraged to add them in the comments.

My conference in Beijing closed with Le Yucheng -- the Chinese equivalent of the State Department's director of policy planning -- giving a talk and then taking questions from the academics and policy wonks around the table. 

Based on what I heard and the consensus reaction of the old China hands around the table, Le's talk was pretty much boilerplate.  That's a term of art for policy mandarins --  it translates into "nothing new was said, just a recycling of old talking points and approved language."  However, for those of us who are not old China hands, even boilerplate can be somewhat revealing.  Here were the talking points that stood out for me: 

1)  "To be frank, people don't understand China."  Le provided a long litany of development problems and challenges facing China.  He found it hypocritical that the rest of the world complained about China not buying enough cars or airplanes from the rest of the world, but also about buying too much oil.  He provided a long spiel about how hard China is working to promote its economic development and overcome massive poverty.  This is code for, "do not expect us to be chipping in all that much for global public goods anytime soon." 

2)  "China is always a humble, modest nation."  This was, easily, the most jarring part of his talk.  Le claimed that since the founding of the People's Republic, China had not attacked any of her foreign neighbors.  I suspect that diplomats from India, Russia, South Korea, and Vietnam would have some strenuous disagreements with that assertion, but I was told that this is a standard talking point for Chinese diplomats (If you ask me, they'd be better off stating than China has had peaceful relations with the rest of the world in the post-Maoist era and -- unlike some other great powers that will go unmentioned -- has not averaged a military intervention every 18 months or so). 

This section was also jarring because it primarily consisted of backdoor brags.  Le claimed that China learned much from everyone else, and that he personally works so hard that he never goes on vacation and doesn't leave the office until 10 PM.  He then talked about how China had solved the Hong Kong problem, the rural development problem, and so forth. 

This sectiion ended with a small rant on how China was very, very different from, just to pick a country out of a hat, Norway.  Because Norway has less than 1% of China's population while having 100 times China's resources, Norway should apparently not offer advice to China on, well, anything.  Or, as Le put it, Norway is like a mini-car to China's bullet train.  Note to Norway:  I think China is still touchy about this. 

3)  "There is no Beijing Consensus."  This was a point that Le hammered home repeatedly.  He insisted that China had no original development model, and that Beijing certainly wasn't trying to recommend its model to nany other country.  As Le put it, "There is no best model in the world."  This part of Le's talk was also the most convincing, as the rest of the assembled Chinese academics made a similar point.  As one academic pithily noted, "both the Washington Consensus and the Beijing Consensus were invented in Washington!"

4)  China will not challenge the global order -- in other words, "we are not the USSR."  In a mild contradiction of his first point, Le listed the myriad ways in which China contributed to global order -- promoting domestic economic growth to stabilize the regional economy, contributions to UN peacekeeping, anti-terrorism cooperation, anti-piracy, purchasing European and American debt instruments, and -- an oldie but a goodie -- not devaluing the yuan during the Asian financial crisis.  Le stressed how much China benefitted from the existing order, and that while reforms might be needed, a wholesale change was not needed. 

5)  If you think the PRC government is bad, read our Internet chat boards.  This was interesting, as Le tried to stress that China's population was far more nationalist and hawkish on the foreign policy front than the PRC government.  He's not eactly wrong on this point, but it should be pointed out that given the various restrictions on what can be said on the Chinese internet, assertive nationalism is the only approved way of venting for the Chinese public. 

[Note to readers: Because Dan was upgraded to business class on his trip to Beijing, he was exposed to a serious viral infection in the food called metaphoricus overloadus, known more commonly as Friedman's Disease. Rest assured, it is far from fatal -- it usually passes after 24 hours of no travel. As near as we can determine, all the facts in the blog post below are accurate. While suffering from Friedman's Disease, however, side effects do include rapid-fire, over-the-top metaphors. Remember: You've been warned!! --ed.]

To truly understand the phenomenon that is China, you need to fly into Beijing's airport and then try to get into the city. That's it; that's all you need. Just that adventure alone will tell you all you need to know about the contradictions of the Middle Kingdom.

First you enter a glittering, modern airport, with helpful signs in Mandarin and English. It's sheer scale and modernity telegraphs the ways in which China has already entered modernity. The monorail from my terminal to baggage claim was a pointed reminder of how much the United States lags behind in infrastructure investment in recent years.

And yet, there's the traffic. Summer in Beijing is a confusing miasma of traffic and smog and traffic. As my compatriot and I clambered into our taxi at Beijing's immaculately clean and modern airport, we knew that the ride to the hotel could take anywhere from 30 to 90 minutes depending on the traffic. Just as we Americans don't know when exactly China will catch up, the Chinese are not sure how long it will take to get there.

We might like to think that driving in a New York City taxi is as exciting as a carnival ride, but that's nothing compared with a taxi ride on a Beijing superhighway. In New York, there's always that sense that, in the end, the taxi driver won't risk an actual collision. On the road to Beijing, however, I witnessed at least two last-minute swerves and road rage that would have made Los Angelenos blush. Using an accent that an old-style New York cabbie would have admired in its sheer swarthiness, my cabbie kept honking for at least two minutes after a car viciously cut him off.

It's a fantastical engineering problem, getting so many cars and motorcycles and trucks and buses to merge and move in the same direction. And that's when it hit me like a thunderbolt -- China itself is like this superhighway. It's massive in size, 10 lanes easy. It's filled with an array of vehicles determined to get ahead. The problem is that when you combine all the vehicles together, the real possibility of a two-week-long traffic jam in which everyone wants to go somewhere but nobody gets anywhere is clearly a possibility. Predicting China's future is like predicting the traffic:  You know there will be some stop-and-go, but you just don't know how much of it there will be.

When we got to the hotel, I paid my cabbie and he signaled that I owed him four more yuan. I was suffering from ATM disease, so I took out a single U.S. dollar bill and a 100-yuan note, looked at him, and said, "You choose." He paused, and then took the yuan note and made the necessary change. Clearly, all of us participating in this hyperaccelerated, globalized economy are going to have to make the necessary change soon enough.