In response to my critical post from last week, I see that Ted Galen Carpenter has doubled down on his thesis that, "China benefits from U.S. policy blunders."  Let's go through his main points, shall we?  

In his initial post, Carpenter argued that the American brand was damaged.  I argued that there had been a rebound.  Carpenter's response:  

America’s global popularity is still at anemic levels—and the initial euphoria about Barack Obama has faded noticeably. And as shown in the Pew Research Center’s 2010 survey of global attitudes, America’s reputation in the Muslim world is not just anemic, it is hideous. That’s 2010, Dan, not 2006.

Two responses.  First, the poll data Carpenter cites reflects attitudes about Barack Obama in particular and not the United States in general.  Since what we're both concerned with is America's soft power rather than Obama's, let's take a look at the BBC's latest World Service Country Rating Poll, since that asks the more appropriate survey question: 

Views of the US continued their overall improvement in 2011, according to the annual BBC World Service Country Rating Poll of 27 countries around the world.

Of the countries surveyed, 18 hold predominantly positive views of the US, seven hold negative views and two are divided. On average , 49 per cent of people have positive views of US influence in the world--up four points from 2010--and 31 per cent hold negative views. The poll, conducted by GlobeScan/PIPA, asked a total of 28,619 people to rate the influence in the world of 16 major nations, plus the European Union.

In 2007 a slight majority (54%) had a negative view of the United States and only close to three in ten (28%) had a positive view; America was among the countries with the lowest ratings. Views began to rise in 2008, with positive views rising to 32% on average, and now the USA is in a middle tier position, ranking substantially higher than China (emphases added)

 Oh, and that's 2011 data, Ted.   

Carpernter emphasizes the Middle East, and it's certainly true that U.S. favorability there remains quite low.  Even in that region, however, the latest data suggests things aren't getting worse, except in the country where the data is OBE: 

As views of the USA continue to improve globally, the upwards trend is also apparent in Muslim countries. For the first time, a majority of Indonesians are now positive about the USA's role in the world (58%, a rise of 22 points over the last year). Negative views of the USA in Turkey have dropped sharply from 70 per cent to 49 per cent, while negative views in Pakistan of the USA have also fallen slightly, from 52 per cent to 46 per cent. Conversely, Egypt, after a lift in 2009 and 2010, has reverted to a predominantly negative view of the USA, with 50 per cent of Egyptians considering that the USA's role in the world is mostly negative.

As for China's ability to exploit the current situation, here's Carpenter's response: 

China has shown recent signs of dialing back some of the more objectionable features of its policy. That stands in marked contrast to the U.S. military escalation in Afghanistan, Washington’s transparent efforts to maintain an outsized presence in Iraq after the scheduled withdrawal of its military forces, and the new intervention in Libya. In terms of intrusive policies, China doesn’t begin to compete with the United States....

[China's] weaknesses do not include running $1.5 trillion annual budget deficits (much less having much of that debt funded by one’s principal geopolitical competitor). Nor do China’s weaknesses include overstretching its military forces in Middle Eastern and South-Central Asian snake pits. Those are actions that the United States has taken, and it is naïve in the extreme to assume that China does not benefit strategically and financially from such folly. Yet, oddly, Drezner addresses none of those points contained in my TNI piece. 

Carpenter's point about U.S. military overextension is a good one, and is a concern I share.  Our disagreement is on the magnitude of the policy externalities that flow from this overextension.  Carpenter thinks it's disastrous; I think it's regrettable but not at the root of imminent U.S. decline to China.

First, it's worth noting that while defense spending plays a supporting role in the worsening U.S. fiscal situation, tax cuts and domestic expenditures are far more culpable.  Second, I have looked at whether China's holdings of U.S. debt lead to geopolitical weakness -- and concluded that this concern has been vastly exaggerated. 

Third, again, looking at global public opinion, there's evidence that China's economic rise has provoked far more anxiety than Carpenter realizes.  As Chinese power continues to grow (and that's going to happen regardless of U.S. strategy), more and more countries will be willing to balance with the United States regardless of past military errors.  Indeed, the "nationalistic swagger" that Carpenter references among Chinese policy circles is going to exacerbate and not retard this trend. 

I agree with Carpenter that it would be better for the U.S. to reduce its overseas military posture, particularly in Iraq and Afghanistan.  That said, China has profited surprisingly little from these missteps, and will experience greater geopolitical pushhback over time.   I'm also disappointed that Carpenter failed to address the question of how democratizing nations in the Middle East will view a China that continues to act in an authoritarian manner -- particularly towards its own Muslim population in Xinjiang.  It's not a coincidence that Iranian protestors started chanting "Death to China!" back in 2009. 

The bottom line is that Carpenter's analysis exhibits far too much of the doomsaying and pessimistic thinking that plagues American realists and their cheerleaders. 

I held out as long as I could on the Charlie Sheen fiasco -- but damn Will Winecoff and the IR-relevant horse he rode in on!!

From yesterday's Global Times, Hao Leifeng provides a peculiarly... Chinese take on the whole brouhaha:

Actor Charlie Sheen is a classic example of the difference in Western and Eastern values and norms.

Ignoring public pleas from his father, Sheen has continued a weeklong media blitz, exhibiting obvious signs of mania. With no firm hand to guide them, Western media has deliberately goaded him into making increasingly delusional statements, more concerned about "winning" higher ratings than Sheen's own sense of pride, or the negative example his brash public admissions about his private sex life and unverifiable international conspiracies could be setting for society.

How many young people have been led astray by Sheen's boasts about his substance abuse and freewheeling sex life? And that was when he was in character on national television, as a randy bachelor in Two and a Half Men.

Sheen attracted 1 million Twitter followers in just 24 hours, yet more evidence that microblogs spread the most unhealthy contagions in society like a disease. Chinese family, coworkers, or the authorities would have taken firm steps to make sure someone like Sheen did not make a public spectacle of himself.

It's true:  the Obama administration has been ridiculously slow on getting a handle on the Charlie Sheen issue.  I mean, you know that if Hillary Clinton got Sheen in a room for an hour, this whole problem would go away.  This just reinforces the administration's slowness on handling matters of serious popular culture.   

OK, seriously, as I understand it, Global Times is not the same kind of official mouthpiece as, say, China Daily or People's Daily, so I wouldn't take this as the official Chinese Communist Party position.  Hell, it might be a parody.  Still, a few revealing things from this.  There's the swipe against Twitter, and the emphasis on familial loyalties. 

I see two other interesting reveals, however.  The first is the proposed "Chinese" solution to this problem:

His employers are unhappy that he was distracted with prostitutes and drugs, and didn't show up to work on time. Why not take a tip from the Chinese business community, and make visits to a KTV parlor part of Sheen's workday?

And instead of epic parties at his home with porn stars, why not keep Sheen occupied with business banquets?

Sheen goes on television and boasts that he has two girlfriends, who both sleep in the same bedroom. Is he too poor to set up his wives and mistresses in different houses?

In Chinese society, these problems are dealt with delicately and privately. Sheen is like a typical Westerner throwing fuel on the fire with each interview and tweet. It is almost as if he feels no shame and is loving the attention.

Racism, spousal abuse, addiction, politics, mental illness, boasting about mistresses, - these are all subjects best dealt with behind closed doors.

Er... as near as I can determine, Sheen's bosses have been using this playbook for the entire run of Two and a Half Men.  It's only when Sheen thoroughly rejected all outaside intervention that everything blew up.  In other words, the Chinese solution to this was exactly the same as the American solution to this -- well, minus the massage parlors.  This continued right up until the moment when Sheen decided that the "Charlie Sheen" drug could defeat all comers.  And then he was suspended and subsequently fired.  Perhaps the fact that the government decided not to send him to the countryside and instead just got his children out of his orbit is peculiarly "western." 

Second -- and this is a genuine question to readers -- is Charlie Sheen actually a folk hero to anyone other than substance abusers at this point?  I see the attention he's getting now as in the category of, "Wow, look at that massive 12-car pileup on the other side of the road!!!  It's horrific, but I can't look away!"   Granted, he's now a prime candidate for his own reality show -- but I'm not really sure that's winning the future. 

This is the only time I will ask this about Charlie Sheen:  what do you think? 

UPDATE:  A commenter suggests that this must be a parody, albeit one that the editors of Global Times can't detect.  But the commenter provides an excellent additional takeaway point: 

[I]t's way easier to slip a humour piece disguised as a bizarre anti-US rant past the Chinese censor than it is to get a serious piece that is even vaguely critical of CCP policy published.

LAST UPDATE:  According to the Shanghaiist, the editors at Global Times were  in on the joke -- in which case your humble blogger will join Al Jazeera and admit to being punk'd.

Last week Reuters' Emily Flitter filed quite the story, entitled "China flexed its muscles using U.S. Treasuries ," about China's financial power over the United States.  Here's the opening: 

Confidential diplomatic cables from the U.S. embassies in Beijing and Hong Kong lay bare China's growing influence as America's largest creditor.

As the U.S. Federal Reserve grappled with the aftershocks of financial crisis, the Chinese, like many others, suffered huge losses from their investments in American financial firms -- from Lehman Brothers to the Primary Reserve Fund, the money market fund that broke the buck.

The cables, obtained by WikiLeaks, show that escalating Chinese pressure prompted a procession of soothing visits from the U.S.Treasury Department. In one striking instance, a top Chinese money manager directly asked U.S. Treasury Secretary Timothy Geithner for a favor.

This story generated a lot of interest across the mediasphere.  FT Alphaville called it "Diplomacy by US Treasuries."  AFP reports that the "sensitive cables show just how much influence Beijing has and how keen Washington is to address its rival's concerns." 

As someone who's published on this question, you'd think I'd be very happy at the attention this issue is receiving.  And Flitter deserves kudos for going through the cables to find clear efforts by Chinese officials to use its financial muscle to get what it wanted from the United States. 

The thing is, the reportage is framed to suggest that China not only asked for concessions, but the United States granted them.  And Flitter's own story suggests that very little in the way of concessions actually happened. 

Here are the portions of Flitter's story that discusses U.S. responses to Chinese pressure: 

On Chinese requests to halt/restrict arms sales to Taiwan:  Flitter records no response.  These concerns were voiced in late 2008 and the arms sales went ahead in early 2010, so there doesn't appear to be much influence here.  AFP suggests that this pressure led the U.S. to not sell F-16's to Taiwan, but I don't think that option was ever in the cards. 

On Chinese demands that they be provided guarantees for Chinese re-entry into the U.S. repo market:

The U.S. government does not appear to have offered the Chinese a special setup guaranteeing U.S. banks. Instead, the cables show, American diplomats reassured the Chinese by pointing out that Washington had infused banks' balance sheets with $700 billion in fresh capital, effectively propping up the banking system.

On Chinese demands for providing explicit U.S. government guarantees of Fannie Mae and Freddie Mac debt: 

To defuse the situation, the Treasury Department sent Undersecretary for International Affairs David McCormick to Beijing for two days in October 2008. The gesture went over well.

"All of Undersecretary McCormick's counterparts appeared to appreciate his willingness to come to Beijing in the midst of a financial crisis," Piccuta wrote in a cable dated October 29, 2008. "Interlocutors stressed that unless leaders' concerns about the viability of banks and U.S. government-sponsored enterprises (GSEs) are assuaged, lower-level officials will be constrained from taking on greater counter-party risks."

The cables show McCormick trying to reassure the Chinese. "In each meeting, Undersecretary McCormick emphasized that even though the U.S. government did not explicitly guarantee GSE debt, it effectively did so by committing to inject up to $100 billion of equity in each institution to avoid insolvency and that this contractual commitment would remain for the life of these institutions," [Deputy Chief of Mission at the U.S. Embassy in Beijing Dan] Piccuta wrote.

On Chinese protests regarding Federal Reserve purchases of Treasuries and agencies in March 2009:  Flitter has no response, though the fact that the Fed went ahead with QE2 suggersts that Chinese pressure didn't deter the Federal Reserve.

On responses to Chinese requests that CIC be allowed to participate in bidding on Morgan Stanley's new equity issuance:

There's no record in the cable of how Geithner responded, but it was only a day later, on June 3, that CIC announced plans to purchase $1.2 billion in Morgan Stanley shares.

A spokesperson for the Fed said in the instance of the June 3 CIC investment, no application for an exemption was made to the Federal Reserve Board.

On the general dynamic of Chinese financial pressure:

The cables also indicate a high level of confidence among the Americans that China can't entirely stop buying U.S. debt, a sentiment shared by most economists who describe the dynamic as a form of mutually assured financial destruction. 

So, to sum up, the Chinese maybe got a small break on being able to particupate in the Morgan Stanley auction.  Beyond that, all of these efforts led to the dilomatiic equivalent of hand-holding and not much else.  And, hey, what do you know, that's pretty much consistent with what I wrote about this back in late 2009.  So, contrary to some deep-seated fears of mine, the Wikiliaks cables appears to buttress rather than contradict prior scholarship. 

Flitter deserves credit for making explicit what had only been inferred, but I'm worried that commentators are drawing the wrong lessons from her article.  The big reveal here is not that China tried to exercise its financial muscle.  The big reveal is that these efforts generated next to nothing in the way of U.S. concessions.  China's financial might does give it the ability to deter U.S. pressure -- but to China's growing frustration, it doesn't yield much else. 

Your humble blogger likes to occasionally check the interwebs to make sure that no one is abusing Thucydides in making an argument about modern-day international relations. In descending order of offensiveness, examples of Thucydides Abuse include:

1) Blatantly making up what Thucydides actually said in History of the Peloponnesian War;

2) Exaggerating how Thucydides can contribute to understanding world politics today;

3) Writing the truth, but not the whole truth, about Thucydides' history.

Yesterday David Sanger invoked Thucydides in his New York Times Week in Review essay on a rising China and a fading United States. Let's see how he did:

For a superpower, dealing with the fast rise of a rich, brash competitor has always been an iffy thing....

[A]sk Thucydides, the Athenian historian whose tome on the Peloponnesian War has ruined many a college freshman's weekend. The line they had to remember for the test was his conclusion: "What made war inevitable was the growth of Athenian power and the fear which this caused in Sparta."

So while no official would dare say so publicly as President Hu Jintao bounced from the White House to meetings with business leaders to factories in Chicago last week, his visit, from both sides' points of view, was all about managing China's rise and defusing the fears that it triggers. Both Mr. Hu and President Obama seemed desperate to avoid what Graham Allison of Harvard University has labeled "the Thucydides Trap" - that deadly combination of calculation and emotion that, over the years, can turn healthy rivalry into antagonism or worse....

[I]n both capitals, fear makes for good business: It's a proven way to sell weapons systems.

Meanwhile, Thucydides might be appalled at the nationalistic talk that resounds in both countries. In Chinese newspapers these days, it's hard to avoid accounts of "American decline." Meanwhile, some new members of Congress talk lightly of cutting off Chinese access to the American market - as if that could happen in today's global economy.

In both languages, that's fear talking.

You know what? Given the space constraints, Sanger does pretty well. He manages to nail the subtle point about how fear leads to the worst sort of policy decisions. It is telling that, as the war progresses, Athenian decision-making devolves. Initially, the country's leaders understand that "fear, honor and interest" guide foreign policy. By the time the invasion of Sicily comes around, however, the Athenian leadership has reduced this to fear. Sanger actually quotes Thucydides rather than paraphrasing him. By modern journalistic standards, that's pretty extraordinary.

Nonetheless, Sanger commits the misdemeanor of omitting the whole truth of Thucydides. This is important, because the omission gets at how the historical analogy doesn't really hold up.

First, Sparta was never the hegemonic power prior to the war -- at best, they were a co-equal of Athens. That's not the current situation.

Second, Sparta was scolded by its allies -- and implicitly, by Thucydides himself -- for excessive caution when confronted with a rising power. Throughout the History of the Peloponnesian War, Thucydides contrasts Athenian energy and dynamism with Spartan conservatism and risk-aversion. Spartan fear was triggered by past Spartan inaction and caution.

Now, say what you will about American foreign policy, but conservatism and risk-aversion have not been nouns associated with it for quite some time. Similarly, until about mid-2009, China was not thought of as a source of foreign policy dynamism. Furthermore, when China's foreign policy changed, so did the United States'. Comparing the Obama administration's response to Spartan inaction doesn't hold up.

In the sparest structural sense, there are a few parallels that can be drawn between Greece in the fifth century B.C.E. and the present day. On the whole, however, I think the Athens-Sparta historical analogy obfuscates more than it enlightens.

Readers are warmly encouraged to alert the hard-working staff here at the blog for any further abuses of Thucydides. I mean, you know this is going to crop up on the next Jersey Shore episode.

I'm at the point in my life when there are only three occasions that prompt the watching of cable news:

1) An election night;

2) A real-time breaking news event in which video has a comparative advantage over the web;

3) Being on the treadmill on a slow sports day with nothing good on basic cable.

So yesterday was no. 3, and I caught a report on Fox News about "pre-summit brinkmanship" on the part Hu Jintao. The headline was accurate: "China's President Hu Jintao: Dollar-Based System 'Thing of the Past.'" And I should stress that Fox News was hardly the only news outlet to jump on this turn of phrase.

That said, some perspective might be in order. The statement came from a series of answers that a committee of propaganda writers with the stylistic panache of Andrei Gromyko Hu provided to the Wall Street Journal and Washington Post.

Let's reprint the question and answer in full, shall we?

Q: What do you think will be the US dollar's future role in the world? How do you see the issue of making the RMB an international currency? Some think that RMB appreciation may curb China's inflation, what's your view on that?

HU: The current international currency system is the product of the past. As a major reserve currency, the US dollar is used in considerable amount of global trade in commodities as well as in most of the investment and financial transactions. The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable and stable level.

It takes a long time for a country's currency to be widely accepted in the world. China has made important contribution to the world economy in terms of total economic output and trade, and the RMB has played a role in the world economic development. But making the RMB an international currency will be a fairly long process. The on-going pilot programs for RMB settlement of cross-border trade and investment transactions are a concrete step that China has taken to respond to the international financial crisis, with the purpose of promoting trade and investment facilitation. They fit in well with market demand as evidenced by the rapidly expanding scale of these transactions.

China has adopted a package plan to curb inflation, including interest rate adjustment. We have adopted a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. Changes in exchange rate are a result of multiple factors, including the balance of international payment and market supply and demand. In this sense, inflation can hardly be the main factor in determining the exchange rate policy (emphases added).

Meh. First of all, Hu isn't saying anything here that hasn't been said by other Chinese officials since early 2009.

Second of all, Hu didn't say that the RMB was going to be supplanting the dollar anytime soon. In fact, he pretty much said the opposite of that. China wants a multiple-reserve currency regime, and they're moving veeeerrrrrry slowly to bring their currency into the conversation. And minus the RMB, as I've said before, there ain't much in the way of viable alternatives right now.

If you read the rest of the answers, there's a lot of CCP boilerplate "stiffly worded answers" mixed in with "a positive note on bilateral ties," as Richard MacGregor of the Financial Times notes. What I don't see is any brinkmanship.

Substantively, however, what about the future? Will a multiple currency reserve system work? It's a vision shared by Barry Eichengreen, Nicolas Sarkozy, and.... well, I'm not sure who else. I have my doubts, but I can't quite convey them in a single blog post.

What do you think?

Foreign Policy asked many smart people, and then me, for some nuggets of unconventional wisdom heading into 2011.  My contribution is on how China isn't all that and a bag of chips. 

My closing paragraph: 

Exaggerating Chinese power has consequences. Inside the Beltway, attitudes about American hegemony have shifted from complacency to panic. Fearful politicians representing scared voters have an incentive to scapegoat or lash out against a rising power -- to the detriment of all. Hysteria about Chinese power also provokes confusion and anger in China as Beijing is being asked to accept a burden it is not yet prepared to shoulder. China, after all, ranks 89th in the 2010 U.N. Human Development Index, just behind Turkmenistan and the Dominican Republic (the United States is fourth). Treating Beijing as more powerful than it is feeds Chinese bravado and insecurity at the same time. That is almost as dangerous a political cocktail as fear and panic.

 Be sure to read the rest of them -- really, the other contributors are all smarter than me. 

Well, it was a very exciting weekend on the Korea peninsula, as South Korea vowed to go ahead with live-fire artillery exercises on Yeonpyeong Island, site of the artillery exchange between ROK and DPRK earlier this month. North Korea vowed to retaliate, the U.N. Security Council met all day yesterday without any agreement on the matter, Seoul recommended island residents go to bunkers, and everyone urged restraint by everyone else.

Very exciting!! How would today's exercise play out? Mark McDonald and Martin Fackler report for the New York Times:

Defying North Korean threats of violent retaliation and "brutal consequences beyond imagination," South Korea on Monday staged live-fire artillery drills on an island shelled last month by the North.

The immediate response from Pyongyang was surprisingly muted, however. A statement from the North's official news agency Monday night said it was "not worth reacting" to the exercise.

"Maybe we had a little impact," said Gov. Bill Richardson of New Mexico, who as an unofficial American envoy was in Pyongyang when the drills ended. Mr. Richardson, a former ambassador to the United Nations, said earlier that the North had offered concessions on its nuclear program, including a resumption of visits by United Nations inspectors.

Wait, that's it? Pyongyang issues threat after threat and then claims the whole thing isn't worth their bother? Let's dig a little deeper into the Times story:

The question now is whether the North will make good on its promises to retaliate, and how it might do so. Mr. Lankov, the analyst, said he did not expect a massive response by Pyongyang because the recent incidents are part of a North Korean "strategy of tensions," meaning that North Korean leaders want to choose when and where to strike.

"I do not think the North Koreans will do much this time," Mr. Lankov said. "They'd rather deliver a new blow later when they will be ready. But the maneuvers still mean a great risk of escalation."

Meanwhile, Mr. Richardson said the North had agreed to concessions related to its nuclear program, a main source of tension on the peninsula. A former United States special envoy to North Korea, Mr. Richardson was on an unofficial trip approved by the State Department. He met with high-ranking military officials, the North Korean vice president and members of the Foreign Ministry over four days.

Mr. Richardson said the North had made two significant concessions toward reopening six-party talks on the country's nuclear program. The North's proposal would allow United Nations nuclear inspectors back into the Yongbyon nuclear complex to ensure that it is not producing enriched uranium for a nuclear bomb. The North recently showed an American nuclear expert a new and stunningly sophisticated facility there. It expelled international inspectors last year.

North Korean officials also told Mr. Richardson that their government was willing to sell 12,000 plutonium fuel rods to South Korea, removing bomb-making material from the North, he said. "I would describe this as important progress," he said of the concessions.

So now North Korea also wants to restart the Six-Party Talks? What just happened? As always, trying to explain North Korean behavior is a challenging task. Here are some possible explanations:

1) North Korea finally got caught bluffing. True, they have the least to lose from the ratcheting up of tensions, but that doesn't mean they have nothing to lose from a military escalation with the ROK. The past month of tensions got everyone's attention, and North Korea is only happy when everyone else is paying attention to them.

2) Kim Jong Un was busy. One of the stronger explanations for the DPRK's last round of provocations was that this was an attempt to bolster Kim the Younger's military bona fides before the transition. Reading up on what little is out there, it wouldn't shock me if he planned all of this and then postponed any retaliation because he'd organized a Wii Bowling tournament among his entourage.

Somewhat more seriously, it's possible that there are domestic divisions between the military, the Foreign Ministry, and the Workers Party, and that the latter two groups vetoed further escalation.

3) China put the screws on North Korea. For all the talk about juche, North Korea needs external aid to function, and over the past year all the aid lifelines have started to dry up -- except for Beijing. As much as the North Koreans might resent this relationship -- and they do -- if Beijing leaned hard on Pyongyang,

4) North Korea gave the ROK government the domestic victory it needed. Bear with me for a second. The shelling incident has resulted in a sea change in South Korean public opinion, to the point where Lee Myung-bak was catching hell for not responding more aggressively to the initial provocation. This is a complete 180 from how the ROK public reacted to the Cheonan incident, in which Lee caught hell for responding too aggressively.

Lee clearly felt domestic pressure to do something. Maybe, just maybe, the North Korean leadership realized this fact, and believed that not acting now would give Lee the domestic victory he needed to walk back his own brinksmanship.

5) Overnight, the DPRK military hired the New York Giants coaching staff to contain South Korean provocations. Let's see... a dazzling series of perceived propaganda victories, followed by the pervasive sense that they held all the cards in this latest contretemps. Then an inexplicable decision not to do anything aggressive at the last minute, after which containment policies fail miserably. Hmmm… you have to admit, this MO sounds awfully familiar.

If I had to make a semi-informed guess -- and it's just that - I'd wager a combination of (1) and (4).

Alternative explanations welcomed in the comments.

Pssst… international relations majors and masters students. Having a hard time coming up with a BA or MA thesis topic? Worried that too many of your friends are writing about Wikileaks?

Here's a fun little project, courtesy of the Financial Times' Andrew Ward and Geoff Dyer:

China's campaign to boycott this year's Nobel Peace Prize was shown to have had some success after 18 countries joined Beijing in declining invitations to Friday's award ceremony for Liu Xiaobo, a jailed democracy activist.

Russia, Saudi Arabia, Colombia and Pakistan are among 19 countries, including China, that have declined invitations to the prize-giving.

The Norwegian Nobel committee has accused Beijing of applying "unprecedented" pressure on countries to boycott the Oslo ceremony, amid Chinese anger over the award to the jailed dissident.

The other absentees are expected to be Kazakhstan, Tunisia, Serbia, Iraq, Iran, Vietnam, Afghanistan, Venezuela, the Philippines, Egypt, Sudan, Ukraine, Cuba and Morocco, according to the Norwegian Nobel Institute, which is organizing the ceremony....

Ambassadors from all countries with embassies in Oslo are invited to the ceremony each year. As of Tuesday, 44 countries had indicated they would be represented on Friday.

Two countries - Algeria and Sri Lanka - had not replied.

It was not clear that all 19 absentees were staying away because of China but the Nobel Institute said the number of expected no-shows was higher than usual.

In 2008, for example, when the prize was won by Martti Ahtisaari, a relatively uncontroversial Finnish politician, 10 embassies were not represented at the ceremony for various reasons (emphases added).

OK, here's your thesis topic: what were the key factors that determined a country's decision not to attend Lu's Nobel ceremony? How much of this was due to Chinese pressure, how much was due to ideological affinity with the Chinese regime, and how much was due to the ambassador's spouse renting The Expendables on Netflix and absolutely needing to watch it that night?

The obvious variables to consider are alliance patterns, regime type, trade with/aid from China, proximity to Beijing, and maybe a corruption measure. That said, if you look at the list of all foreign embassies in Oslo, there are some interesting questions to ask. Why is Thailand attending but not the Philippines? Why is Colombia joining Venezuela in not attending? Why is Vietnam, an enduring rival of China, allying with China on this issue?

Go to it, students! And check out the lively comments that I'm sure will be posted down below that provide additional hypotheses. And remember, "A day without social science is like a day without sunshine."

UPDATE:  Reuters does some preliminary field work.  The most interesting and candid admission:

Embassies are not required to explain why they accept or decline a Nobel invitation, but a senior Filipino diplomat spoke candidly, underlining China's growing power, especially in Asia.

"We do not want to further annoy China," he said.

You know, as insults go, this one is pretty bush league:

China's credit-rating agency on Tuesday downgraded its rating for U.S. sovereign debt and warned of further cuts, in a pointed move ahead of this week's Group of 20 major economies meeting.

Dagong Global Credit Rating Co. Ltd., the only wholly Chinese-owned rating agency, cut its rating on U.S. debt to A from AA, citing the Federal Reserve's move last week to initiate another round of asset buying, worth $600 billion. It also placed the U.S. sovereign credit rating on negative watch.

"The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar and the continuation and deepening of credit crisis in the U.S.," Dagong said.

"Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government's intention of debt repayment," the agency said.

Sounds very, very serious, until we get to this part of the story:

The downgrade of the U.S. rating by Dagong comes just over a month after the U.S. Securities and Exchange Commission denied the firm's application to officially rate bonds in the U.S.

At that time, Dagong called the SEC's move discriminatory and said it was considering legal action.

The SEC said in denying the application that "it does not appear possible at this time for Dagong to comply with the record keeping, production and examination requirements of the federal securities laws."

Indeed, even the New York Times' now-thrice-weekly story about rising Sino-American tensions observes:

In the rest of the world, the United States is still the strongest of credit risks, and the Chinese downgrade is not expected to have much real impact....

[T]hose critics, mostly countries that fear that recent American policy will devalue the dollar and undercut their competitiveness, do not appear poised to offer an alternative to an economic order that has been led by the United States since the end of World War II, or to the role the dollar has played for decades as the de facto world gold standard.

The Chinese, who have protested that the Federal Reserve is trying to unilaterally manipulate the dollar for the purpose of creating jobs at home, have been accused of doing exactly that for years - the root of many of the world's economic tensions today, in the eyes of Mr. Obama and his economic aides.

Look, clearly China is suffering from... an insult gap. Americans have been leading the world in trash-talking for decades now. China is trying hard to catch up, but I think the authorities in Beijing need some assistance in their game of catch-up.

I hereby call on all readers to offer, in the comments, ways that Chinese authorities can really sharpen their rhetorical jabs at the United States. In the spirit of kicking off the conversation, here are a few suggestions:

"Chinese Halitosis Institute Downgrades American Fresh Breath Index to BB: 'Seriously, What's The Deal With All The BBQ,' Asks Agency Head"

"Chinese Election Monitors Accuse Obama Administration of Rampant Ballot Fraud During Midterm Elections: 'It's No Myanmar, I'll Say That' According to Chief Monitor"

"Chinese Dietary Institute says American Food Leaves Them Hungry After Only 12 Hours"

Go to it.

Trying to pick the most offensive campaign ad of this election season is not easy -- there's a long and distinguished list of truly offensive ads out there. However, my award for Most Offensive Ad goes to the Democratic Senatorial Campaign Committee with this attack ad on Pennsylvania Republican senatorial candidate Pat Toomey:

I'll give credit to the DSCC: Not everything in the ad is offensive, just 98 percent of it. By far, however, the worst part is the DSCC's suggestion that Pennsylvanians not vote for Toomey because he thinks that "it's great that China is modernizing and growing." Using that logic, apparently the DSCC supports doing everything to keep China backwards and impoverished. Which, if you think about it a little bit, is really disgusting.

I'd love to say that this is the only anti-globalization ad of this election cycle, but that's obviously not true. In another ad, the DSCC blasts Toomey for -- God forbid -- spending part of his career overseas. Forbes' Shikha Dalmia points out, however, that both sides have been throwing up mercantilist ads as fast as they can produce them: 

Virg Bernero, the Democratic gubernatorial candidate in Michigan, where I live, has dubbed his opponent, Rick Snyder, Chief Executive Outsourcer (ha, ha). Mr. Snyder's crime is that he is a successful businessman who invested in a semiconductor company that once employed five -- five! -- people in Shenzen to sell its products in China. In other words, it is no longer a sin to buy from China. It is also a sin to sell to China! (Where did Bernero get his views on trade theory, anyway? The Kim Jong Il School of Autarky?)

Nor is Bernero alone in the Democratic Party: California Sen. Barbara Boxer is accusing her opponent Carly Fiorina, former CEO of Hewlett Packard, of outsourcing thousands of jobs to "Shanghai instead of San Jose"; Senate Speaker Harry Reid is calling Sharron Angle "a foreign worker’s best friend"; and Richard Blumenthal, Connecticut Attorney General running for Senate, who lied about serving in Vietnam, has the temerity to attack his opponent, the former CEO of World Wrestling Entertainment, for "outsourcing" American jobs because her company got toy action figures manufactured in China instead of America.

Hostility to trade is par for the course for Democrats perennially beholden to Big Labor, but what is the excuse of Republicans -- the alleged believers in free markets? In race after race, they too are hitting China to beat Democrats. In West Virginia, Spike Maynard, a Republican running for the House is airing ads against his opponent, complete with Asian music in the background, castigating him for giving stimulus money to a Texas company that happens to be buying windmills from China. Meanwhile, in Virginia Republican Robert Hurt is accusing Rep. Tom Perriell of supporting tax breaks for foreign companies "creating jobs in China."

Well, it's not that surprising to see this. Americans think about trade through a mercantilist, relative gains lens, as opposed to the radical concept that trade can generate win-win outcomes. The Obama administration has abetted this mindset with a trade policy that careens between an idiotic exclusive focus on exports and complete radio silence. And, of course, China has been taking steps in recent months in order to perfect their role as economic bogeyman.

I'd love to say that if the Obama administration mounted a full-throated defense of trade liberalization, this mindset would go away. The thing is, I don't believe that. As the Gallup data suggests, even decent growth rates won't eliminate the zero-sum mindset that people have when it comes to free trade. 

Developing… in a thoroughly depressing manner. 

Today's Tom Friedman column on China's future is a pretty good one, in that it demonstrates how and why Friedman excels at a craft that flummoxes the best essayists. First, he asks a great question: 

[O]ne of the most intriguing political science questions in the world today is: Can China continue to prosper, while censoring the Internet, controlling its news media and insisting on a monopoly of political power by the Chinese Communist Party? 

Then, he makes a coherent argument in less than 800 words that the most populous nation in the world will have no choice but to liberalize and democratize. Friedman's thesis:

The “Beijing Consensus,” of economic liberty without political liberty, may have been a great strategy for takeoff, but it won’t get you to the next level....

My reason for believing China will have to open up sooner than its leadership thinks has to do with its basic challenge: It has to get rich before it gets old....

The only stable way to handle that is to raise incomes by moving more Chinese from low-wage manufacturing jobs to more knowledge- and services-based jobs, as Hong Kong did. But, and here’s the rub, today’s knowledge industries are all being built on social networks that enable open collaboration, the free sharing of ideas and the formation of productive relationships — both within companies and around the globe. The logic is that all of us are smarter than one of us, and the unique feature of today’s flat world is that you can actually tap the brains and skills of all of us, or at least more people in more places. Companies and countries that enable that will thrive more than those that don’t.

This argument is clear enough for the average New York Times reader to get it. It's also clear enough for us foreign policy bloggers in pajamas online analysts to point out where and how he's wrong. In particular, Friedman makes two large errors:

1) It's not clear that China has to get to "the next level" of economic development in order to become the most powerful country in the world. China's GDP could be larger than America's while still possessing only 1/3  the per capita income of the United States. If the rest of China were to enjoy the infrastructure and living standards or, say, Shenzhen, China would be doing quite well for itself. And as Chinese consumers demand more goods and services, the domestic jobs that power the rise of middle-class professionals -- teachers, lawyers, consultants , environmental engineers, travel agents, etc. -- will start to emerge in large numbers. 

Just to be clear here -- Friedman is right to say that greater liberty is likely to lead to more innovative growth. My point is that a population of a billion plus people allows the government to focus on intensive growth for an awfully long time and still prosper an amazing amount. 

2) In a world of network technologies and externalities, the best and most innovative technology does not always win -- the technology used by the most customers develops the lock-in. China doesn't have to have a technological edge, it just has to ensure that the largest market in the world embraces China-friendly technologies. Hey, come to think of it, you know what institution could ensure that occurrence? The Chinese Communist Party.

[Still, you hope Friedman is right and you're wrong.... right? --ed. Well, in theory yes, but...... after reading this SPIRI paper on China's new foreign policy actors, I'm not so sure. The common thread in that paper is that the more pluralist actors were also the most nationalist. It's entirely possible that a freer China is also a more reckless China.]

FP's own Steve LeVine has an essay at The New Republic that notes the Obama administration's efforts to dial down U.S. intervention in Central Asia. LeVine is clearly ambivalent about this policy shift: 

President Obama's public rationale for this shift is clear. He wants arms control agreements, victory in Afghanistan, and the denuclearization of Iran -- and Russia has a role to play in all three. Reset has lubricated new agreements with Russia that enable, for example, the speedy overflight of U.S. military planes across the North Pole and on to Kyrgyzstan, in support of the war in Afghanistan; the sale of Russian military helicopters, to be paid for by the Pentagon, to the Afghan government; and a tighter financial squeeze on Iran. Meanwhile, on the domestic front, absent any other fulfillment of Obama’s campaign vow to win hearts and minds abroad through civility, the "reset" is Exhibit Number One that good manners work.

In addition, Obama officials believe that, while the great-power-rivalry strain of geopolitics in the region may have been necessary in the 1990s, it is now obsolete. When Heslin's policy was initially drawn up, its concrete objective was to provide the Caucasian and Central Asian states with a financial channel independent of Moscow's grip. That meant the construction of energy pipelines to alternative markets, especially the Baku-Ceyhan oil pipeline from the Caucasus to Turkey. But that policy has largely succeeded: The full flow of oil Baku-Ceyhan began in 2006. The Central Asian states of Kazakhstan and Turkmenistan are not linked in -- and given their cautious nature, they are unlikely to risk Russia’s ire by agreeing to be connected by pipeline with the West -- but they have also developed alternate export routes through China, which has constructed its own pipelines that serve precisely the same function....

President Obama must realize that his new policy ultimately represents a trade-off. While the geopolitical gains from deemphasizing the Great Game have been substantial, the local costs of America's hands-off approach have been quite high. In Kyrgyzstan, which is still embroiled in ethnic strife, deferring to Russia has meant leaving a largely powerless government to its own devices. Azerbaijan has nervously struck up negotiations over natural-gas with Russia’s Gazprom in order to forestall any possible trouble of its own with Moscow. And the United States has adopted a far different approach toward local leaders, swallowing Kazakhstan's backsliding on what they believed was the country's private commitment to release imprisoned opposition political activist Yevgeny Zhovtis, and deepening relations with Uzbekistan's President Islam Karimov, probably the most brutal leader in the former Soviet Union. In other words, the reset has a serious downside: By deciding that the politics of Central Asia are what they are, Washington risks losing its justly earned reputation as the region's protector of political and economic independence.

From a U.S. perspective, this is fine. Let Russia and China jockey for influence. Geographic proximity and the 'stans' own geopolitical interests will prevent either great power from establishing hegemony over the region. This will allow them to maintain as much political autonomy as possible when bordering two civilizational entities. 

I can't get too worked up about this. First, Central Asia is about as far away from the United States as one can get -- if there was any region in which a low U.S. profile was called for, this is the region. 

Second, Central Asia is not being left to Russian hegemony. Indeed, my official U.S. sources tell me that the Russians don't care about the U.S. influence in the region. What freaks them out is China's growing regional influence. That's understandable. With a rapidly growing and energy-thirsty economy, China has a compelling interest in the 'stans.   

Third, I'm not sure that the U.S. is sacrificing all that much. LeVine argues that the U.S. has played a constructive role by fostering human rights and political autonomy. I don't think the latter is going away. As for the former, to be  blunt, the U.S. doesn't have all that shiny a track record. With the partial exception of Kyrgyzstan, the countries in this region have ranged from mildly authoritarian (Kazakstan) to wacky totalitarian (Turkmenistan). U.S. human rights interventions accomplished little in the 1990s, and have been even less effective since 9/11 -- indeed, Kyrgyzstan has backslid pretty dramatically. 

There are a lot of regions in the world where I think a robust U.S. presence is a good idea. Central Asia is no longer one of them. 

Hey, remember last week, when I was blogging about how China was threatening Japan with a rare earth ban because the Japanse government had a Chinese boat captain in custody?  And remember how I said that, "given the spate of flare-ups between Japan and China as of late, the last thing Tokyo will want to do is back down in the face of Chinese economic coercion"?

Ummm..... whoops:

Japanese prosecutors have released the captain of a Chinese fishing boat, two weeks after a collision in disputed waters sparked a dramatic deterioration in ties between Beijing and Tokyo....

Prosecutors on the southern Japanese island of Okinawa, where Zhan was detained, said they would monitor both governments' response to their decision before deciding whether to indict him, but that course of action is looking increasingly unlikely.

They said the row caused by Zhan's detention and the possible impact on Japan-China ties had been a factor in their decision....

Japanese officials had earlier warned that the swift deterioration in bilateral ties posed a threat to the economies of both countries.

China was Japan's largest trading partner last year and Japan was China's third largest. Bilateral trade reached $147bn (£93.6bn) in the first half of this year – a jump of 34.5% over the same time last year, Japanese figures show.

"A cooling of relations between Japan and China over the Senkaku problem would be bad for Japan's economy, but it would also be a minus for China," Japan's finance minister, Yoshihiko Noda, said.

"It's desirable that both sides respond in a calm manner."

A few commentors to my last post took this opportunity to tell me to go suck a lemon the errors of my ways.  To which I must respond....  not so fast. 

I had four points to make in that post: 

 A)  Japan was unlikely to bow to economic pressure from China;

B)  China's use of a rare earths export ban was not likely to have much leverage;

C)  China was overestimating its overall ability to translate economic power into political leverage; and

D)  Because of these actions, the rest of the Pacific Rim was going to start getting much closer to the United States. 

Now, let's go through these in the context of this Associated Press story about the latest in this Sino-Japanese kerfuffle:  

Tension between China and Japan bumped back up a notch Monday when Tokyo asked Beijing to pay for damages to patrol boats hit by a Chinese fishing vessel in disputed waters, countering China's demand for an apology over the incident.

The diplomatic back-and-forth shows that nationalistic sentiments stirred up by the incident — and the territorial dispute behind it — are not fading even after Tokyo released the ship's captain Friday amid intense pressure from China.

Welcoming the skipper home as a hero, China stunned Japan over the weekend by demanding an apology and compensation over his arrest, a move that reflects Beijing's growing self-confidence and its attempts to test the resolve of key neighbors like Japan, Washington's closest ally in the region.

Criticized at home for caving in to Chinese pressure, Prime Minister Naoto Kan's government responded by issuing its own demand for compensation and calling on Beijing to decide whether it wanted to repair frayed ties.

"At this point, the ball is now in China's court," said Chief Cabinet Secretary Yoshito Sengoku....

Some experts saw China's demand for an apology as overreaching — and bad publicity in a region where neighbors are already concerned about the nation's expanding military and political clout. China is embroiled in several other territorial disputes.

"Beijing has scored an own-goal here. It really reflects badly on them," said Jeff Kingston, director of Asian studies at Temple University's Tokyo campus. "All that smile diplomacy, reassuring regional neighbors that the rise of China is unthreatening, has just gone up in smoke."

More broadly, the dispute and others like it has created openings for greater U.S. engagement in Asia as China begins to vie with the U.S. for dominance in the region.

On Friday, President Barack Obama and Southeast Asian leaders sent China a firm message over territorial disputes, calling for freedom of navigation and peaceful resolution of disputes in seas that China claims as its own. Obama said the U.S. plans to "play a leadership role in Asia."

Hmmm.... well, Japan did hand over the captain, so it seems that I was pretty wrong on (A).  That said, this story also suggests I'm a little right on (A) and very right on (C) and (D).  China overreached -- again -- in demanding compensation and an apology (though looking past this latest episode, there are some indications that China recognizes its overreaching vis-a-vis the USA).  This caused Japan to dig in its heels.  And, finally, all of this is pushing the region closer to the United States.   

[What about the rare earth lever?--ed.]  Damien Ma knows more about this than I do:

Given the expansive universe of Japanese high-tech sectors, Japan depends on China for the bulk of its RE supplies. Now, China produces roughly 95% of global RE supplies, but has only about 1/3 of the world's total reserves. Having such immense control over a particular resource naturally leads to suspicion, especially among buyers, that China could wield "supplier leverage" to manipulate prices and supplies, much like how a cartel would behave....

China's supply dominance was driven by market dynamics in the first place. Other RE mines closed production, in part because of environmental issues, while China continued to produce at a low price. Now that price is rising in China, it might be more cost-effective to start mine development elsewhere. If China really is trying to be the "OPEC" of rare earth elements, then global markets would react to cartel-like behavior, probably by accelerating development, eventually undermining Chinese monopoly on supply. Problem is, development takes time, so for now, it's tough to get off Chinese supply.

At worst, I was slightly wrong on (B) in the short term -- and this doesn't get into Japan's stockpiling of rare eaarths.  Furthermore, I am going to be much less wrong about this over time.  China's market power over rare earths is clearly temporary.  Regardless of whether they were trying to use their monopsony power to extract concessions from Japan, the perception of China's economic statecraft is going to encourage a lot of countries to subsidize their domestic supply. 

So, to sum up:  I was more right than wrong.  I hereby dare my thoughtful and cantankerous readers to go suck two lemons demonstrate the error of my interpretation yet again in the comments section.

This week Japan has provoked the ire of the United States and Europe by unilaterally intervening in currency markets to depreciate the yen against other major currencies. Japanese Prime Minister Naoto Kan has responded to these criticisms by telling the US and EU to go suck a lemon stating that further "resolute actions" would be taken on this front. 

This comes on the heels of mounting U.S. frustration with China's "go-slow" policy on letting the yuan appreciate against the dollar. [What do you mean by "go slow"?--ed. Let's put it this way: the tortoise thinks that China is being pokey on this question.]

So, is this the beginning of beggar-thy-neighbor? Will other countries start intervening in foreign exchange markets to gain a competitive advantage for their export sectors? 

The New York Times' Hiroko Tabuchi thinks not, because Japan can't unilaterally devalue its currency like in the old days:

It is unlikely, though, that intervention by Japan alone will sway currency markets in the long term. The global volume of foreign exchange trading has grown rapidly in recent years, which prevents intervention by a single government from countering bigger market trends.

Other countries are unlikely to help Japan’s cause, because they need to keep their own currencies weaker to bolster exports. A weak currency makes a country’s exports more competitive and increases the value of overseas earnings.

Much of the yen’s weakening came from investors selling the currency on expectations that the Japanese government would be more active in keeping the yen in check. Japan did not disclose how much it had spent in currency transactions, but dealers put the initial amount at 300 billion to 500 billion yen ($3.5 billion to $5.8 billion).

But as Switzerland found this year, a single government’s efforts to weaken its currency can prove futile. Switzerland abandoned that effort, after its central bank had lost more than 14 billion Swiss francs ($14 billion) in foreign currency holdings in the first half of the year, after a fall in the euro’s value ate into the bank’s reserves.

The Swiss franc is also seen by investors as a relative haven and has also strengthened amid global financial unrest. This month, the franc hit a record high against the euro.

Hmmm.... maybe. Japan's economy is much larger than Switzerland, so I'm not sure the comparison holds up. The real problem, however, appears to be that countries perceived of as "safe havens" wind up with overvalued currencies. 

This little parable also makes me wonder whether we might see beggar-thy-neighbor policies in a different guise this time around. This is going to sound a little crazy, but here goes: rather than explicit exchange rate intervention, what if countries decided to play fast and loose with Basle III and other measures to strengthen financial integrity? 

This really does sound crazy -- it suggests that governments would be willing to tolerate a higher risk of domestic banking collapse in order to avoide being a "safe haven" status for capital. That said, think of how much Europe benefited from the depreciation of the euro due to the Greek crisis. Basle III, by taking so long for banks to meet standards allow those countries with more insolvent financial institutions **cough** Germany **cough** to take their own sweet time in having them meet new capital adequacy standards.  This would allow Germany to have the euro stay relatively cheap without abandoning its anti-inflationary zeal. 

Now, in all likelihood, not even the Germans would purposefully do this. This is crazy talk. What I'm suggesting, however, is that there is more than one way for a country to have its currency depreciate, and these policies are substitutable. Looking only at explicit exchange rate intervention might be just a bit too narrow. And if more countries find more ways of keeping their currency undervalued, well then, the days of beggar-thy-neighbor would have arrived.

Developing....