U.S.–China Week: Xi-Obama prospects—Cyber accord? BIT progress? Climate leadership? High-speed rail? We’ll see… (2015.09.21)

Welcome to Issue 21 of U.S.–China Week. The torrent of news and commentary attached to President Xi Jinping’s imminent arrival in the United States continues, so this issue is a bit enlarged.

First, however, a note of correction: Last week’s issue included a broken link to Paul Haenle and Anne Sherman’s essay. The correct link is here.

Notes on the coming days:

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].

NOT ALL BAD?
Cyberspace arms deal under negotiation as sanctions threat on hold over commercial secret theft

As I write in my latest Diplomat piece, President Barack Obama told a business audience Wednesday he considers a “government or its proxies…stealing trade secrets” to be “an act of aggression that has to stop.” But Obama called for the United States and China to cooperatively build a “framework that is analogous to what we’ve done with nuclear power” for cyberspace. David Sanger reports negotiations are under way toward an accord that might pledge “no first use” of computer attacks on critical infrastructure. Jack Goldsmith is an informed skeptic of any potential accord who is consistently frustrated with the Obama administration’s threats without follow-through. Republicans have pushed Obama to enact sanctions that are now reportedly off the table until after Xi’s visit. Meanwhile Paul Mozur reports U.S. firms have been asked to sign a declaration promising their products would be “secure and controllable” and Chinese user data would be stored in China.

ANALYSIS: The significance of a potential deal restricting “cyber arms” use and/or development would depend heavily on the specifics, including scope, definitions, and verification. The governments could start, I have argued, with promises of restraint on areas of common strategic interest, such as nuclear command and control. It will take longer than a few days to come up with a truly helpful regime, but starting that process is real progress. Meanwhile, the U.S. government should continue to take actions on the separate cyberspace issue of commercial hacking.

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BILATERAL INVESTMENT TREATY
Plenty of positive noises about investment negotiations, but little indication of a major breakthrough

As agreed at June’s Strategic & Economic Dialogue (S&ED), China and the United States exchanged updated “negative lists” in the ongoing negotiations toward a bilateral investment treaty (BIT). A U.S. Trade Representative (USTR) spokesperson said: “In order to conclude the BIT negotiations successfully, the two sides will need to reach agreement on a high standard treaty text and a Chinese negative list that is limited, narrow, and represents a substantial liberalization of the Chinese investment market.” A statement from the Xi-chaired Central Leading Group for Deepening Overall Reform said China “will gain experience and gradually improve the list through pilot programs,” according to Xinhua. People’s Daily Online said BIT talks “will make up most of the discussions” between the presidents. A letter from 94 U.S. CEOs to the leaders pushed for “the rapid conclusion of a meaningful and high-standard” BIT.

ANALYSIS: The enthusiasm from Chinese media and U.S. businesses should be taken in context of the USTR statement above. We can expect a positive-sounding announcement of progress toward a BIT, but the devil will be in the details and in the Chinese authorities’ willingness and ability to make the reforms and concessions necessary for a BIT that would satisfy those enthusiastic CEOs. I could be wrong, butspeculation that a BIT will be concluded this week seems far fetched.

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SOUTH CHINA SEA
Pressure builds on Obama to challenge implied Chinese territorial claims

Media reports in recent weeks have portrayed a difference of opinion between the White House and the U.S. military over plans to sail Navy ships within 12 nautical miles (nm) of certain Chinese-constructed artificial islands to demonstrate that the United States does not believe they are entitled to a 12nm territorial sea under the U.N. Convention on the Law of the Sea (UNCLOS). Supposedly, military are for such operations and the White House has prevented them so far. Rep. Randy Forbes led a letter from Congressmen objecting to the administration’s position. Pacific Command chief Adm. Harry Harris told a Congressional committee, “I believe that we should exercise—be allowed to exercise, freedom of navigation and flight—maritime and flight—in the South China Sea against those islands that are not islands,” according to Reuters, saying entering within 12nm “is one of the operations we’re considering.”

ANALYSIS: Part of the argument for sailing within 12nm of the artificial islands that were originally only above water at low tide, or never at all, is that failing to do so supports an implicit Chinese claim to sovereign territorial seas. The U.S. program of freedom of navigation” (FON) operations has been designed to demonstrate objections. As NYU’s Jerry Cohen has argued, however, the U.S. government is in a weak position as a non-signatory to UNCLOS. FON operations could be more legally consequential if they were multilateral and included another state that could bring a claim under UNCLOS if China asserted improper rights. In any case, I’m not sure lack of FON actually constitutes acceptance of “state practice” in international law at a time when highly visible objections are being made in other ways. (Legal experts are encouraged tell me if I’m wrong.)

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ANTI-CORRUPTION
U.S. hands over one ‘most-wanted fugitive’ and seven others in charter flight to China

Chinese media reported on the arrival of one of China’s most-wanted economic fugitives thought to be in the United States, Yang Jinju, along with seven others. The Wall Street Journal reported an Immigration and Customs Enforcement official said “each of the individuals removed was subject to a final order of removal.” The official said the move “has been in the works for some time” and wasn’t connected to the Xi visit. It was unclear whether Yang had applied for political asylum before being returned to China. Charter flights were to be organized for repatriating Chinese criminals, according to an April agreement between the Ministry of Public Security and the Department of Homeland Security.

ALL POLITICS IS LOCAL
Localities take lead on climate; LA–Las Vegas high-speed rail

With the U.N. Climate Summit approaching at the beginning of December, U.S. and Chinese officials are highlighting Obama and Xi’s pledge of joint leadership. While national-level climate action is elusive in the United States, some state and local governments are ready to move, so the governments convened the U.S.–China Climate Leaders Summit in Los Angeles last week, producing a detailed joint declaration. Experts at ChinaFile explore the possibilities. / Meanwhile, Xinhua reports Xi’s visit will bring announcements of a joint venture to build a high-speed rail line from Las Vegas to Los Angeles, as well as deals between China State Construction and Dow Chemical, and between Sinomach and GE.

OVERFLOW: NOTABLE LINKS, HAPHAZARD ORDER

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. 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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