Category Archives: U.S.–China Week

U.S.–China Week: Discontent at PACOM? Carter skips China, censorship as trade barrier, Blair’s U.S.–Japan China strategy (2016.04.11)

Welcome to issue 47 of U.S.–China Week. As always: Please encourage friends and colleagues to subscribe to U.S.–China Week. Here is the web version of this issue, ideal for sharing on social media. And please send your comments, quibbles, and suggestions to [email protected].

SOUTH CHINA SEA
Civil-military tension on South China Sea creeps into public view; More ‘assertive’ option seemingly ill-fit to challenge

The Navy Times made a big splash with a story that, based heavily on anonymous quotes, claimed the White House had imposed a “gag order” on U.S. Pacific Command (PACOM) personnel over South China Sea issues. That story framed PACOM Commander Harry Harris as “arguing behind closed doors for a more confrontational approach to counter and reverse China’s strategic gains” in the area, asserting that his appeals “have met resistance from the White House at nearly every turn.” The measures reportedly proposed by Harris include conduct near Chinese installations that would be inconsistent with “innocent passage” rules and therefore demonstrate different opinions from those expressed through earlier “freedom of navigation operations” (FONOPS). The article directly referenced a National Security Council memo that supposedly asked military commanders to avoid commenting on the South China Sea before President Xi Jinping’s recent visit to Washington. It also suggests PACOM can independently order patrols in the region, such as a recent visit by a U.S. aircraft carrier, but FONOPS require White House authorization. / Both Harris and the Pentagon denied any “gag order” had been issued, with Harris saying “any assertion that there is a disconnect between U.S. Pacific Command and the White House is simply not true.” Harris had previously asserted that “China seeks hegemony in East Asia. Simple as that.” / Meanwhile a U.S. Navy officer was charged with [may face charges of]* espionage, allegedly passing secrets to China [and Taiwan], according to reports. The officer reportedly had experience as an intelligence specialist on U.S. spy planes.

[*A NYT story was corrected to indicate the charges weren’t yet filed. It appears I missed the detail of the meaning of an Article 32 hearing. WaPo now adds Taiwan, with more details in NYT. I regret the distortion in any case.]

ANALYSIS: Notwithstanding Harris’ denial of discord, it is hard to disagree with the (unsourced) Navy Times remark that Harris and PACOM “have been waging a persistent campaign in public and in private over the past several months” to raise alarm on the South China Sea. What’s remarkable about the story is the contrast between the public, heated frustration with supposed White House reticence, and the really modest nature of what is supposedly being proposed—a FONOP that is not undertaken using “innocent passage” procedures. Such an operation would be a slightly more assertive move but by no means a game changer, and there is no reason at all to think it would stop China’s outpost construction efforts. The public discord undermines any “resolve” U.S. officials want to signal, and nowhere in this story does one get the impression the U.S. government has a clear objective in the region—let alone tactics matched to such an objective. What a mess.

CONFIDENCE BUILDING
Sec. Carter postpones already announced China stop, keeps visits to Philippines and India

Secretary of Defense Ash Carter postponed (or perhaps cancelled) an announced visit to China on his present Asia trip, which now includes stops in the Philippines and India. Carter had said publicly he accepted a Chinese invitation and looked forward “to a visit this spring.” U.S. and Chinese sources told reporters this was a postponement. A Global Times commentary (en/zh) pointed out that U.S.–China military ties sometimes pause over politics, but “it is the U.S. that is more active in resuming and improving communications.” With the China stop off the docket, Carter is scheduled to visit one of the Philippine installations where, under a new deal, the U.S. military will station some forces. / Speaking about the THAAD advanced missile defense system under discussion for deployment in South Korea, a move the Chinese government firmly opposes, Carter reportedly said, “It’s going to happen.

ANALYSIS: Without further details, it is hard to believe Carter’s canceled China stop was merely a scheduling problem. The reported lack of any deliverables to release at such a meeting is a possible reason, but it is hard to believe they couldn’t manufacture something. Perhaps the U.S. side wants to save the trip for the announcement of some next step in confidence building measures. But by failing to credibly dispel speculation that Carter skipped the visit in disapproval of Chinese conduct, the public signal is that the U.S. government is using a pause in military-to-military dialogue to penalize China. This is a precedent U.S. officials usually would want to avoid, on the principle that mil-mil ties should stay strong, especially during times of friction, so that any potential incident is prevented from escalating into a broader crisis.

CYBERSPACE
U.S. puts Chinese censorship on list of trade barriers

The New York Times reported that the U.S. government for the first time included China’s system of Internet blocks, known as the Great Firewall, in a list of trade barriers. “Over the past decade, China’s filtering of cross-border Internet traffic has posed a significant burden to foreign suppliers, hurting both Internet sites themselves, and users who often depend on them for their businesses,” a U.S. Trade Representative report stated. “Outright blocking of websites appears to have worsened over the past year… Much of the blocking appears arbitrary.” The report’s 15-page section on China outlines many other “priority issues,” including, for instance, “secure and controllable ICT policies,”  “indigenous innovation,” and “theatrical film distribution.” Only India and Russia merited longer sections in this official report on “foreign trade barriers.” / Meanwhile, Adm. Michael Rogers, commander of U.S. Cyber Command and director of the National Security Agency,said the “jury is still out” regarding China’s follow-through on the September 2015statements regarding government support for “cyber-enabled theft of intellectual property.”

ANALYSIS: As some have noted, including a single paragraph in a 474-page litany of trade grievances is a moderate or low-key way to raise an issue. But as NYT reporter Paul Mozur put it in a tweet they should have made the headline, “Most have thunk it for a while, but the US gov’t finally out and says it.” The question is whether there will be any follow-through in multilateral trade forums regarding this alleged “significant burden.”

TRANSPACIFIC TRIANGLE
Blair outlines ‘An Updated U.S.–Japan Strategy for China’ centered on ‘assertive engagement’

Dennis Blair, who served as director of national intelligence and commander of PACOM, last month published a detailed vision for the U.S.–Japan alliance and its approach to China. While much of the report is devoted to charting the uncertainty inherent in predicting the future of China’s development and its government’s security goals, Blair offers a policy approach with an eye on the period through 2030. He argues today’s China requires a new approach, because “China has simply outgrown the boundaries of the current American and Japanese policies of cooperation and deterrence.” Blair rejects both an “economic and military buildup” and “accommodation,” instead proposing “assertive engagement.” That approach involves: better coordinating U.S. and Japanese strategy toward China; strengthening both countries’ economies; “realistic economic relations with China” (“It is unrealistic to think that the United States and Japan can force China to accept a global system developed largely without China’s input.”); prevailing against China and others who advocate “cyber sovereignty” in Internet governance; stronger alliance military capabilities; response to China in the South China Sea “at a level below the use of military force”; and other points.

ANALYSIS: Blair’s report is refreshingly honest about the uncertainty of China’s future, about risks of escalatory spirals, and about the unreality of proposals to simply accommodate China’s objectives. “Assertive engagement” is no grand innovation in strategic thinking or wordsmithing, but this report is a must-read for those focusing on U.S. China policy, because it very properly puts policy choices in the context of the U.S.–Japan alliance and broader regional relationships. Still, some recommendations are more realistic than others. Blair advocates for coordination between U.S. and Japanese defense messaging on China. As we see in the first item above, the U.S. government can hardly coordinate messaging between PACOM and the White House.

#USChinaWeek1966 <— follow this hashtag on Twitter for more
Progressive Republican group Ripon Society urges GOP to ‘fill a leadership vacuum’ in U.S. China policy

A report suggested the Republican Party should advocate a new approach to China, “continuing to ‘contain’ her militarily while also ‘opening wide an alternative realm of contact.'” The GOP should fill the gap left by ossified Johnson administration policy, the report argued, including “dropping overt opposition to Chinese admission to the United Nations.” The report advocated extending a cautious open hand while acknowledging that it would be “foolish to expect an overnight change in Chinese opinion once these initiatives are taken.”

The report came out of the Ripon Society, a group of mostly young Republicans with a progressive bent that rose to prominence (so says then-Harvard undergrad and now long-time Washington Post columnist Robert J. Samuelson in a 1965 Harvard Crimson article) in opposition to a divisive Republican presidential candidate in 1964—Sen. Barry Goldwater. NYT quotes Ripon’s purposes as follows: “As members of a new generation of Americans and of Republicans we can no longer be silent while vital issues are discussed in a manner which is narrow-minded and unimaginative.” [If anyone out there knows where I might get a copy of this report, please drop me a line! -gw]

(Source: The New York Times. This entry is part of a new feature of U.S.–China Week, following U.S.–China relations as they developed in another era of change and uncertainty, 50 years ago.)

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 senior research scholar, lecturer, and senior fellow of the Paul Tsai China Center at Yale Law School, where he specializes in U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. His website is gwbstr.com.

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 East Asia and the United States, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to [email protected].

U.S.–China Week: Obama and Xi’s mixed signals, South China Sea tangles, Anbang bids and balks (2016.04.04)

Welcome to issue 46 of U.S.–China Week. This edition focuses on the meeting between the top leaders of the United States and China, with a few other matters addressed in brief.

As always: Please encourage friends and colleagues to subscribe to U.S.–China Week. Here is the web version of this issue, ideal for sharing on social media. And please send your comments, quibbles, and suggestions to [email protected].

OBAMA–XI MEETING
Obama and Xi meet in Washington, revealing little new progress but also little rancor

President Barack Obama and President Xi Jinping held a bilateral meeting (flankedby numerous aides) on the sidelines of the Nuclear Security Summit in Washington. Before the meeting, top White House Asia adviser Dan Kritenbrink said they would discuss North Korea, human rights, cyberspace, and maritime issues. He also said the two are likely to meet again in September at the G20 in Hangzhou. Xi was the only leader Obama met in a bilateral format alongside the summit, but Obama also held a trilateral meeting with President Park Geun-hye of South Korea and Prime Minister Abe Shinzo of Japan. The United States and China released a joint presidential statement on climate change, declaring that, over the past three years, the issue “has become a pillar of the U.S.–China bilateral relationship.” The two governments also released a joint statement on nuclear security cooperation, reiterating a number of agreements and confirming that a new annual bilateral consultation took place as planned. Before the summit, Under Secretary of State for Arms Control and International Security Rose Gottemoeller, speaking about North Korea, said “now we have to ensure strong implementation of the (UN Security Council resolution), and thus far our cooperation with China on this has been very, very good.”

Not all signals from the Obama–Xi meeting were so positive. China’s government reportedly missed a deadline of the end of March to produce a new “negative list” offer in the ongoing negotiations toward a U.S.–China bilateral investment treaty (BIT). Deputy Secretary of State Antony Blinken expressed hope that the United States and China could talk about the potential deployment of the THAAD missile defense system in South Korea, but Vice Foreign Minister Zheng Zeguang said China was “firmly opposed.” In their statements before the meeting, Obama called “cyber” an area of difference, while Xi listed “cybersecurity” as an area for possible cooperation. There was no sign of emergent agreement on cyberspace issues or the South China Sea (see next item). In general, Chinese official coverageput a more positive spin on the meeting than U.S. press or official statements. Bonnie Glaser’s summary is a good and representative early analysis.

ANALYSIS: As a bilateral meeting, not a dedicated summit or state visit, the expectations for this meeting were generally moderate. Still, a joint document on nuclear security was almost a gimme alongside the Nuclear Security Summit, and the joint announcement that both governments would sign the Paris climate agreement on the first day possible showed only relatively predictable continued cooperation. Before the meeting, there had been stirrings about possible progress on BIT negotiations, but that amounted to a failure to make even the moderate expected progress. I had speculated that there might be some signaling to build on the joint cyberspace language from September, but no sign of progress emerged. At this point it might be time to start thinking of Obama–Xi interactions as stewardship of the relative stability the two governments have established, as Blinken put it, “defying a downward spiral of rivalry.” With China’s domestic political conditions uncertain and the U.S. conditions certainly unwell, continuing to prevent a downward spiral may be all that can be asked for.

SOUTH CHINA SEA
Signs of greater complexity, but few solutions, in U.S.–China disagreement over maritime territory

As Obama and Xi both generally avoided the topic of the South China Sea, the two governments and other regional actors proceeded to thicken the plot. Before the leaders met, Deputy Secretary of Defense Robert Work said the United States would not recognize an air defense identification zone (ADIZ) if China were to declare one in the South China Sea. “We don’t believe they have a basis in international law,” Work reportedly said, though the context leaves open the question of whether Work’s “international law” remark referred to an ADIZ or the “military alert zones” Chinese forces warn aircraft away from. A Chinese Defense Ministry spokesperson said of declaring an ADIZ: “Whether and when to do it depends on whether and to what extent China faces air security threat.” Also before the leaders met, a deputy assistant secretary of state told reporters China’s runways in the South China Sea are “designed to accommodate strategic bombers, not cargo planes for humanitarian assistance and disaster relief.” After the leaders met, Reuters reported that U.S. sources anticipate another military transit in the South China Sea, though timing was unclear. / Meanwhile, a Japanese submarine made a port call in the Philippines for the first time in 15 years. U.S. and Philippine forces held a joint exercise. And a New York Times reporter was along to report from a U.S. Navy ship in the South China Sea just before the Obama-Xi meeting. The story is a lively account of U.S.–China interactions there. It also reported “the Chinese are building and equipping outposts” at Scarborough Shoal, but this appears to have been a phrasing mistake and no other reports have suggested that is the case. Amidst speculation that China might build there, Yale Law School’s Robert Klipper explains why Chinese strategists might like to do so.

BIDS AND BALKS
China’s Anbang raises then drops bid to acquire Starwood Hotels amidst questions about its corporate structure

Anbang Insurance Group, which famously bought the Waldorf Astoria Hotel in New York last year, had been in a bidding battle against Marriott International to acquire Starwood Hotels. A week ago, Anbang upped its offer to $14 billion. The same day,The Wall Street Journal published a story examining its complicated ownership structure. NYT followed with a further examination of its political ties. The day after that, Anbang dropped its bid, and the Financial Times reported that Chinese regulators had “clipped the wings” of Anbang’s chairman, an outcome seen as possible at least a week earlier in a Caixin report. That article suggested the deal could run afoul of China Insurance Regulatory Commission rules “banning insurers from investing more than 15 percent of their assets abroad.”

ANALYSIS: This story is remarkable in its high-value twists and turns, but it also shows that regulatory risk for Chinese outbound investment is more complicated than the much-discussed national security review process in the United States. This would have been an excellent case to test U.S. receptiveness, however. Would the Committee on Foreign Investment in the United States (CFIUS) have blocked a Chinese acquisition of a company that holds extensive travel records and numerous properties in the United States? For now, we don’t know.

#USChinaWeek1966 <— follow this hashtag on Twitter for more
Johnson administration proposals for ‘exchanges of newsmen and scholars’ rejected by Chinese government

Seymour Topping reported in The New York Times on March 29, 1966: “Communist China accused the Johnson Administration today of feigning a desire for better relations while preparing for war. The Peking leadership rejected proposals by the United States for exchanges of newsmen and scholars and other contacts between the Chinese and American peoples.” A few days later, Topping reported that the rejection came with the assertion that “Washington intended to persuade the younger Chinese generation to accept the theory of peaceful evolution.”

That second story, which ran under the headline “Maoism Is Likely to Survive Mao,” included speculations on Chinese geopolitical objectives after Mao’s eventual death: “In terms of basic objectives, which include attainment of preeminence in Asia, expulsion of the United States presence from the region—particularly from Taiwan and Southeast Asia—and seizure of leadership of the Communist bloc in competition with the Soviet Union, no major policy changes are expected.

(Source: The New York Times. This entry is part of a new feature of U.S.–China Week, following U.S.–China relations as they developed in another era of change and uncertainty, 50 years ago.)

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 senior research scholar, lecturer, and senior fellow of the Paul Tsai China Center at Yale Law School, where he specializes in U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. His website is gwbstr.com.

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 East Asia and the United States, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to [email protected].

U.S.–China Week: Xi’s visit to Washington, Russel’s Asia speech, Bader’s China policy, Dai Bingguo and the ‘new model’ (2016.03.28)

Welcome to issue 45 of U.S.–China Week. President Xi Jinping will travel to Washington for the Nuclear Security Summit, and Xi will hold a bilateral meeting with President Barack Obama on Thursday, according to the White House. Xinhua has set up a special page (English, Chinese) for the trip, currently focusing on Xi’s present stop in Prague. I anticipate little new on the South China Sea, but we might hear more to build on September’s statements about cyberspace norms and commercial espionage. There is also a chance of some developments on the bilateral investment treaty (BIT) process, though there may not be much incentive to make that news public. This is one of Obama and Xi’s last chances to meet while both are in power, along with the G20 meeting in Hangzhou in September. If the governments release outcome documents of any length, I’ll be checking for new announcements of military-to-military activities as at least a signal of friendliness after significant negative statements from the U.S. side in recent weeks.

Other developments this past week weighed more heavily on “views” than on “news,” so this edition focuses on viewpoints.

As always: Please encourage friends and colleagues to subscribe to U.S.–China Week. Here is the web version of this issue, ideal for sharing on social media. And please send your comments, quibbles, and suggestions to [email protected].

A THIRD WAY
Bader: No simple ‘accommodation’ or ‘untrammeled rivalry’ with China, but ‘global cooperation, regional resolve’

Jeffrey Bader, the top White House Asia adviser during Obama’s first years in office, published a Brookings paper that neatly outlines a moderate view of U.S. policy toward China, one based on a belief that “the relationship with China cannot, and should not, be reduced to one of pure rivalry, nor should we overlook the very real strategic differences in the Western Pacific between us.” Bader names aspects of “cybersecurity and cyber innovation,” investment and banking measures, and “fisheries treaties and conservation” as areas where China might “play a greater role in supporting the global system.” The United States could protect its interests by “negotiating a bilateral investment treaty or agreement that imposes commercial disciplines on state-owned enterprises,” “restrict[ing] access to the U.S. market for companies that benefit from cyber-espionage,” and other measures. Bader also calls for: clarity on alliance commitments; U.S.–China–South Korea cooperation on North Korea; “operations, exercises, and challenges to claims contrary to international law and norms” in the South China Sea; working with the Asian Infrastructure Development Bank (AIIB); and this: “A human rights policy that makes China pay a price for extraterritorial seizures of citizens abroad and for interference with legitimate activities by U.S. information technology companies and citizens, while articulating U.S. values but making clear that China’s political system is for its citizens, not Americans, to decide.”

ANALYSIS: This is the best existing short explanation of the rationale for a U.S. China policy that is predicated neither on acquiescence to uncertain future changes nor on an assumption that a new Cold War (or worse) is inevitable. The mouthful in the last quote, however, highlights how hard it is to make this pragmatic principle into concrete policies. Bader does not make any claims that it’s going to be easy—just that the simpler, extreme approaches won’t cut it.

LAUNDRY LIST
State Department’s Daniel Russel outlines Asia approach in Germany, flags ‘universal rights,’ ‘rule of law’

Assistant Secretary of State Daniel Russel, the top U.S. diplomat for the Asia-Pacific, gave a wide-ranging speech and answered questions in Berlin. Beginning with a reminder that “the rebalance is definitely not a turn away from Europe,” Russel tackled several China-related issues. Domestically, he said, “as the middle class in China grows, … expectations rise. … [T]hey want a say over the decisions that affect their lives.” On the South China Sea, he dismissed several justifications for China’s island construction: protecting civilians, assisting fishermen, monitoring weather, humanitarian relief, and safeguarding freedom of navigation. Russel said the Philippine arbitration decision can spur a process toward a “new arrangement that would reduce tensions and that would open the door to cooperation.”

In Q&A, a questioner asked about whether “this rules-based system is to a certain degree not applying or cohering with their [Chinese] cultural experiences.” Russel replied firmly on the universality of the rules the United States advocates, saying “people are people and people want the same thing. They want opportunity, they want fairness, they want justice, they want safety, and that is what makes these values universal.” Russel pushed a narrative claiming the AIIB (which the U.S. government is widely accused of erroneously opposing) evolved significantly from its original proposal to what we see today, “due to concerted effort by a number of countries that either joined or declined to join.” He also called the “One Belt, One Road” initiative “a very poorly defined or an undefined set of policies and programs” and then criticized it on the substance.

ANALYSIS: There is a lot here to discuss, but Russel’s strong stance on the universality of international law and norms the U.S. government advocates, plus his invocation of the old assumption that economic development leads to democratic-sounding demands, fit into all the Chinese narratives about a U.S. policy of undermining Communist Party rule. His point-by-point dismissal of Chinese justifications for island construction was particularly effective, but his treatment of the likely outcome of the Philippine arbitration decision focused on the good possibilities while ignoring the bad ones. Finally, his point on AIIB is something I’d considered in the past: What if, despite how badly the publicity went for U.S. officials, the AIIB is now set up in alignment with U.S. preferences as a result of pressure from U.S. friends?

DEFINITIONS
Dai Bingguo: China still invested in Deng’s ‘low-profile’ international approach

Former State Councilor Dai Bingguo has been relatively quiet recently, but comments at a recent appearance with former Secretary of State Henry Kissinger emergedrecently. “In recent years, China’s diplomacy has focused on one fundamental strategic goal, and that is to foster a sound external environment for the building of a moderately prosperous society in all respects, thus a favorable overall environment and a good basis for the great renewal of the Chinese nation.  … It does not pursue expansion or hegemony and believes in mutual respect and win-win cooperation. … We respect the traditional influence and practical interests of the U.S. in the Asia-Pacific, and the U.S. should also respect China’s legitimate and growing interests in this region.” / Dai’s primary point was about the “new model of major-country relations,” which he framed explicitly as a tool to avoid what he called the “so-called [Thucydides] trap.” / Another version of the text appears here.

ANALYSIS: Dai may reemerge as a voice on the scene, as he recently published a memoir. In any case, if Dai is correct that the Chinese government’s “fundamental strategic goal” is a “sound external environment,” it is inescapable that events in the South China Sea have produced a neighborhood full of wary governments who have pursued balancing against Chinese infringements on their perceived interests. Continued Chinese emphasis on the “new model” may not find receptive ears in Washington, but it is helpful to see it framed so explicitly as a way to prevent rivalry. It is too bad, perhaps, that nothing ever came of Susan Rice’s call to “operationalize” the concept.

THIS WEEK IN 1966
Worker’s Gymnasium holds 16,000-person rally supporting U.S. antiwar efforts

“With 16,000 Peking citizens and friends from five continents present, and hundreds of thousands throughout China listening to the live radio broadcast, it was an impressive demonstration.… Speaker after speaker—Chinese, American, Vietnamese, Japanese, Laotian, Somali, Colombian, British and Australian—rose to acclaim the mountaining revolutionary struggles in America and throughout the world. …Nancy Milton, an American living in China, … said: ‘The American people are beginning to understand the real nature of the system which is the enemy of all the people of the world, including the American people themselves.'”

(Source: Peking Review, April 1, 1966. This entry is part of a new feature of U.S.–China Week, following U.S.–China relations as they developed in another era of change and uncertainty, 50 years ago.)

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 senior research scholar, lecturer, and senior fellow of the Paul Tsai China Center at Yale Law School, where he specializes in U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. His website is gwbstr.com.

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 East Asia and the United States, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to [email protected].

U.S.–China Week (2016.03.21)

Welcome to issue 44 of U.S.–China Week.

As always: Please encourage friends and colleagues to subscribe to U.S.–China Week. Here is the web version of this issue, ideal for sharing on social media. And please send your comments, quibbles, and suggestions to [email protected].

AT SEA
U.S. military gains access to five Philippine sites; Chinese Coast Guard in Indonesian ‘incursion’

The United States and the Philippines reached an agreement granting U.S. forces access to five Philippine military sites, furthering an earlier agreement allowing the return of some U.S. troops. A State Department spokesperson called the agreement “a long time in coming and in discussion.” A Chinese Foreign Ministry spokespersonsaid, “the U.S. military has kept talking about the so-called militarization in the South China Sea. Maybe they can explain whether their increased military deployment in the South China Sea and nearby areas is an action of militarization or not?” The U.S. Ambassador to the Philippines reportedly said personnel and supplies would move in “very soon.” / A Chinese Coast Guard ship reportedly intervened in an Indonesian law enforcement action involving a Chinese fishing vessel. One reportsaid the intervention took place 2.7 miles from an Indonesian island, but China’s Foreign Ministry spokesperson said the ship did not enter Indonesia’s territorial sea and that the incident occurred in “traditional Chinese fishing grounds.” / Meanwhile, India reportedly ruled out joint “patrols” with the United States in the South China Sea, with the defense minister saying “we only do joint exercises.” And Japan’s Liberal Democratic Party called upon Prime Minister Abe Shinzo to explore international arbitration if China does not agree to talks on natural resources.

ANALYSIS: The U.S.–Philippine progress furthers the remarkable turn of events resulting from increased concern about Chinese coercion, and it represents a continued investment of U.S. resources in the region. The Chinese Coast Guard interaction with Indonesia has raised alarm. If the Chinese spokesperson is correct that the incident did not take place within Indonesia’s territorial sea, the invocation of “traditional” fishing grounds is not a radical development. If, however, the Chinese intervention occurred within Indonesia’s sovereign waters, this would be a significant violation. Either case underlines the ambiguity of the claim to “traditional fishing grounds,” a fuzziness that is likely to play a significant role as the region navigates the results of the Philippine arbitration case expected soon.

CYBERSPACE
Private security firms attribute malware attacks to Chinese government-affiliated hackers; Xi’s pledge in question

A recent spate of so-called ransomware attacks had advanced hackers behind it, private cybersecurity researchers said. “Although they cannot be positive, the companies concluded that all were the work of a known advanced threat group from China, Attack Research Chief Executive Val Smith told Reuters.” The Reuters report was careful to note that attribution was uncertain and any state sponsorship was further unclear, though the wire’s headline credited “Chinese hackers” with the attacks. Jack Goldsmith parses recently reported U.S. government statements to the effect that “cyber operations from China are still targeting” U.S. computer systems. As Goldsmith writes, “Because China’s pledge last fall was both narrow and vague, it is unclear whether these statements mean that China has broken its word.” FBI Director James Comey, meanwhile, met with China’s public security chief Guo Shengkun.

ANALYSIS: While the U.S. government got some of what it wanted from Chinese counterparts when Xi pledged no state support for commercial hacking, these continued questions about whether China’s government has lived up to his pledge are inevitable. If Chinese government-sponsored commercial spying continues, the Obama administration would face a dilemma: publicly shame China and admit the September agreement was not effective, or pursue matters privately in hopes that lasting progress accrues. Since both Chinese and domestic reactions would likely be negative in the case of public shaming, I’m guessing we will hear little from the U.S. government on this front for some time—regardless of whether Chinese government-sponsored commercial theft continues. And of course, we can all be sure national security–motivated spying continues full force.

INVESTMENT
The case against the U.S.–China Bilateral Investment Treaty; New Chinese negative list expected this month

David Dayen, writing in the American Prospect, argues the U.S.–China Bilateral Investment Treaty (BIT) would be bad for U.S. workers: “U.S. companies operating in China encounter local corruption, preferential treatment for their domestic producers, intellectual property theft, and ever-changing regulatory demands. The BIT sweeps away such hurdles, and allows foreign investors to use [investor-state dispute settlement] to recoup lost profits if foreign governments use those maneuvers to hamper their business. It effectively removes American companies’ one big motivation for keeping manufacturing stateside—our relatively stable judicial and regulatory systems and rule of law. If companies can get all that guaranteed in China, there’s nothing keeping their factories here. The BIT, then, is a recipe for more outsourcing.” / Dayen also reports “the White House expects a new ‘negative list’ offer from China before President Xi Jinping arrives for a summit later this month.”

ANALYSIS: I had thought that once the Trans-Pacific Partnership (TPP) negotiations concluded we would start hearing more about BIT efforts, but that has not been the case. Given the negative attention TPP has attracted, including the defection of Hillary Clinton, who supported it as Secretary of State, this Prospect piece is an example of why any continuing efforts are kept quiet. Those who favor a BIT both for bilateral stability and for business reasons have long anticipated eventual opposition of the type expressed here; this is an early preview of what the Obama administration would face if they brought a BIT to Congress. This is an obstacle BIT proponents would not face if the administration had pursued the deal as an executive agreement.

NUCLEAR SECURITY
U.S. and China open nuclear security center in Beijing; Moniz uneasy about Chinese plutonium recycling

U.S. Energy Secretary Ernest Moniz and China Atomic Energy Authority Director Xu Dazhe inaugurated a jointly funded “Center of Excellence” for nuclear security in Beijing. The center was the product of a 2010 agreement by President Barack Obama and President Hu Jintao. Moniz also expressed concerns about what the Wall Street Journal called China’s “plans to process spent nuclear fuel into plutonium that could be used in weapons.” “We don’t support large-scale reprocessing,” Moniz told WSJ, saying it “certainly isn’t a positive in terms of nonproliferation.” The visit came just over a week before Xi is expected to arrive in Washington for the Nuclear Security Summit.

THIS WEEK IN 1966
People’s Daily reports approvingly of anti–Vietnam War activism in the United States

Comparing the U.S. war effort in Vietnam to Japanese imperialism and Hitler’s Germany, the People’s Daily on March 17, 1966, wrote approvingly of U.S. activists who distributed antiwar leaflets at military installations and contacted military families. “It is absolutely proper and in the interests of the American people (renmin) to mobilize U.S. soldiers to resist and oppose the war to invade Vietnam by any means necessary, and those who do so are displaying true patriotism and internationalism,” the article read. It went on to portray the American people as victims of manipulation by U.S. political leaders and noted the Justice Department and FBI’s efforts to investigate antiwar activism. A version of the article is available on this page, under the headline “美国人民在召唤  一个向侵越美军进行反对侵略战争宣传的运动在展开.”

(This entry is part of a new feature of U.S.–China Week, following U.S.–China relations as they developed in another era of change and uncertainty, 50 years ago.)

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 senior research scholar, lecturer, and senior fellow of the Paul Tsai China Center at Yale Law School, where he specializes in U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. His website is gwbstr.com.

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 East Asia and the United States, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to [email protected].

U.S.–China Week: A U.S. encirclement policy or mangled signaling? ZTE among targets of U.S. trade actions (2016.03.07)

Welcome to issue 43 of U.S.–China Week. At Foreign Affairs, I offer my early assessment of the Obama administration’s policy toward Asia. I argue that the “rebalance” of attention to the Asia-Pacific has been successful, but that there is more to be done to develop U.S. policy toward China and the region. Obama’s remaining months and the transition to a new president are an opportunity to develop an approach to the region based on the knowledge that change is under way, rather than clinging to a now-obsolete status quo.

U.S.–China Week will pause next week due to vacation. The next issue will come out March 21.

As always: Please encourage friends and colleagues to subscribe to U.S.–China Week. Here is the web version of this issue, ideal for sharing on social media. And please send your comments, quibbles, and suggestions to [email protected].

INDO-PACIFIC
U.S. aircraft carrier enters South China Sea as U.S. admiral proposes U.S.–India–Japan–Australia cooperation

A U.S. Pacific Fleet release said an aircraft carrier strike group “is conducting routine operations in the South China Sea,” having entered the area through the Luzon Strait between Taiwan and the Philippines, and maintaining “a location in the eastern half of these international waters for four days.” The carrier’s commander said, “We have Chinese ships around us that we normally didn’t see in my past experience.” The release listed eight ships that “have conducted similar events” in recent months, implicitly connecting the current voyage to more directly defined “freedom of navigation” operations. / Meanwhile in India, Adm. Harry Harris, commander of Pacific Command, suggested the United States, India, Japan, and Australia could hold a quadrilateral dialogue. “We are all united in supporting the international rules-based order,” he said. The U.S. ambassador to India said he hopes that “in the not too distant future” U.S. and Indian naval vessels will be seen “steaming together…throughout Indo-Pacific waters.” A NYT story saw in these remarks a call for an “informal strategic coalition” among the four countries. / A Chinese spokesperson noted “negative words” from “some officials of the U.S. military” and urged “the U.S. government to put some restraint on them”—meanwhile calling for “normal cooperation” between the United States and other countries not to target “a third party.”

ANALYSIS: In the U.S. defense establishment’s shift to focusing on the Indo-Pacific, which adds India as a strategic anchor in the conception of the formerly emphasized Asia-Pacific region, it is easy to perceive an effort to isolate and encircle China. When defense officials frame their cooperation using the same language—”rules-based order”—used to oppose Chinese actions, that perception is even more clear. Is it the policy of the U.S. government to develop a power bloc opposing China, or is it merely an impression the administration has not been careful to avoid? The Chinese call for the U.S. government to restrain military voices suggests a belief that the Pentagon and Pacific Command are running their own show without centralized messaging discipline. If true, this is dangerous; if not true, allowing the military to play “bad cop” is a risky way of expressing U.S. interests.

MILITARIZATION
U.S. Defense Secretary warns China against ‘militarization’; China’s NPC spokesperson accuses U.S. of same

U.S. Defense Secretary Ash Carter said “the United States joins virtually every nation in the region in being deeply concerned about the artificial island construction and militarization in the South China Sea, including steps, especially by China, as it has taken most recently, by placing anti-access systems and military aircraft on a disputed island. … President Xi stated in Washington a few months ago that China would not do this. China must not pursue militarization in the South China Sea. Specific actions will have specific consequences.” / A Foreign Ministry spokespersonsaid U.S. actions are “heightening tensions and driving militarization in the South China Sea.” / And Fu Ying, spokesperson for the National People’s Congress, said at a press conference that the U.S. plan, as part of the rebalance, to deploy more naval assets to the Asia-Pacific was itself “militarization.”

ANALYSIS: Carter’s specific remarks on Xi’s statement and the deployment of anti-access systems are misleading and frankly sloppy. As former Pacific Command chief Adm. Dennis Blair writes with Jeffrey Hornung, “President Xi Jinping stated that China did not intend to militarize the islands it had enlarged in the Spratlys. The missile and aircraft deployments to Woody Island [far away in the Paracels] do not violate that pledge.” Moreover, Xi only expressed a lack of intention to militarize the Spratlys—not a pledge never to do so. This debate over the question of undefined “militarization,” I say again, is a distraction.

EXCHANGE RATE EXCHANGE
Jack Lew urges ‘more market-determined’ Chinese currency, while Li Keqiang promises ‘managed floating,’ ‘stable’ rate

Secretary of the Treasury Jack Lew, in China to attend the G20 finance ministers meeting in Shanghai, said it is “critical that China continue to move toward a more market-determined exchange rate in an orderly manner.” Premier Li Keqiang reportedly said “China will continue to pursue a managed floating exchange rate regime based on market supply and demand and with reference to a basket of currencies, and will keep the exchange rate basically stable on a reasonable and balanced level.” Speaking in support of China’s economic transition, Lew said “clear communication to the market is critical.” / Li also said President Xi Jinping will meet President Barack Obama “in near future,” almost certainly a reference to Xi’s not-officially-announced participation in the Nuclear Security Summit in Washington at the end of this month.

TRADE ACTION
U.S. to restrict Chinese firm ZTE’s access to U.S. suppliers over Iran ties; anti-dumping cases on steel and refrigerant

The U.S. Commerce Department is reportedly to restrict U.S. exports to Chinese technology firm ZTE over its alleged violations of U.S. export controls on Iran. Reuters reported some plans regarding Iran were revealed in internal ZTE documents “outlining an alleged sanctions-busting scheme.” This would deny ZTE access to key suppliers such as Qualcomm, Microsoft, and IBM, Reuters reported. ZTE had previously been cited as a security risk in a 2012 House Intelligence Committee report, along with Huawei. A Chinese Foreign Ministry spokespersonsaid China opposes U.S. use of domestic law to sanction Chinese firms. / Meanwhile, U.S. and Mexican refrigerant makers reportedly sought anti-dumping duties on Chinese-made products. / And the Chinese Ministry of Commerce reportedlyopposed U.S. investigation into alleged Chinese dumping of steel products.

ANALYSIS: While it is no surprise China’s government prefers not see U.S. sanctions and WTO enforcement efforts against Chinese firms, its protests will fall on deaf ears so long as U.S. firms perceive unfair competition in their efforts in China.

THIS WEEK IN 1966
Comparing China’s humiliation to the American South’s; Calling for hearings, understanding to avoid war

In a speech that announced now famous “hearings on China and on American attitudes toward China,” Sen. Fulbright on March 7, 1966, argued for greater understanding of the “humiliation by Western imperialism” suffered by China since the 19th century. Fulbright, a senator from Arkansas, compared China’s experience to that of the American South: “The indignities suffered by the South during [the Civil War] have burdened not just the South but the entire Nation with a legacy of bitterness far more durable and, in retrospect, more damaging than the physical destruction wrought by the war itself. … These memories are irrational but not irrelevant. They are pertinent because they persist and, by persisting, continue to work a baleful influence on our national life. They may be pertinent as well in helping us to understand the bitterness and anger and unreason in the behavior of other people who once were great but then were struck down and finally rose again only after a long era of degradation at the hands of foreigners. I am thinking about China.”

Fulbright added, “In the short run the danger of war between China and America is real because an ‘open-ended’ war in Vietnam can bring the two great powers into conflict with each other, by accident or by some design, at almost any time. Some of our military experts are confident that China will not enter the war in Vietnam; their confidence would be more reassuring if it did not bring to mind the predictions of military experts in 1950 that China would not enter the Korean war, as well as more recent predictions about an early victory in Vietnam. In fact, it is the view of certain China experts in our Government that the Chinese leaders themselves expect to be at war with the United States within a year, and it is clear that some of our own officials also expect a war with China. The expectation of war, even though it is not desired, makes war more likely.”

(Source: Congressional Record. This entry is part of a new feature of U.S.–China Week, following U.S.–China relations as they developed in another era of change and uncertainty, 50 years ago.)<

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 senior research scholar, lecturer, and senior fellow of The China Center at Yale Law School, where he specializes in U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. His website is gwbstr.com.

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 East Asia and the United States, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to [email protected].