U.S.–China Week: Korea sanctions deal, PACOM’s ‘bad cop’?, CFIUS in context, Kurt Campbell’s Pekingology (2016.02.29)

Welcome to issue 42 of U.S.–China Week. I’d like to say that a trip to Beijing has spared me from conversations about the U.S. election, but that has not been the case. Friends here, Chinese and international, have been watching the Republican contest and are trying to understand what a Donald Trump candidacy or presidency might mean. Everyone I have spoken to was shocked by former U.S. Ambassador to China Jon Huntsman’s suggestion that he would likely support Trump if he became the Republican nominee. Still, no one knows how a nominee or president Trump might approach China policy, and everyone seems convinced a Hillary Clinton presidency would represent continuity (though not everyone in China likes that idea). The U.S. government may operate in a more transparent way than the Chinese party-state, but this U.S. election season shows that both sides can produce their share of uncertainty.

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NORTH KOREA
U.S. and China back new UN sanctions as FM Wang Yi visits Washington; South Korea’s ties in flux

After several rounds of U.S.–China meetings and other consultations, the United States reportedly circulated a draft UN Security Council resolution with Chinese support. A Chinese spokesperson said “we hope and believe that the new resolution can effectively limit further progress of the DPRK’s nuclear and missile program” but said a “fundamental solution” will require “dialogue and negotiation.” Foreign Minister Wang Yi, in a press conference with Secretary of State John Kerry, said “we want to pursue in parallel tracks the denuclearization of the Korean Peninsula and the replacement of the Korean armistice with a peace agreement.” A White House spokesperson described recent U.S.–North Korea discussions this way: “There was interest expressed by the North Koreans in discussing a peace treaty. We considered their proposal, but also made clear that denuclearization had to be part of any discussion. And the truth is the North Koreans rejected that response.”

Wang, in a wide-ranging speech in Washington, clarified that the “parallel tracks” suggestion meant that there would be no peace agreement without denuclearization, but that “without a peace agreement and without addressing the legitimate concerns of the parties, including those of the DPRK, then denuclearization cannot be achieved in a sustainable way.” In the same speech, Wang reiterated Chinese concern about U.S.–South Korea discussions about deploying the advanced THAAD missile defense system, saying China’s “legitimate national security interests may be jeopardized or threatened” and that “a convincing explanation must be provided to China.” China’s ambassador to South Korea had warned that installing the system could “destroy” their bilateral ties. Assistant Secretary of State Daniel Russel visited Beijing and met with China’s envoy for North Korea.

ANALYSIS: In the careful diplomatic language around the “parallel” or “dual” track approach, we can see the possibility of a return to dialogue with the United States and North Korea at the same table, whether or not under the Six Party Talks framework. Thinking creatively, the armistice could theoretically be replaced by a peace agreement without lifting sanctions, meaning such an agreement could be seen as an intermediate and largely symbolic step toward denuclearization. But so far there is no sign the North Korean leadership would be interested.

BAD COP?
U.S. admiral: ‘China seeks hegemony,’ U.S. ‘freedom of navigation’ activities to continue

Asked during a Congressional hearing about China’s intentions, the top U.S. military commander in the Pacific, Adm. Harry Harris, said, “I believe China seeks hegemony in East Asia. Simple as that.” Separately, at a Pentagon press conference, Harris said the U.S. military would not recognize an air defense identification zone (ADIZ) if China declared one in the South China Sea. “We would ignore it, just like we’ve ignored the ADIZ that they’ve put in place in the East China Sea,” Harris said. In the press conference, Harris labeled Chinese objections to a THAAD deployment in South Korea “interference” and “preposterous, especially when you consider that THAAD is not a threat to China.” In a separate Congressional hearing, Harrispromised more “freedom of navigation” (FON) operations and said they would be more complex. / Meanwhile, a Chinese Defense Ministry spokesperson said China will join the multinational “RIMPAC” military exercises near Hawaii this summer.

ANALYSIS: The debate over whether China is “militarizing” the South China Sea continues, and it continues to be a distraction. Actions by both the United States and China already resemble tit-for-tat escalation of deployments and shows of force. Speaking of the region as if it were not already a realm of military jockeying obscures the importance of confronting the underlying issues, something that will be unavoidable when the Philippine arbitration decision is released in the coming weeks. / China’s RIMPAC participation was actually announced in September, as Inoted at the time, so mentioning it again may have been an effort to inject some positivity on military ties during a generally oppositional news cycle.

INVESTMENT
Report: U.S. reviews more Chinese deals for security because there are more, and more tech-focused, Chinese deals

China again was the country whose deals in the United States produced the most reviews by the Committee on Foreign Investment in the United States (CFIUS), which assesses foreign acquisitions of U.S. firms for national security implications, according to the latest CFIUS report covering 2014. Rhodium Group’s Thilo Hanemann and Daniel Rosen argue that this is not a reflection of greater scrutiny of Chinese deals, but rather of the greater volume of deals from China and a shift to technology sectors that draw greater scrutiny.

ANALYSIS: A real measure of the effect of U.S. national security reviews would have to account for acquisitions that are not even attempted because the parties believe they would be blocked. Given the chance, for instance, a Chinese defense firm might be eager to acquire parts of Boeing or Northrop Grumman—but they don’t try because they would very likely be blocked. But it’s not just Chinese companies who would be blocked in that way. In an effort to explain CFIUS reviews, Hanemann and Rosen are right to ask what kinds of transactions are being attempted.

XI WATCHING
Kurt Campbell co-authors report anticipating Chinese foreign policy driven by nationalism and domestic instability

Former Assistant Secretary of State Kurt Campbell, seen as an adviser to Hillary Clinton on Asian affairs, co-authored a new Council on Foreign Relations report with Robert Blackwill on China’s foreign policy under President Xi Jinping: “Economic growth and nationalism have for decades been the two founts of legitimacy for the Communist Party, and as the former wanes, Xi will likely rely increasingly on the latter.” They emphasize Xi’s personalization of rule, arguing that U.S. officials have less access than before: “Familiar interlocutors at the State Council and Foreign Ministry, who once provided much-needed insight into an often mysterious policymaking process, are no longer central within it.” Blackwill and Campbell say containment “has no relevant application in East Asia today” and advocate for a “grand strategy” designed to “use a variety of instruments of statecraft to incentivize China to commit to a rules-based order but impose costs that are in excess of the gains Beijing would reap if it fails to do so.” They call for, among other things: doubling down on the “pivot” or “rebalance”; efforts “to maintain U.S. primacy in Asia”; avoiding a “fourth communique” with China or other policies that would put China at the center of U.S. Asia ties; and greater engagement with Xi and the Chinese government. Blackwill was also co-author of a widely read previous CFR report that called for an stern approach to China.

ANALYSIS: Much like the previous CFR report, the authors do little to examine the interactive nature of U.S. and Chinese actions. They diagnose in Xi the behaviors of a strongman who is ultimately weak and therefore lashes out abroad to deflect domestic criticism. In examining Chinese government actions, they fail to adequately consider the influence of U.S. policies—including the “rebalance” efforts. In contrast, when prescribing a focus on primacy and strengthened regional ties, they recognize that U.S. priorities are affected or driven by Chinese actions. Why not, at least in part, the other way around?

THIS WEEK IN 1966
Sen. Fulbright proposes ‘accommodation’ with China in Vietnam, appears further at odds with Johnson

“As long as China and America are competitors in Southeast Asia, there can be no lasting peace or stability in that part of the world,” Senator J. W. Fulbright said in what The New York Times called a “major Senate speech.” Fulbright called for “neutralization” of the region—essentially a deal in which both the United States and China would pull out. He added: “The policy of growing involvement that the United States is now following in the apparent belief that it will persuade the Chinese of our determination to remain in Southeast Asia may in fact have the opposite effect: It may persuade them, however wrongly, that the American people and their government will sooner or later withdraw their support from an insupportable commitment and abandon Southeast Asia to the hegemony of China.” In advocating “neutralization,” Fulbright explicitly advocated “accommodation” over “expanded military action.” In the view of a Times reporter, the speech put the Senate Foreign Relations Committee chairman “more at odds than ever with the Administration’s policy in Vietnam.”

(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].

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