U.S.–China Week: U.S. goes public with harder line on China (Issue 6, 2015.05.25)

Welcome to Issue 6 of U.S.–China Week, slightly abbreviated as the United States observes Memorial Day today. Instead of five big ideas, I’ll cover some especially important developments in greater depth and leave you with a few links to others. For East Asian regional security news, watch as the Shangri-La Dialogue unfolds this week.

As always: Please encourage interested friends and colleagues to subscribe to the list. You can find a copy of this issue at Transpacifica.net. That’s the best link to share on social media. Please send your comments, quibbles, and suggestions to mail@gwbstr.com.

GOING PUBLIC
U.S. brings CNN along for South China Sea surveillance flight, raising daily tensions to public attention

A CNN team tagged along on a U.S. surveillance plane as it flew in what U.S. officials emphasized was international airspace in the South China Sea, near islands under construction by the Chinese government. The Chinese military repeatedly asked the U.S. plane to leave “to avoid misunderstanding.” Top U.S. East Asia diplomat Daniel Russel called the flight a “regular occurrence” and “entirely appropriate,” and said “we will continue to fully exercise our rights globally to the international space.” A Chinese Foreign Ministry spokesperson said flights like this pose a “potential threat to the security of China’s maritime features, and [are] highly likely to cause miscalculation, or even untoward maritime and aerial incidents.” The planereportedly did not enter a 12 nautical mile radius surrounding the artificial islands; doing so would be a direct challenge to Chinese territorial claims, one a Pentagon spokesperson said “would be the next step.”

ANALYSIS: The U.S. government has clearly made a decision to increase public pressure on the Chinese government over the South China Sea, either specifically because of alarm over the island building or using that development as an example. Surveillance flights like this are nothing new, but putting a CNN team on a highly sensitive intelligence plane and declassifying military audio and video has raised unprecedented attention. (U.S. officials might also have seen the well-respected CNN correspondent as a friend, since he previously served as chief of staff to a U.S. ambassador in Beijing. Both the U.S. government and CNN should have been sensitive to how this apparent potential conflict of interest might be read in Beijing.) This follows on the moves discussed in the first item last week, showing that the CNN report is part of a concerted effort.

One goal of the increased publicity may be to force the Chinese government to make its claims in the South China Sea more explicit. If U.S. vessels or aircraft enter a 12 nautical mile radius of Chinese-claimed features (or credibly threaten to do so), Chinese officials might be forced to resort to the UN Convention on the Law of the Sea (UNCLOS) to make their objection. If this is the U.S. strategy, however, it is a risky one. Chinese officials have spent years cultivating strategic ambiguity about whether their claims emanate from sovereignty over disputed features and the associated maritime entitlements under UNCLOS, or whether some other form of rights within the “nine-dashed line” are the source of Chinese claims. If the Chinese government backs away from the broader “nine-dashed line” claim, they risk the ire of a public highly sensitive to sovereignty and territorial slights. Regardless, there is little reason to believe the recent actions will deter China from declaring an air defense identification zone (ADIZ) like the one it declared in the East China Sea in late 2013. U.S. policy makers may have calculated that such a declaration is coming one way or another.

Some commentators both inside China and elsewhere have framed this set of U.S. moves as highly provocative and dangerous. Certainly these moves come with risk, but the U.S. government is far from alone in taking actions that produce risk. It is important to remember, however, that the recent increase in publicity is not the same thing as an increase in provocative moves. For months, U.S. officials have observed that the situation was becoming more dangerous in the South China Sea, but with scant detail. Now, U.S. officials are making a highly public case—just like we’re seeing with cybersecurity and computer-enabled theft of commercial secrets…

NAME AND SHAME
Chinese professors charged with stealing trade secrets to benefit China

From the Justice Department: “‘According to the charges in the indictment, the defendants leveraged their access to and knowledge of sensitive U.S. technologies to illegally obtain and share U.S. trade secrets with the PRC for economic advantage,’ said Assistant Attorney General Carlin. … [Regarding the allegedly stolen technology:] Apart from consumer applications, FBAR technology has numerous applications for a variety of military and defense communications technologies.” The detailed DOJ release reports that Tianjin University was a key beneficiary of the alleged theft. Tianjin University denies this.

ANALYSIS: As above in the South China Sea, this represents a “going public” of U.S. concerns with China. It is a more purely economic move than the earlier indictment of Chinese military service members for online theft—and it’s immediately more concrete, since a Tianjin University professor was arrested. The role of the National Security Division within DOJ is interesting, as is the apparent “dual use” nature of the technology concerned.

CAMPAIGN 2016
Report on Chinese investment in the U.S. by Congressional district estimates 80k Americans work for Chinese firms

The Rhodium Group-National Committee on U.S.–China Relations report is available here, and it will be a useful handbook for those supporting stable ties with China through the U.S. election season.

ALLIES
Australia to host advanced U.S. bombers, despite PM’s initial stance that a U.S. official ‘misspoke’

Link here. This was a rare hiccup in the very real “united front”-style series of moves the U.S. government has been staging of late in pursuit of the “rebalance” policy.

ABOUT U.S.–CHINA WEEK

U.S.–China Week is a weekly news and analysis brief that covers important developments in U.S.–China relations and features especially insightful or influential new policy analysis.

Graham Webster is a research scholar and senior fellow at Yale Law School’s China Center, where he focuses on U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. A full bio is available here.

Disclaimer: Opinions expressed here are my own (and I reserve the right to change my mind).

Subscription to U.S.–China Week by clicking here or e-mailing me is free and open to all, and an archive of past editions appears at my long-running website on U.S.–East Asia politics, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to mail@gwbstr.com.

Posted in Newsletter

U.S.–China Week: Kerry and U.S. talk tough, play nice in Beijing; Dark mood in Washington; Chinese cash under scrutiny (Issue 5, 2015.05.18)

Welcome to Issue 5 of U.S.–China Week. There was a lot of news and some important commentary over the past week, so I’ll get right to it. But first, as always: Please encourage interested friends and colleagues to subscribe to the list. You can find a copy of this issue at Transpacifica.net. That’s the best link to share on social media. Please send your comments, quibbles, and suggestions to mail@gwbstr.com.

TALKING TOUGH
Potential military moves in South China Sea and official statements show U.S. on offensive before Kerry’s Beijing visit

During the run-up to a two-day China visit by Secretary of State John Kerry, anonymous U.S. officials told the WSJ the U.S. military is considering sending planes and ships within 12 nautical miles of artificial islands under construction by China in the South China Sea. A Chinese spokesperson was “deeply concerned” and demanded clarification, and Xinhua later reported that Kerry said the initial reports “do not reflect any political decision by the U.S. government.” Meanwhile an advanced U.S. Navy ship conducted the first U.S. patrol of its kind near the disputed Spratly Islands, part of what one senior officer called “the new normal” and during which it was tailed by a PLA Navy ship. Top State Department and DoD officials also testified in Congress, laying out strong and detailed concerns about China’s maritime activities.

ANALYSIS: The U.S. government’s intentions here might be partially illuminated by an anonymous official’s statement that Kerry would leave China “in absolutely no doubt” about U.S. commitment to freedom of navigation in the South China Sea. The White House generally wants to make sure U.S. officials visiting China appear to be on the offensive, lest the phrase “kowtowing to Beijing” appear in the news pages. But this is not all about appearance. The Obama administration is clearly grasping for a harder line on Chinese ambitions in the South China Sea. There is a perception that China is likely to face a tougher United States under the next president, and the Obama team may believe the Chinese government sought to take advantage of a perceived opportunity.

MAKE NICE FOR THE CAMERAS
Xi and Kerry are all smiles as preparations for S&ED and September’s state visit emphasized

President Xi Jinping told Kerry in Beijing the “China-U.S. relationship has remained stable on the whole” despite testy exchanges between the governments over the South China Sea. (Kerry’s corresponding remarks simply thanked Xi for his hospitality.) The Chinese readout of their meeting emphasized areas of progress and stuck to the “new model of major-country relationship” phrase, which Foreign Minister Wang Yi lead with in the joint “press availability,” during which Kerry dodged a question about the possible military patrols and Wang answered it, reiterating the “determination of the Chinese side to safeguard our own sovereignty and territorial integrity.”

ANALYSIS: Both governments have a strong interest in maintaining amicable contact through next month’s Strategic & Economic Dialogue (S&ED), September’s summit, and the Paris climate talks. The U.S. government is doubtless conscious of Chinese desires for a smooth state visit, giving them some room to pressure the Chinese government on various issues. But if they think military threats are the way to push on the South China Sea, I fear we’re in for some ugly confrontations.

GROPING FOR REALITY
Lampton: Tipping point is near in U.S.–China ties; U.S. should rethink focus on ‘primacy’

SAIS scholar David M. Lampton argues: “America has to rethink its objective ofprimacy and China must recalibrate its own sense of strength and what that entitles it to. Americans must find ways to accommodate China’s rightful desire for greater voice in international affairs and institutions such as the IMF, and China should improve relations with its neighbors—reassure them. The words ‘accommodation’ or ‘compromise’ in either China or the United States should not be dirty words. Both nations must be more realistic about their own power, what constitutes power, and how it can be exercised in a world in which a central reality is interdependence. Sino-American interdependence needs to be systematically reinforced, and joint security and economic institutions must be created. Balance and stability in Asia should be our objective, not the primacy of either side.”

ANALYSIS: Lampton joins the burgeoning debate over the U.S. approach to China with a strong, realistic, and concerned account. He stands in contrast to politically-inflected arguments, such as this one from Aaron Friedberg, who declares “China” a “sleeper issue” in the 2016 election and proceeds to blame Obama and Hillary Clinton.

DOLDRUMS
Schell takes the temperature of the U.S. China policy community, and finds ‘mutual coolness’

Asia Society’s Orville Schell has the best account so far of the dark “sentiment” and terrible “mood” among people who work on U.S. policy toward China. In the macro political environment, he observes that “there is presently no significant core constituency in America still well-disposed towards China. Whereas U.S. businessmen once comprised a core of support for no-fault relations, now some 60% of global CEOs polled by the American Chamber of Commerce in 2014 reported they felt less welcome in China than previously.” On the micro level, he writes, “As the head of one prominent U.S. academic China center ruefully put it, ‘It is strangely the people who are closest to China who feel most alienated.’ If this sourness of attitude remains unattended, it will inevitably constrain the U.S. and China not only from being able to collaborate on critical global problems now, but from building a more workable future.”

ANALYSIS: Schell’s essay underlines the often overlooked fact that more contact between the U.S. and Chinese peoples, governments, and economies is not enough. To produce dividends of peace and prosperity, that contact has to be largely positive and genuinely cooperative. My own discussions in Washington and with China-based Americans support Schell’s diagnosis, but a remedy is elusive.

CHINESE MONEY ABROAD
Negative U.S. advice about Chinese energy investment reported, and retracted; Rich Chinese in U.S. under scrutiny

A U.S. executive in the liquefied natural gas (LNG) industry told Reuters: “‘We were advised by the [Department of Energy] to be careful who our customers were, because this is very political,’ he said, calling the prospect of Chinese interest in a major US export project as ‘a political hot potato we couldn’t take the risk on.'” The executive later said he “misspoke.” // Meanwhile, the NYT tracked the luxurious lifestyles of Chinese corruption suspects in the United States and covered the cash-for-green card EB-5 program, and the WSJ told the story of a Chinese fugitive who partially owns a Florida shopping mall.

ANALYSIS: The story about warnings against LNG deals with China is worth following-up on. This is the sort of informal barrier to trade that Chinese officials and businesspeople bring up, often to be dismissed by Americans who correctly claim the government’s formal security review process is narrow. // The stories of rich Chinese in the United States should remind both governments that our peoples and economies are enmeshed and not neatly contained by borders.

ABOUT U.S.–CHINA WEEK

U.S.–China Week is a weekly news and analysis brief that covers important developments in U.S.–China relations and features especially insightful or influential new policy analysis.

Graham Webster is a research scholar and senior fellow at Yale Law School’s China Center, where he focuses on U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. A full bio is available here.

Disclaimer: Opinions expressed here are my own (and I reserve the right to change my mind).

Subscription to U.S.–China Week by clicking here or e-mailing me is free and open to all, and an archive of past editions appears at my long-running website on U.S.–East Asia politics, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to mail@gwbstr.com.

Posted in Newsletter

U.S.–China Week: Pushing for a free China, dodging U.S. laws, talking past each other in cyberspace, PLA developments (Issue 4, 2015.05.11)

President Xi Jinping may have spent the week touting cooperation with Russia, but an intensive period of U.S.–China activity is approaching. The State Departmentannounced today the Strategic & Economic Dialogue (S&ED) will take place late next month in Washington, and Secretary of State John Kerry is traveling to Beijing to prepare for S&ED and Xi’s September state visit with President Barack Obama. We can expect skeptical coverage, like this from the Washington Post today, to dominate U.S. media while officials put on a friendly face.

As always: Please encourage interested friends and colleagues to subscribe to the list. You can find a copy of this issue at Transpacifica.net. That’s the best link to share on social media. Please send your comments, quibbles, and suggestions tomail@gwbstr.com.

LAW AND THE MARKET
Chinese firms, with help of their government, avoid enforcement of significant U.S. laws

A new report by a U.S. Congressional commission analyst neatly outlines several ways the U.S. legal system is frustrated by the “extraterritoriality” of Chinese firms operating in the U.S. market and financial system. “Chinese financial institutions can effectively operate behind a firewall that keeps them largely immune from the jurisdiction of U.S. courts and regulatory agencies, leaving U.S. partners, competitors, and investors vulnerable. … Multiple examples already exist of China-based financial institutions arguing that their complex multinational corporate structures and the need to comply with Chinese law, especially state and banking secrecy laws, makes them immune to U.S. jurisdiction.” The report offers policy suggestions, including “legislation definitively declaring that China-based firms which list on or participate in U.S. financial markets are subject to the jurisdiction of U.S. courts would eliminate any ambiguities about this jurisdiction.”

ANALYSIS: The author, Kevin Rosier, argues hopes that Chinese business presence would have “positive spillover effects on the behavior of Chinese firms and rule of law in China” have not been fulfilled. I would propose that it’s possible there could both be positive effects and significant difficulties on the U.S. side. The report provides a quick, clear vision of the difficulties.

CAMPAIGN 2016
A case for the U.S. government pushing China toward democracy

Two high-level George W. Bush administration officials have published a must-read argument for a major shift in U.S. policy toward China. Dan Blumenthal and William Inboden argue that economic development has not led to democratization in China, and that the U.S. government should add a “freedom prong” to its longstanding two-prong policy of engagement and hedging. “Just as the United States should protect its security and economic interests in Asia, the grand aim of U.S. strategy should be the measured yet persistent push for a free and democratic China. … A free and democratic China would not only tame the increasingly dangerous strategic rivalry but also change the world: The Chinese people are enterprising and resilient, and more freedom in China would unleash their potential for innovation, commerce, and creativity.”

ANALYSIS: There is of course the question of how the U.S. government might realistically push for democracy, but this essay takes that challenge seriously. Agree or disagree, this argument should be taken seriously as part of a growing toolbox for Republican presidential candidates and even for Hillary Clinton. Significantly, Blumenthal and Inboden argue that U.S. businesses are more likely to favor an aggressive human rights approach given their frustration with China in recent years.

CHINA’S MILITARY
U.S. report sees significant developments in China’s military efforts

The U.S. Department of Defense this week released its annual report to Congress on Chinese military modernization, concluding that the United States risks losing its technological edge, that China is using “low-intensity coercion” in the South China Sea, and that cybersecurity and space are among key areas to watch. The report is a valuable reference, and Andrew Erickson has written a nice summary emphasizing that China has both new strengths and substantial persistent weaknesses in the military sphere. A Chinese Defense Ministry spokesperson decried the report for hyping the “China threat” concept.

ANALYSIS: For something that came out of the Pentagon’s acronym constellation, this is an uncommonly easy to read piece of work. It also highlights U.S. and Chinese efforts to expand military-to-military ties, something hawks on Capitol Hill have been calling into question. These ties are low-cost and high-value, and should be expanded, not stopped. The two sides also need to seriously engage on cybersecurity norms and confidence-building measures.

CYBERSECURITY
U.S. pushes China to investigate GitHub attack; China’s ‘cyberspace sovereignty’ concept appears in draft law

Asked about the Chinese so-called “Great Cannon” that redirected foreign Internet traffic heading for Baidu in a denial of service attack against the software developing platform GitHub, a State Department spokesperson said: “The cyber attack manipulated international web traffic intended for one of China’s biggest web services companies and turned it into malicious traffic directed at U.S. sites. We have asked Chinese authorities to investigate this activity and provide us with the results of their investigation.” Meanwhile, a draft National Security Law published by the Chinese government enshrines “cyberspace sovereignty” as a national security priority. A crowdsourced English translation is here.

ANALYSIS: These developments are consistent with both governments’ recent approaches. For the U.S. government, faced with unsatisfactory responses from the Chinese government, numerous relatively minor events are opportunities to push counterparts toward engagement. (I doubt this will work, but it’s better than most alternatives.) For China’s government, codifying and emphasizing the right to exclude foreign influences (including online) is an overarching trend. Despite a reported U.S. push at the UN for cyberspace norms, we see China and the United States essentially speaking different languages about the Internet.

BLAME GAME
Everyone says everyone’s at fault in the South China Sea

After a weeks-long campaign by U.S. and other media and officials raising alarm at China’s island construction in the South China Sea, China’s government has accusedthe Philippines of breaking the Declaration on the Conduct of Parties over its own construction efforts. An unnamed Pentagon official told Reuters, “We do not support South China Sea land reclamation efforts by any party. … However, the pace and scale of China’s land reclamation in recent years dwarfs that of any other claimant. China has expanded the acreage on outposts it occupies by some 400 times.” Reuters also reported on Vietnam’s construction, and China’s spokesperson claimed China’s larger efforts are “should be commensurate with its responsibilities and obligations as a major country.” And just for fun, sources told Reuters Japan and the Philippines would hold their first joint naval exercise this month in the South China Sea.

ANALYSIS: The torrent of accusations and the thick tangle of amity and confrontation between states in the region would be amusing if it weren’t so dangerous. The more these countries have military and civilian ships and aircraft operating in close proximity and amidst bitter recriminations, the more likely we are to see a dangerous military confrontation that would almost certainly involve the United States and China at some level.

ABOUT U.S.–CHINA WEEK

U.S.–China Week is a weekly news and analysis brief that covers important developments in U.S.–China relations and features especially insightful or influential new policy analysis.

Graham Webster is a research scholar and senior fellow at Yale Law School’s China Center, where he focuses on U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. A full bio is available here.

Disclaimer: Opinions expressed here are my own (and I reserve the right to change my mind).

Subscription to U.S.–China Week by clicking here or e-mailing me is free and open to all, and an archive of past editions appears at my long-running website on U.S.–East Asia politics, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to mail@gwbstr.com.

Posted in Newsletter

U.S.–China Week Issue 3: Big trade speech, China’s Defense Ministry speaks, bribery and business, South China Sea jockeying (2015.05.04)

Japanese Prime Minister Shinzo Abe just finished a weeklong trip to the United States, and although China’s government responded at various times to U.S.–Japan statements and Abe’s speech in Congress, Japan was still a background issue for this week’s U.S.–China news. The U.S. media will have several more chances this year to focus on East Asia, including U.S. visits by South Korean President Park Geun-Hye and Chinese President Xi Jinping, and Obama’s trip (confirmed here) to the APEC summit in Manila this November.

As always: Please encourage interested friends and colleagues to subscribe to the list. You can find a copy of this issue at Transpacifica.net. That’s the best link to share on social media. Please send your comments, quibbles, and suggestions tomail@gwbstr.com.

INVESTMENT AND TRADE
U.S. speech on China economic ties suggests bilateral investment treaty prospects still uncertain

U.S. Trade Representative Michael Froman gave an important speech on China trade issues that’s worth reading in full. Froman says China’s “suspension” of banking and counterterrorism rules that affect U.S. tech firms “may be more of a pause than a resolution” and the proof will be “whether our companies are beginning to see orders for their products flow again.” He said bilateral investment treaty (BIT) negotiations are entering the negative list phase soon, and that “a negative list that echoes the lists of the Shanghai Free Trade Zone or the most recent revision of China’s foreign investment catalog would be a major disappointment and a departure from China’s stated ambition to use the BIT as a vehicle for economic reform and opening.” Meanwhile, Obama is still busy trying to sell the Trans-Pacific Partnership (TPP) to a skeptical Congress, and he’s using the purported threat of Chinese leadership as a motivator. Bob Davis in the WSJ has a good overview of the differing U.S. and Chinese approaches to trade, but basically the Chinese government seems less concerned about TPP than before.

ANALYSIS: Froman’s remarks about the BIT negative list are important. Top Chinese officials say they want the BIT negotiations to assist in reforming the Chinese economy, but strong domestic political forces make it hard for them to come to the U.S. side with something USTR and Congress would work with. Domestic limitations on both sides are the greatest challenge to the BIT.

WORLD ECONOMY, TWO SYSTEMS
Wall Street banks fighting U.S. authorities over ‘aggressive’ anti-bribery stance on China princeling hires

WSJ reports that a group of U.S. “banks have accused the government of overreaching by threatening to criminalize standard business practices in some countries.” J.P. Morgan’s China hires, including the son of the Chinese commerce minister, are the subject of a key investigation now joined by the New York Fed. U.S. law “bans U.S. companies from giving anything of value to a foreign official to gain business or an unfair advantage. Both sides agree that an executive of a state-owned company is considered a government official, but there is dispute over what conduct is considered legally corrupt in cultures in which it is common to hire well-connected individuals.”

ANALYSIS: Surely there is no culture in the United States of hiring well-connected individuals! But seriously, just because someone is well connected doesn’t mean they’re not qualified. Still, this story represents an important tug-of-war between capital and civil regulators. If the U.S. government wants to preach a rules-based international system, it should consistently enforce its own rules—including, by the way, on Chinese firms listed in the United States.

SOUTH CHINA SEA
Nice try? U.S. seems to reject Chinese claim that new island facilities could be used by all, provide public goods

China’s Navy chief told his U.S counterpart: “China welcomes the international organizations, the U.S. and relevant countries to use China’s civilian facilities on the islands and reefs in the South China Sea to carry out cooperation on humanitarian assistance and disaster relief operations, when conditions are ripe,” according to the Ministry of Defense. A U.S. State Department spokesman said: “Well, building facilities on reclaimed land in disputed areas will not contribute to peace and stability in the region,” adding that he was “not aware” of an invitation for the United States to use them.

ANALYSIS: It might have been more useful if the U.S. government’s rebuff came with a statement that cooperation in the area would be more realistic if a multilateral plan had preceded construction. Relatedly: Reports that Japan and the United States might engage in joint patrols in the South China Sea seem unlikely to bear out. These could be leaks by ambitious members of Japan’s military, but are unnecessarily inflammatory in any case.

THE UNDER-USED PODIUM
China’s Defense Ministry spokesman on U.S.–Japan, U.S.–Philippines, U.S. cybersecurity policy, Medeiros, and more

China’s Ministry of Defense only recently implemented a monthly (or so) press briefing. This week’s briefing made a lot of news. Spokesman Geng Yansheng criticized the U.S. and Japan program to “expand their defense cooperation to the whole world”; said U.S.–Philippine military exercises “create tensions in the region”; and warned the new U.S. Cyber Strategy “will further escalate tensions and trigger an arms race in cyber space.” He also directly responded to National Security Council Asia chief Evan Medeiros’ statement on Japan’s ties in the region that “what we want is for history to be history.” Geng said: “History should not be forgotten, justice needs to be upheld, and peace needs to be defended. The remarks of relevant U.S. people are wrong. If we do not face up to history, the same error might be recommitted and historical tragedies might be repeated.”

ANALYSIS: China’s government might have a better time getting its perspective out if these briefings were more frequent. Keeping them monthly, on the other hand, allows them to prepare to answer only the questions they really want to. I’m probably closer to Geng on this (narrow) history question, but Medeiros put it better later: “let history be history, but be mindful of it.”

BAD OPTIONS
Chinese analysis: China–U.S. military competition in the Pacific a lose-lose, but plenty of possible smaller conflicts

Large-scale competition between China and the United States in the Pacific reminiscent of that between Japan and the United States in the mid-20th century would mean everyone loses, according to an analysis on Sina’s military channel. (There is a pretty good English version.) Nonetheless, the article goes through potential flashpoints and outlines the challenges Chinese forces would likely face. Those flashpoints include Taiwan, the South China Sea, the Senkaku/Diaoyu Islands, a North Korea contingency, and island defense in the South China Sea. The article also summarizes “counter-intervention” (反介入) and island chain tactical issues.

ANALYSIS: The writer is very clear that U.S.–China differences are relatively limited, and the strategic landscape is very different, compared with what here is deemed the natural analog, the U.S.–Japan conflict in World War II. What’s interesting is an apparent sense that China still might be able to wring out some small victories (with significant difficulty) while avoiding escalation.

ABOUT U.S.–CHINA WEEK

U.S.–China Week is a weekly news and analysis brief that covers important developments in U.S.–China relations and features especially insightful or influential new policy analysis.

Graham Webster is a research scholar and senior fellow at Yale Law School’s China Center, where he focuses on U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. A full bio is available here.

Disclaimer: Opinions expressed here are my own (and I reserve the right to change my mind).

Subscription to U.S.–China Week by clicking here or e-mailing me is free and open to all, and an archive of past editions appears at my long-running website on U.S.–East Asia politics, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to mail@gwbstr.com.

Posted in Newsletter

U.S.–China Week Issue 2: Abe in U.S., cyber strategy, realism vs. reality, and investment moves (2015.04.27)

Much of the action in U.S.–China relations this week comes in connection to the ongoing U.S. visit by Japanese Prime Minister Shinzo Abe, during which the United States and Japan have already released new defense guidelines (joint statement; full text) and Abe is expected to address a joint session of Congress. From military affairs to trade negotiations and Abe’s stance on history, this is an excellent reminder that no international relationship is exclusively bilateral—least of all the one between China and the United States.

As always: Please encourage interested friends and colleagues to subscribe to the list. (A hearty welcome to more than 50 distinguished new subscribers since last week!) You can find a copy of this issue at Transpacifica.net. That’s the best link to share on social media. Please send your comments, quibbles, and suggestions to mail@gwbstr.com.

TRIANGULAR TIES
Pomp and pragmatism as Abe visits U.S.: Nerves over history as alliance retools for China’s rise and global security

If Japanese Prime Minister Shinzo Abe read the U.S. press before arriving Sunday, he might have expected a cool welcome. In a typical statement, a NYT editorialdeclared, “the success of the visit also depends on whether and how honestly Mr. Abe confronts Japan’s wartime history.” FT writes: “Washington should not back him under all circumstances. That is especially true when it comes to relations with China.” Abe met Chinese President Xi Jinping Wednesday, perhaps signaling a fragile “new positivity,” and Chinese reactions to the new U.S.–Japan defense guidelines are yet to emerge. (Adam Liff has written an excellent background brief on the guidelines.)

ANALYSIS: U.S. wariness of Abe is not just about history. Long before the Obama team went to battle with Congress over the Trans-Pacific Partnership, they started a tough negotiation with Japan. Many U.S. policymakers support Abe, though, because he is willing to move Japan toward sharing more of the regional security burden. Both governments need to manage their actions and statements to live up to the ideal of a stability-promoting alliance. Real stability would necessarily involve understanding and cooperation among China, Japan, and the United States.

SOUTH CHINA SEA
ASEAN warns island building ‘may undermine peace'; Japan law may allow it to supply U.S. ships in the region

AFP reports that a statement from an Association of Southeast Asian Nations (ASEAN) summit will avoid mentioning China while declaring: “We share the serious concerns expressed by some leaders on the land reclamation being undertaken in the South China Sea (SCS), which has eroded trust and confidence and may undermine peace, security and stability.” // Meanwhile Reuters reports that a legislative process under way in Japan may lift restrictions on Japan’s military activities, allowing it to resupply U.S. forces anywhere, “should Tokyo judge its national security to be at stake.”

ANALYSIS: The ASEAN statement (under chair Malaysia) is a rare direct jab at specific Chinese actions. Even though China was not named, and other states have engaged in land reclamation in the area, China is behind most or all current efforts and is the clear target here. // As time passes, expect Japan to play a greater role in regional security. Extreme steps such as Japanese patrols in what China describes as its exclusive economic zone (EEZ), however, would be white-hot and would expose the United States to considerable risk. U.S. forces nonetheless clearly intend to remain present in the SCS and are seeking renewed access to Philippine bases.

BILATERAL INVESTMENT
China opens a few more sectors, introduces national security rules in free trade zones

Chinese authorities cut the “negative list” of areas closed to foreign investment from 139 to 122 in the country’s four pilot free trade zones (FTZs). The list, which still restricts investment in numerous major industries, is a potential precursor to a similar list in negotiations for a U.S.–China bilateral investment treaty (BIT). At the same time, authorities introduced a new national security review for inbound investment in the FTZs, prompting comparisons to the U.S. CFIUS system. That system might have been the target of Chinese Finance Minister Lou Jiwei’s reported remark that he was “uncomfortable” with a U.S. negative list. (There is reason to believe that statement was distorted or inaccurately reported.)

ANALYSIS: The current FTZ “negative list” is nowhere near as short as what the United States would want in a BIT, and ambiguities about the process and scope of security reviews may be a hurdle. But in a negative list system, where investment is open unless specifically restricted, it makes sense to build a method to detect unanticipated security risks.

CYBERSECURITY
U.S. publishes new ‘cyber strategy,’ emphasizing deterrence and retaliation potential

U.S. Defense Secretary Ash Carter announced a new U.S. “cyber strategy” with significant implications for China. The strategy names China alongside Russia, Iran, and North Korea under “key cyber threats” and redoubles the U.S. government emphasis on intellectual property theft. It asserts that the U.S. indictment of five Chinese military members was partially meant “to deter China from conducting future cyber espionage.” In all, the document stresses resilience and the potential use of cyberweapons for retaliation while, argues Greg Austin, underplaying the strategic and diplomatic challenge of computer-based weaponry.

ANALYSIS: U.S. and Chinese defense officials each have access to significant tools to disrupt computer systems in ways that pose a threat to military and civilian life. For bilateral strategic stability, these governments need a way to understand and reduce the risks of misattribution and escalation in a cybersecurity emergency. Deterrence would be a part of this, but much more needs to be done and little progress is evident.

REALISM VS. REALITY
Swaine makes pragmatic case for a move away from U.S. predominance in the Asia-Pacific

Responding to Andrew Krepinevich’s case for generally encircling China with allied forces, discussed here in February, Michael Swaine writes in Foreign Affairs: “Chinese leaders today are not trying to carve out an exclusionary sphere of influence, especially in hard-power terms; they are trying to reduce their considerable vulnerability and increase their political, diplomatic, and economic leverage in their own backyard. … [This] does not necessarily threaten vital U.S. or allied interests, and it can and should be met with understanding rather than defensive aggressiveness.” He also writes: “Trying to sustain [U.S.] predominance, therefore, is actually the quickest route to instability.”

ANALYSIS: Swaine outlines the strategic reality implied by China’s growing capabilities and limited U.S. resources. It’s a long essay, but one key point is critical: “It is inconceivable that Beijing will accept U.S. predominance in perpetuity and that it will grant the United States complete freedom of action in the Pacific and recognize its ability to prevail militarily in a potential conflict.”

ABOUT U.S.–CHINA WEEK

U.S.–China Week is a weekly news and analysis brief that covers important developments in U.S.–China relations and features especially insightful or influential new policy analysis.

Graham Webster is a research scholar and senior fellow at Yale Law School’s China Center, where he focuses on U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. A full bio is available here.

Disclaimer: Opinions expressed here are my own (and I reserve the right to change my mind).

Subscription to U.S.–China Week by clicking here or e-mailing me is free and open to all, and an archive of past editions appears at my long-running website on U.S.–East Asia politics, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to mail@gwbstr.com.

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Since 2006, Transpacifica has been a blog, and collection of resources on East Asian politics and international relations in the Asia-Pacific, with a special focus on China, Japan, and the United States. Transpacifica is edited and primarily written by Graham Webster, Research Scholar and Senior Fellow for U.S.–China Relations, Yale Law School China Center. Get in touch, or follow Graham on Twitter.

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