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Jeb Bush on China: Excerpts from CFR

Former Florida Governor and Republican presidential candidate Jeb Bush discussed foreign policy during an event this week at the Council on Foreign Relations. Here are the passages related to China:

Two comments on the “pivot” concept:

[W]e need to reinvigorate the alliances that have kept us safe. [The word “Japan” does not appear in the transcript. –gw] Across the world, we see doubts about the United States’ role in the world. Do we have people’s back? Are we going to be there to invoke Article 5 of NATO, for example, or have we pivoted to Asia and really done it? These are questions that now are being asked. If you’re Prime Minister Netanyahu, you wonder whether United States—whether there’s light between the United States shoulder-to-shoulder with Israel. The world has been torn asunder. And our alliances have been tattered. And I think it’s important to reinvigorate those alliances if we’re serious about keeping a more peaceful world.

[W]e need to rebuild the military if we’re serious. Look, the president—this president is a phenomenal speaker, and from time to time he maybe gets off-script a little bit and sends signals of strength that have never been backed up. The red line is a good example of that. The pivot to Asia, and Asians are wondering where are we pivoting. First of all, the Europeans wonder, why are you pivoting away? The Asians wonder, where’s the pivot? And there’s no follow-up. The basic fact is that we have great, grandiose language that’s not backed up. And the place to back it up most particularly—not to be the world’s policeman as the president suggests from time to time, but to create a more peaceful world—is to rebuild our military in a way that is serious.

On China’s rise:

BUSH: I think we have—we have global interests. We’re America. We don’t have regional interests; we have global interests. We’re going to have to deal with the emergence of a rising China, or a China that may have economic insecurities and play out in terms of their aggressive nature in the region similar to what Russia is doing. You know, failed domestic policy yields a much more aggressive Russia overseas.

On Donald Trump’s approach:

BUSH: And his spokesman says, well, he doesn’t need to know all the details about it because you just need to know he’ll use it. (Laughter.) That’s not laughable. Someone who proposes a 45 percent tariff across the board on China, it’s not a serious proposal. It’s basically the advocacy of a global depression that will wipe out the middle class in this country and see retaliation that will create—will wreak havoc. I’m the only guy confronting this.

HIATT: So why is he gaining so much traction?

BUSH: I’m the only guy confronting this because people are anxious about their future. They’ve latched onto the large personality on the stage, but the reality is that he’s not a serious candidate. And he’ll get wiped out in the general election. This is not a political gathering, so we can move on, but the simple fact is that we have to restore a traditional role in foreign policy. And you can’t do this by, you know, rambling around, by saying Putin can take care of ISIS; China can take care of North Korea, it’s their problem; and in the same—literally in a 24-hour news cycle, propose a 45 percent tariff on the country that you’re saying it’s your responsibility to take care of North Korea.

There need to be candidates that stand up and saying there’s a better path than the path of the left, which is a path of retrenchment, and the path, you know, in an emerging part of the right that is viewing this where we don’t have a security interest in areas where we do. I think we have to recognize that these threats are real, that they have a huge impact on millions of people in our country, and that the first objective of the president of the United States needs to be to keep us safe. And you can’t keep us safe by talking trash without backing it up with serious plans.

BUSH: Well, I think we need full engagement with the Chinese across the board. I mean, it’s—for a couple of reasons. One, there are—we have a convergence of strategic interests. North Korea would certainly be one of those. Two, there could be huge misunderstandings, because my experience with China—I started traveling there in 2007 three or four times a year. And in talking to people, it became pretty clear, as a neophyte going to China, that they have no clue about us. And frankly, we have no clue about them. And that difference can create all sorts of bad outcomes.

The best example is—it seems like a small thing—in 2009, after the president’s reelection, there was the summit in Palm Springs. And Mrs. Obama didn’t go to the summit, and the glamorous first lady of China went with President Xi. And the scandal in China was that Mrs. Obama and the United States government—and the United States, therefore—were insulting China and its first couple by not having—by not being there.

And every meeting I had in Beijing started out for the first 10 minutes lambasting me about why it was, as an American, why it was that we insulted China. And I’m thinking, you know what, it could be that Mrs. Obama was worried about the science project of Malala (sic). I mean, we’re different. We don’t think the same way they do. I’m sure that they did not, you know, try to go out of their way to insult the country, 1.2 billion or 1.3 billion people of China, or the first couple when they were trying to establish better personal relationships. But that’s how you get into trouble is by not having full engagement.

So, yeah, I mean, we should be engaged to—because we have a mutual security interest as it relates to North Korea. But I think we need to deal with China from a position of strength, not weakness. And everything should be on the table, and it should be done based on mutual respect for sure. But we shouldn’t—we shouldn’t pull back when they attack us in terms of their attacks on cybersecurity, which they continue to do. We shouldn’t pull back when they are challenging the traditional maritime routes that have created prosperity for their own country and hundreds of millions of people being lifted out of poverty, where they’re trying to challenge the legitimacy of international law. We should be—we should be forceful on this.

And we should—if we’re going to pivot to Asia, which I’m not necessarily thinking is appropriate, we ought to be clear about, you know, what our role is in the region, which brings me to another element of how you would, I think, deal with China from a position of strength, which is supporting the Trans-Pacific Partnership, supporting a free trading agreement. It may not be perfect. And perhaps the next president will have a chance to renegotiate elements of it, just as President Obama did with the trade agreements that his predecessor had on the table for Congress to approve. It could be enhanced and improved.

But the fact is, if we don’t pass this agreement, we’re sending a signal that we’re not serious in Asia. The rest of our allies will basically receive this as a legitimate—and I think they’ll do so legitimately—that we’re leaving. We’re abandoning the region. And that would be an unmitigated disaster. Imagine trading standards that would look more like Chinese. Imagine trading standards in Asia that would not respect intellectual property or environmental challenges or whatever it is. The U.S. trading standards are the ones that create the chance for more people to benefit from them than the Chinese standards. And we should embrace these things, because it’s in our security interest to do so.

HIATT: What’s your sense so far of the current president of China? Do you think he has a good handle on the economic reform process?

BUSH: I’ve met him several times. He’s very dynamic for sure. This command-and-control approach I just—you know, look, I’m a little “l” liberal, entrepreneurial, capitalist-loving, God-fearing American. (Laughs.) I just—I think our system is the best system. Fix our system and it will lead the world.

The command-and-control approach—while China is a very well-organized economy, you can’t manage something as big and as complex as a modern economy from—with, you know, a handful of elites. And the idea that you can intervene in markets and not expect a bad result—trying to restrict capital flows, manipulating the currency perhaps, all of these things end up having a bad result rather than a good result.

The China miracle is phenomenal. It is something to be admired. But I don’t think it’s sustainable in its current form, no matter how impressive President Xi is.

More from the candidates on China is available at ChinaFile, whose tracker led me to look up this full transcript.

Asia in Obama’s last State of the Union address

[Stopped updating.]

The speech is out on Medium well before it begins.

There are two mentions of China and one of “Beijing,” none of Japan, two of Asia (not counting one reference to Asians as an ethnic group), and none of Korea.

China appears in seemingly contradictory senses, in both cases for its economy. In pushing for passage of the Trans-Pacific Partnership, Obama is slated to again raise the specter of Chinese economic rule-making power. In the other context, the potential for a foundering Chinese economy is listed as a nontraditional threat.

Far from a threat due to strength, the first direct mention of China comes in context of potential weaknesses in the economy:

In today’s world, we’re threatened less by evil empires and more by failing states. The Middle East is going through a transformation that will play out for a generation, rooted in conflicts that date back millennia. Economic headwinds blow from a Chinese economy in transition.

China appears again in the context of keeping it from setting the rules.

That’s how we forged a Trans-Pacific Partnership to open markets, protect workers and the environment, and advance American leadership in Asia. It cuts 18,000 taxes on products Made in America, and supports more good jobs. With TPP, China doesn’t set the rules in that region, we do. You want to show our strength in this century? Approve this agreement. Give us the tools to enforce it.

Before that, Obama denies the narrative of a declining United States, and mentions “Beijing” as an alternative.

I told you earlier all the talk of America’s economic decline is political hot air. Well, so is all the rhetoric you hear about our enemies getting stronger and America getting weaker. The United States of America is the most powerful nation on Earth. Period. It’s not even close. We spend more on our military than the next eight nations combined. Our troops are the finest fighting force in the history of the world. No nation dares to attack us or our allies because they know that’s the path to ruin. Surveys show our standing around the world is higher than when I was elected to this office, and when it comes to every important international issue, people of the world do not look to Beijing or Moscow to lead — they call us.

TPP: Setting rules and dropping a marker for Chinese reform

Today I join a ChinaFile conversation on the implications of the Trans-Pacific Partnership for China, launched by UCSD’s Barry Naughton and Arthur Kroeber of GaveKal Dragonomics, along with Guy de Jonquières. My contribution is here, but the entire discussion is worth a read.

The Trans-Pacific Partnership (TPP) is not, contrary to some recent commentary and contrary to Chinese suspicions that Barry Naughton is right to point out have mostly subsided, a “No China Club.” Though it is hard to discuss the detailed implications for China without seeing the actual text, we can consider what the agreement announced Monday represents for China’s position in trade negotiations.

First, though I have been critical of President Barack Obama’s rhetoric backing the TPP because “we can’t let countries like China write the rules of the global economy,” it’s worth considering the likelihood that Obama means what he says. If the TPP is enacted with what U.S. negotiators consider “high-standard” rules, it lays down a marker for China to move toward if it wishes to benefit from the trade grouping. This is absolutely compatible with Obama’s statement that “the United States welcomes the rise of a China that is peaceful, stable, prosperous, and a responsible player in global affairs” and his support for “China play[ing] a greater role in upholding the rules-based system that underpins the global economy.”

Second, China would have had to undergo substantial reforms in the state-owned sector, labor standards, and other areas—reforms that go well beyond China’s own Third Plenum reforms that many analysts see as lagging. In essence, China wasn’t ready for TPP negotiations even if it wanted to join. Only once the full agreement emerges can we assess the likelihood of China ever joining the TPP, but if the Chinese leadership is successful in pursuing its own reform agenda, it will be in a much better position to enter talks to join the TPP.

Third, there remain paths for convergence in trade that do not require China to join the TPP. If China and the United States conclude an ambitious bilateral investment treaty (BIT), experienced trade negotiators have said the BIT could play a role similar to WTO accession in providing an international carrot for internal Chinese reforms. Then there is China’s support for a Free Trade Area of the Asia-Pacific (FTAAP), originally supported by the United States but recently deemphasized (perhaps until the TPP is safely enacted). A FTAAP would include all APEC economies, which means every member of the TPP plus several others. Critically, the FTAAP would at this point not include India, whose inclusion would pose further, perhaps insurmountable, challenges on issues such as food subsidies. (The China-led Regional Comprehensive Economic Partnership (RCEP) does include India, and for that reason reaching a deal would be challenging and convergence between RCEP and TPP is unlikely.) If TPP goes into force, work could turn toward the BIT and, later, the FTAAP—allowing China to enter an agreement with the TPP economies without having to agree to provisions that might be deal-breakers.

Finally, we should not get ahead of events in assessing implications for China. The U.S. Congress could still hand Obama and the TPP negotiators a defeat (or a long delay). The economic and political implications for China hinge as much on implementation as on the content of the deal.

Evan Medeiros has ‘modest expectations’ for Xi Jinping visit, cites risk of election rhetoric

The Carnegie-Tsinghua Center for Global Policy in Beijing hosted former U.S. National Security Council Senior Director for Asia Evan Medeiros this month and just released a podcast, in which Medeiros is interviewed by Carnegie-Tsinghua Director Paul Haenle. Since Medeiros is fresh out of the White House (departure was announced in June), he has said little publicly. That podcast is definitely worth your time, but I found myself transcribing three of the answers. These are complete answers, but I have not transcribed the questions. Listen to the full podcast here.

MEDEIROS: I don’t believe that we’re at a tipping point. I think that you rightly pointed out we’re in a complex period in the U.S.-China relationship, but in my experience we’re always facing a complex time in the U.S.–China relationship, simply because this is a relationship defined by both cooperation and competition, and both elements are intensifying in recent years. So the important goal in China policy is to manage that cooperation and competition to ensure greater levels of cooperation, to elicit that from China, to encourage that using both incentives and disincentives, while at the same time bounding the disagreements, bounding the competition, so that doesn’t become the defining element of the relationship. And I think that is the core policy challenge, because I think there is wide agreement among specialists in the United States that we want to avoid inevitable rivalry between the United States and China. A final factor to keep in mind in assessing the future of the relationship is that this is a highly resilient relationship. We’re in year seven of the Obama administration, not year one. The channels of communication across the relationship are broader and deeper than they’ve ever been before. We know the Chinese, and they know us. We also have built up a very solid track record. The us and China, over the last seven years, have worked through some difficult issues, we have resolved crises, and we have a good track record of working together to solve important problems. North Korea’s nuclear program, Iran’s nuclear program, climate change, etc. So I think that fundamentally this relationship over the next 18 months under the Obama administration will continue to be a constructive one.

The principle issue that I’m worried about is China getting drawn into the U.S. election cycle, because that’s never a source of stability in the relationship, because it results in debates in the United States that can often demonize China in ways that negatively affect the U.S.-China relationship during the election and potentially constrain candidates, if and when they’re elected. So that’s not a helpful dynamic. I think the areas we need to work on are the areas of competition that you referred to earlier, Paul. In particular the issue of the South China Sea and cybersecurity. These are issues that not only affect American economic and security interests, they also touch on the fundamental question at the heart of the relationship, which is, what kind of rising power is China going to be? Is China going to adhere to international norms that have been accepted for decades? Or is China going to seek to revise those rules in ways that support China’s narrow interests. And so work on the South China Sea issue and the cyber issue is going to need to be done over the next 18 months, so these don’t become corrosive issues that undermine the overall stability of the relationship and put us on a path to inevitable rivalry.

Well having been through three of these big summits between President Obama and his Chinese counterpart, I have modest expectations. I think first and foremost, the most important element of any of these visits is ensuring that there’s plenty of time for both leaders to have extended discussion about the major strategic priorities in the U.S.–China relationship. It’s difficult to overstate the importance of that sort of interaction between the president of the United States and the president of China, to really work through the complexity of the relationship in order to expand cooperation and manage competition. I would encourage your listeners to do an assessment of the deliverables. That’s always important, and in particular it’s important to demonstrate that the U.S.–China relationship is delivering for the American people and that it’s serving American economic and security interests, but that should not be the only metric by which the state visit is judged as a success or a failure. I would encourage your listeners to pay attention to what President Obama and President Xi say at their press conference on the morning of the 25th. That is very high level strategic signaling on both parts, and hopefully both of them will have significant messages about taking the relationship to the next level.

Personnel hack calls not for sanctions, but stronger and ‘active’ defense

My latest piece for Nikkei Asian Review builds on last week’s U.S.–China Week and argues that sanctions are not the answer for the Obama administration as it weighs a response the hacking of U.S. government personnel data, allegedly by the Chinese government. Read the whole piece, but here are some highlights:

Given that primary defense has failed, however, widespread calls for retaliation are not surprising. One option is sanctions. In April, President Barack Obama issued an executive order threatening foreign individuals and entities with sanctions in response to “malicious cyber-enabled activities” that constitute a threat to “the national security, foreign policy and economy of the United States.” White House press secretary Josh Earnest said June 12 sanctions were a “newly available option … that is on the table” in response to the OPM hacks.

Levying economic sanctions against China in response to its efforts to gain access to a “legitimate foreign intelligence target,” however, would be misguided. To do so would invite economic retaliation not just from China but from other countries that are targets of similar U.S. efforts. It was never a secret that the U.S. government spies on foreign governments online, but Edward Snowden and other leakers have exposed those efforts in unprecedented detail.

But the loss of important government secrets calls for a different range of policy options. The best responses might be considered “active defense.” For instance, if a breach is detected while the intruders are still working, security officials might break into the intruders’ own systems to destroy or distort the stolen data. They might also target the same intruder’s other systems for disruption as a deterrent.

This kind of “active defense” is called for and expected in the world of espionage. Given news reports that the government only discovered the OPM intrusions after weeks or months, it seems less likely these measures would be effective. Unfortunately, the most realistic response now is to minimize the harm to those affected, increase accountability for maintaining secure systems, and more effectively compartmentalize data. [more]