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 [email protected].

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 [email protected].

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