U.S.–China Week (2016.03.21)

Welcome to issue 44 of U.S.–China Week.

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AT SEA
U.S. military gains access to five Philippine sites; Chinese Coast Guard in Indonesian ‘incursion’

The United States and the Philippines reached an agreement granting U.S. forces access to five Philippine military sites, furthering an earlier agreement allowing the return of some U.S. troops. A State Department spokesperson called the agreement “a long time in coming and in discussion.” A Chinese Foreign Ministry spokespersonsaid, “the U.S. military has kept talking about the so-called militarization in the South China Sea. Maybe they can explain whether their increased military deployment in the South China Sea and nearby areas is an action of militarization or not?” The U.S. Ambassador to the Philippines reportedly said personnel and supplies would move in “very soon.” / A Chinese Coast Guard ship reportedly intervened in an Indonesian law enforcement action involving a Chinese fishing vessel. One reportsaid the intervention took place 2.7 miles from an Indonesian island, but China’s Foreign Ministry spokesperson said the ship did not enter Indonesia’s territorial sea and that the incident occurred in “traditional Chinese fishing grounds.” / Meanwhile, India reportedly ruled out joint “patrols” with the United States in the South China Sea, with the defense minister saying “we only do joint exercises.” And Japan’s Liberal Democratic Party called upon Prime Minister Abe Shinzo to explore international arbitration if China does not agree to talks on natural resources.

ANALYSIS: The U.S.–Philippine progress furthers the remarkable turn of events resulting from increased concern about Chinese coercion, and it represents a continued investment of U.S. resources in the region. The Chinese Coast Guard interaction with Indonesia has raised alarm. If the Chinese spokesperson is correct that the incident did not take place within Indonesia’s territorial sea, the invocation of “traditional” fishing grounds is not a radical development. If, however, the Chinese intervention occurred within Indonesia’s sovereign waters, this would be a significant violation. Either case underlines the ambiguity of the claim to “traditional fishing grounds,” a fuzziness that is likely to play a significant role as the region navigates the results of the Philippine arbitration case expected soon.

CYBERSPACE
Private security firms attribute malware attacks to Chinese government-affiliated hackers; Xi’s pledge in question

A recent spate of so-called ransomware attacks had advanced hackers behind it, private cybersecurity researchers said. “Although they cannot be positive, the companies concluded that all were the work of a known advanced threat group from China, Attack Research Chief Executive Val Smith told Reuters.” The Reuters report was careful to note that attribution was uncertain and any state sponsorship was further unclear, though the wire’s headline credited “Chinese hackers” with the attacks. Jack Goldsmith parses recently reported U.S. government statements to the effect that “cyber operations from China are still targeting” U.S. computer systems. As Goldsmith writes, “Because China’s pledge last fall was both narrow and vague, it is unclear whether these statements mean that China has broken its word.” FBI Director James Comey, meanwhile, met with China’s public security chief Guo Shengkun.

ANALYSIS: While the U.S. government got some of what it wanted from Chinese counterparts when Xi pledged no state support for commercial hacking, these continued questions about whether China’s government has lived up to his pledge are inevitable. If Chinese government-sponsored commercial spying continues, the Obama administration would face a dilemma: publicly shame China and admit the September agreement was not effective, or pursue matters privately in hopes that lasting progress accrues. Since both Chinese and domestic reactions would likely be negative in the case of public shaming, I’m guessing we will hear little from the U.S. government on this front for some time—regardless of whether Chinese government-sponsored commercial theft continues. And of course, we can all be sure national security–motivated spying continues full force.

INVESTMENT
The case against the U.S.–China Bilateral Investment Treaty; New Chinese negative list expected this month

David Dayen, writing in the American Prospect, argues the U.S.–China Bilateral Investment Treaty (BIT) would be bad for U.S. workers: “U.S. companies operating in China encounter local corruption, preferential treatment for their domestic producers, intellectual property theft, and ever-changing regulatory demands. The BIT sweeps away such hurdles, and allows foreign investors to use [investor-state dispute settlement] to recoup lost profits if foreign governments use those maneuvers to hamper their business. It effectively removes American companies’ one big motivation for keeping manufacturing stateside—our relatively stable judicial and regulatory systems and rule of law. If companies can get all that guaranteed in China, there’s nothing keeping their factories here. The BIT, then, is a recipe for more outsourcing.” / Dayen also reports “the White House expects a new ‘negative list’ offer from China before President Xi Jinping arrives for a summit later this month.”

ANALYSIS: I had thought that once the Trans-Pacific Partnership (TPP) negotiations concluded we would start hearing more about BIT efforts, but that has not been the case. Given the negative attention TPP has attracted, including the defection of Hillary Clinton, who supported it as Secretary of State, this Prospect piece is an example of why any continuing efforts are kept quiet. Those who favor a BIT both for bilateral stability and for business reasons have long anticipated eventual opposition of the type expressed here; this is an early preview of what the Obama administration would face if they brought a BIT to Congress. This is an obstacle BIT proponents would not face if the administration had pursued the deal as an executive agreement.

NUCLEAR SECURITY
U.S. and China open nuclear security center in Beijing; Moniz uneasy about Chinese plutonium recycling

U.S. Energy Secretary Ernest Moniz and China Atomic Energy Authority Director Xu Dazhe inaugurated a jointly funded “Center of Excellence” for nuclear security in Beijing. The center was the product of a 2010 agreement by President Barack Obama and President Hu Jintao. Moniz also expressed concerns about what the Wall Street Journal called China’s “plans to process spent nuclear fuel into plutonium that could be used in weapons.” “We don’t support large-scale reprocessing,” Moniz told WSJ, saying it “certainly isn’t a positive in terms of nonproliferation.” The visit came just over a week before Xi is expected to arrive in Washington for the Nuclear Security Summit.

THIS WEEK IN 1966
People’s Daily reports approvingly of anti–Vietnam War activism in the United States

Comparing the U.S. war effort in Vietnam to Japanese imperialism and Hitler’s Germany, the People’s Daily on March 17, 1966, wrote approvingly of U.S. activists who distributed antiwar leaflets at military installations and contacted military families. “It is absolutely proper and in the interests of the American people (renmin) to mobilize U.S. soldiers to resist and oppose the war to invade Vietnam by any means necessary, and those who do so are displaying true patriotism and internationalism,” the article read. It went on to portray the American people as victims of manipulation by U.S. political leaders and noted the Justice Department and FBI’s efforts to investigate antiwar activism. A version of the article is available on this page, under the headline “美国人民在召唤  一个向侵越美军进行反对侵略战争宣传的运动在展开.”

(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 Paul Tsai 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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