U.S.–China Week: U.S. cyber retaliation, White House–PACOM discord, energy and textile investment, Forbes on talking China (Issue 16, 2015.08.03)

Welcome to Issue 16 of U.S.–China Week, marking six months since the first prototype issue was sent out to several exceedingly tolerant friends and colleagues. Since then, readership has expanded to more than 500 subscribers from government, academia, and the media, including some of the people who have taught me the most over the years. Thanks to all who have followed along and shared feedback, and I look forward to hearing your insights in the future.

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]

NOW WHAT?
NYT: Obama administration wants to retaliate against China for personnel data hack, can’t settle on deterrence strategy

Following earlier reporting that the Obama administration had decided not to publicly identify China as the culprit in the vast hacking theft of government personnel data, The New York Times reports that the administration has decided it should retaliate, but has not decided how. Jack Goldsmith writes, “Any retaliation now, after all the public uncertainty about how to proceed, will hardly establish a credible deterrence policy… The government’s inability to mount a credible deterrence strategy in the face of at least 15 years of growing network intrusions makes pretty clear that deterrence through retaliation in this context cannot work.” The NYT report discusses options including “finding a way to breach the so-called great firewall … to demonstrate to the Chinese leadership that the one thing they value most—keeping absolute control over the country’s political dialogue—could be at risk if they do not moderate attacks on the United States.” Fudan University’s Shen Yi warns of Cold War dynamics and escalation risk, and CFR’s Adam Segal writesthat “attacks directed at the Great Firewall risk significant escalation.”

ANALYSIS: If the NYT reporting accurately represents the policy discussion and not just a sector of opinion within the government, it appears the Obama administration is attached to the idea of “imposing costs” on China for its online actions. But tit-for-tat dynamics mean the risk of escalation is high. Goldsmith points to former Deputy Secretary of Defense William Lynn, writing in 2010: “[D]eterrence will necessarily be based more on denying any benefit to attackers than on imposing costs through retaliation. The challenge is to make the defenses effective enough to deny an adversary the benefit of an attack despite the strength of offensive tools in cyberspace.” A “cyber-deterrent” might not be a weapon but an effective defense.

TERRITORIAL TACTICS
White House and U.S. Pacific Command reportedly differ on ‘freedom of navigation’ operations in South China Sea

U.S. Pacific Command (PACOM) chief Adm. Harry Harris reportedly believes the U.S. military should send warships within 12 nautical miles (nm) of China’s recently constructed islands. The U.S. military already conducts “freedom of navigation” (FON) operations and has not said whether it has entered a 12 nm radius of the features. Under the UN Convention on the Law of the Sea (UNCLOS), as Defense Department lawyer Raul Pedrozo says, “man-made islands constructed on submerged features are not entitled to a 12 [nm] territorial sea. Therefore, U.S. ships and aircraft can legally conduct operations within 12 [nm] of the feature.” The White House reportedly opposes this particular step in FON operations, supposedly with an eye to avoiding disruptions before President Xi Jinping’s planned U.S. visit in September. / The Chinese Defense Ministry’s monthly press briefing addressed recent Chinese military exercises in the South China Sea and expressed “serious concern on the U.S. activities to militarize the South China Sea region.”

ANALYSIS: PACOM’s apparent concern is that avoiding a 12 nm radius tacitly acknowledges a potential Chinese claim of a territorial sea under UNCLOS. I think this concern is overblown, since the law is clear. Entering that zone and publicizing that fact might push China’s government to make an explicit claim under UNCLOS. Some believe forcing China’s government to enunciate claims in the language of international law means progress, but it also means officials would be locked into a specific claim, rendering any later compromise more politically difficult. In any case, timing would be critical. For a lot of reasons, I am skeptical that U.S. restraint is simply about not offending Xi.

INVESTMENT
U.S. localities attracting Chinese investment in energy and textiles

The Center for American Progress reports on expanding Chinese investment in the U.S. energy sector and its benefits for local jobs and tax revenues. Report author Melanie Hart recommends the U.S. government create a new initiative under the SelectUSA inbound investment program to highlight the energy sector, and that the Obama administration should “shine a spotlight on these existing projects and create new opportunities” during Xi’s U.S. visit. / The NYT reports on Chinese-owned textile manufacturing in South Carolina and the increasing competitiveness of U.S. workers as the global economy changes.

ANALYSIS: Mutual benefit from investment by each country in the other’s economy is one of the few consistent stabilizing factors in U.S.–China relations today. Some local leaders in the United States champion the jobs and taxes gained from Chinese investment. Still, before some U.S. businesses speak up again in favor of stable China ties, they will want to see real progress on a bilateral investment treaty—which means actual signs of a more open investment environment in China.

ONE PROBLEM TWO SYSTEMS
NYT: China seeks U.S. help in capturing brother of recently deposed Hu Jintao deputy

Ling Wancheng, the youngest brother of President Hu Jintao’s recently charged close associate Ling Jihua, is reportedly in the United States as Chinese authorities seek his return to China. U.S. officials told the NYT Ling was in the United States but would not say whether he had sought asylum. In the (just out) NYT story, Christopher Johnson of CSIS speculates that the Chinese government might want Ling’s help in prosecuting his brother, who was expelled from the Communist Party last month. Johnson also said, “The [Chinese] leadership would want this guy badly. … There’s no question that he would have access to a lot of interesting things.”

ANALYSIS: The U.S. government must navigate its own legal system in assisting China’s corruption investigations or other law enforcement efforts. As I wrote in April when a deal was announced between the Department of Homeland Security and the Ministry of Public Security, U.S. procedures for removal of noncitizens include several steps and opportunities to seek asylum or other protections. Thinking creatively, perhaps non-cooperation on issues like this is a U.S. option to “impose costs” for hacking incidents.

THE LOYAL OPPOSITION
Randy Forbes: U.S. needs a new way to talk about China relationship

Rep. Randy Forbes (R-Va.), co-chairman of the Congressional China Caucus, is a reliable skeptic of the Chinese government’s moves and intentions. Forbes writes in the National Review that the U.S. government is too deferential to Chinese sensitivities in the way it talks about China. China’s artificial islands should not be called “islands,” for example, and U.S. officials should speak up in support of Taiwan and human rights. “The words American leaders use to describe issues of contention with China should, first and foremost, reflect U.S. interests and values,” Forbes writes. Speaking at the American Enterprise Institute, Forbes said, “We’ve become very adverse to any friction.”

ANALYSIS: The U.S. government certainly avoids making direct and confrontational pronouncements on a variety of issues, and not just with China. (Indeed, U.S. rhetoric toward China is at times quite heated.) Asia policy watchers will recall plenty of talk about not “upsetting Tokyo,” as well as Forbes’ example of “provoking Beijing.” Whether the U.S. government is effectively advocating for U.S. interests and values in its policy toward China is a valid and important question, but words are only part of a policy. Outcomes, not feel-good pronouncements, should be the measure of success.

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