Welcome to issue 43 of U.S.–China Week. At Foreign Affairs, I offer my early assessment of the Obama administration’s policy toward Asia. I argue that the “rebalance” of attention to the Asia-Pacific has been successful, but that there is more to be done to develop U.S. policy toward China and the region. Obama’s remaining months and the transition to a new president are an opportunity to develop an approach to the region based on the knowledge that change is under way, rather than clinging to a now-obsolete status quo.
U.S.–China Week will pause next week due to vacation. The next issue will come out March 21.
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INDO-PACIFIC
U.S. aircraft carrier enters South China Sea as U.S. admiral proposes U.S.–India–Japan–Australia cooperation
A U.S. Pacific Fleet release said an aircraft carrier strike group “is conducting routine operations in the South China Sea,” having entered the area through the Luzon Strait between Taiwan and the Philippines, and maintaining “a location in the eastern half of these international waters for four days.” The carrier’s commander said, “We have Chinese ships around us that we normally didn’t see in my past experience.” The release listed eight ships that “have conducted similar events” in recent months, implicitly connecting the current voyage to more directly defined “freedom of navigation” operations. / Meanwhile in India, Adm. Harry Harris, commander of Pacific Command, suggested the United States, India, Japan, and Australia could hold a quadrilateral dialogue. “We are all united in supporting the international rules-based order,” he said. The U.S. ambassador to India said he hopes that “in the not too distant future” U.S. and Indian naval vessels will be seen “steaming together…throughout Indo-Pacific waters.” A NYT story saw in these remarks a call for an “informal strategic coalition” among the four countries. / A Chinese spokesperson noted “negative words” from “some officials of the U.S. military” and urged “the U.S. government to put some restraint on them”—meanwhile calling for “normal cooperation” between the United States and other countries not to target “a third party.”
ANALYSIS: In the U.S. defense establishment’s shift to focusing on the Indo-Pacific, which adds India as a strategic anchor in the conception of the formerly emphasized Asia-Pacific region, it is easy to perceive an effort to isolate and encircle China. When defense officials frame their cooperation using the same language—”rules-based order”—used to oppose Chinese actions, that perception is even more clear. Is it the policy of the U.S. government to develop a power bloc opposing China, or is it merely an impression the administration has not been careful to avoid? The Chinese call for the U.S. government to restrain military voices suggests a belief that the Pentagon and Pacific Command are running their own show without centralized messaging discipline. If true, this is dangerous; if not true, allowing the military to play “bad cop” is a risky way of expressing U.S. interests.
MILITARIZATION
U.S. Defense Secretary warns China against ‘militarization’; China’s NPC spokesperson accuses U.S. of same
U.S. Defense Secretary Ash Carter said “the United States joins virtually every nation in the region in being deeply concerned about the artificial island construction and militarization in the South China Sea, including steps, especially by China, as it has taken most recently, by placing anti-access systems and military aircraft on a disputed island. … President Xi stated in Washington a few months ago that China would not do this. China must not pursue militarization in the South China Sea. Specific actions will have specific consequences.” / A Foreign Ministry spokespersonsaid U.S. actions are “heightening tensions and driving militarization in the South China Sea.” / And Fu Ying, spokesperson for the National People’s Congress, said at a press conference that the U.S. plan, as part of the rebalance, to deploy more naval assets to the Asia-Pacific was itself “militarization.”
ANALYSIS: Carter’s specific remarks on Xi’s statement and the deployment of anti-access systems are misleading and frankly sloppy. As former Pacific Command chief Adm. Dennis Blair writes with Jeffrey Hornung, “President Xi Jinping stated that China did not intend to militarize the islands it had enlarged in the Spratlys. The missile and aircraft deployments to Woody Island [far away in the Paracels] do not violate that pledge.” Moreover, Xi only expressed a lack of intention to militarize the Spratlys—not a pledge never to do so. This debate over the question of undefined “militarization,” I say again, is a distraction.
EXCHANGE RATE EXCHANGE
Jack Lew urges ‘more market-determined’ Chinese currency, while Li Keqiang promises ‘managed floating,’ ‘stable’ rate
Secretary of the Treasury Jack Lew, in China to attend the G20 finance ministers meeting in Shanghai, said it is “critical that China continue to move toward a more market-determined exchange rate in an orderly manner.” Premier Li Keqiang reportedly said “China will continue to pursue a managed floating exchange rate regime based on market supply and demand and with reference to a basket of currencies, and will keep the exchange rate basically stable on a reasonable and balanced level.” Speaking in support of China’s economic transition, Lew said “clear communication to the market is critical.” / Li also said President Xi Jinping will meet President Barack Obama “in near future,” almost certainly a reference to Xi’s not-officially-announced participation in the Nuclear Security Summit in Washington at the end of this month.
TRADE ACTION
U.S. to restrict Chinese firm ZTE’s access to U.S. suppliers over Iran ties; anti-dumping cases on steel and refrigerant
The U.S. Commerce Department is reportedly to restrict U.S. exports to Chinese technology firm ZTE over its alleged violations of U.S. export controls on Iran. Reuters reported some plans regarding Iran were revealed in internal ZTE documents “outlining an alleged sanctions-busting scheme.” This would deny ZTE access to key suppliers such as Qualcomm, Microsoft, and IBM, Reuters reported. ZTE had previously been cited as a security risk in a 2012 House Intelligence Committee report, along with Huawei. A Chinese Foreign Ministry spokespersonsaid China opposes U.S. use of domestic law to sanction Chinese firms. / Meanwhile, U.S. and Mexican refrigerant makers reportedly sought anti-dumping duties on Chinese-made products. / And the Chinese Ministry of Commerce reportedlyopposed U.S. investigation into alleged Chinese dumping of steel products.
ANALYSIS: While it is no surprise China’s government prefers not see U.S. sanctions and WTO enforcement efforts against Chinese firms, its protests will fall on deaf ears so long as U.S. firms perceive unfair competition in their efforts in China.
THIS WEEK IN 1966
Comparing China’s humiliation to the American South’s; Calling for hearings, understanding to avoid war
In a speech that announced now famous “hearings on China and on American attitudes toward China,” Sen. Fulbright on March 7, 1966, argued for greater understanding of the “humiliation by Western imperialism” suffered by China since the 19th century. Fulbright, a senator from Arkansas, compared China’s experience to that of the American South: “The indignities suffered by the South during [the Civil War] have burdened not just the South but the entire Nation with a legacy of bitterness far more durable and, in retrospect, more damaging than the physical destruction wrought by the war itself. … These memories are irrational but not irrelevant. They are pertinent because they persist and, by persisting, continue to work a baleful influence on our national life. They may be pertinent as well in helping us to understand the bitterness and anger and unreason in the behavior of other people who once were great but then were struck down and finally rose again only after a long era of degradation at the hands of foreigners. I am thinking about China.”
Fulbright added, “In the short run the danger of war between China and America is real because an ‘open-ended’ war in Vietnam can bring the two great powers into conflict with each other, by accident or by some design, at almost any time. Some of our military experts are confident that China will not enter the war in Vietnam; their confidence would be more reassuring if it did not bring to mind the predictions of military experts in 1950 that China would not enter the Korean war, as well as more recent predictions about an early victory in Vietnam. In fact, it is the view of certain China experts in our Government that the Chinese leaders themselves expect to be at war with the United States within a year, and it is clear that some of our own officials also expect a war with China. The expectation of war, even though it is not desired, makes war more likely.”
(Source: Congressional Record. 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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