U.S.–China Week: Vietnam arms, ‘unsafe’ fighter encounter, BIT prospects, new reviews of U.S. tech in China (2016.05.23)

Welcome to issue 53 of U.S.–China Week, coming to you today from the Yale Center Beijing—among other things, a refuge with great connectivity and quite a view. For observers in Beijing and Washington, the most anticipated news this week was the inauguration of Tsai Ing-wen as president in Taiwan and what she would say in her inaugural address. Without going into detail, Tsai’s speech appeared to strike a balance in handling key wording related to the one-China concept and the 1992 Consensus, leading to measured but direct criticism by the State Council Taiwan Affairs Office that the speech gave “an incomplete test answer.” The Chinese government has seemingly decided to condition some Taiwan–mainland contact on a more complete assent from Tsai.

My latest short piece for The Diplomat this week calls for the U.S. policy debate tolook beyond the legal details of the freedom of navigation (FON) operations in the South China Sea and consider whether those operations are serving U.S. purposes. I have already received some useful comments, noting that the use of guided missile destroyers as opposed to other government or military vessels for these voyages in part serves to ensure personnel can defend themselves if necessary. Further feedback is always appreciated.

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].

SUMMIT CIRCUIT
Obama visits Vietnam and Japan this week; U.S. arms sales to Vietnam on the table

With two weeks to go before the U.S.–China Strategic and Economic Dialogue (S&ED) in Beijing, President Barack Obama is in Vietnam for a bilateral visit and is scheduled to arrive in Japan Wednesday for the G7 summit, plus a bilateral meeting with Prime Minister Shinzo Abe and a historic visit to Hiroshima. A U.S. governmentbriefing on the trip set out the agenda. The burning question reporters had has just moments ago been answered when news emerged that the United States will“completely lift” a ban on lethal weapons sales to Vietnam. Other developments to watch for include potential regular U.S. military access to Vietnamese facilities; the prospects for the Trans-Pacific Partnership (TPP); the symbolic details of and controversy over Obama’s visit to Hiroshima; and how Obama and others talk about China and the South China Sea. A Chinese Foreign Ministry spokesperson said “we are dissatisfied” with reported Japanese calls for the G7 to take up South China Sea issues. / In Washington, Deputy Secretary of State Antony Blinken and Executive Vice Foreign Minister Zhang Yesui co-chaired an inter-sessional meeting of the Strategic Security Dialogue, which is to meet in full form alongside the S&ED in Beijing early next month. The Chinese and U.S. governments both published short readouts, but only the U.S. statement noted that “maritime issues” were discussed. / A Chinese readout from a pre-S&ED call between Foreign Minister Wang Yi and Secretary of State John Kerry, however, did note that “both sides agreed to continuously maintain communication, and properly handle maritime issues.”

ANALYSIS: The debate surrounding arms sales to Vietnam put concerns about Vietnamese human rights practices against the desire to strengthen regional capabilities to confront Chinese policies in the South China Sea. If the early reports of the elimination of the embargo are correct, the geopolitical argument seems to have won out. Watch for the Chinese government reaction in the coming hours.

SOUTH CHINA SEA
Pentagon claims Chinese jet flew dangerously close to U.S. reconnaissance plane; Chinese official claims ‘safe distance’

A Pentagon spokesperson said the U.S. government was reviewing an incident in which a U.S. spy plane was intercepted by two Chinese fighters in the South China Sea. Reports said one of the two Chinese planes flew within about 50 feet of the U.S. plane, causing the U.S. pilot to maneuver to avoid a potential collision. “Initial reports characterized the incident as unsafe,” the spokesperson said. A Chinese spokesperson said the incident occurred “close to China’s Hainan” and that “two Chinese military aircraft followed and monitored the U.S. plane from a safe distance.” He added, “We also demand that the U.S. immediately cease this type of close reconnaissance and prevent this sort of incident from happening again.” A Pentagon statement said the encounter occurred about 50 nautical miles east of Hainan. Citing no sources, Breaking Defense reported the U.S. Pacific Command is seeking to install cameras that could record such incidents, providing records of alleged unsafe behavior. / Meanwhile, outgoing Philippine President Benigno Aquino reportedly told The New York Times he believed the United States would have to act if China took action to develop Scarborough Shoal. With unclear context, NYT quoteshim saying, “It has to maintain its ascendancy, moral ascendancy, and also the confidence of one of its allies.”

TRADE AND INVESTMENT
China working on bilateral investment treaty offer; steel spat continues despite U.S. duty announcement

Undersecretary of State Catherine Novelli reportedly told an international trade group that China has promised a new negative list offer “in the near future” and characterized the United States as in a “waiting zone” in the process of negotiating a bilateral investment treaty (BIT) with China. As I wrote in April, China reportedlymissed an earlier deadline for a negative list submission. Novelli indicated that Chinese officials had sought to assure U.S. counterparts that progress was still coming. “Folks at a senior level have told us they want to move forward, that everyone is working and rolling up their sleeves,” she said. / After the U.S. government said it would impose duties of more than 500 percent on a Chinese steel product, China’s Ministry of Finance said it would “continue to implement a tax rebate policy on steel exports,” essentially maintaining measures the U.S. duty is designed to offset. Reuters reports that the steel issue is to be on the agenda at the G7 summit this week in Japan. A Xinhua piece criticizing the U.S. move said: “While tariff protection might prop up prices of the U.S. steel and score some populist points with voters in an election year, it can’t improve market demand, save beleaguered steelmakers, or restore the health of the U.S. steel industry.” / Meanwhile, Bob Zoellick argued in an op-ed that if the United States fails to ratify the Trans-Pacific Partnership (TPP), “our Asian allies and partners will perceive America as yielding to China, and they will accommodate accordingly.”

ANALYSIS: It is almost inconceivable that the BIT process would even reach an agreement, let alone pass through Congress, before the end of Obama’s term. Earlier enthusiasm for negotiations was based on the assumption that China’s announced economic reforms would advance more effectively, or at least more quickly, than has been the case. Given that even the TPP faces an uncertain fate, with some possibility of a lame-duck session push in Congress but a lack of support from presidential candidates, the U.S. side of the BIT equation is almost as uncertain as the Chinese negative list.

CYBERSPACE
Chinese committee reviews foreign tech products for security; Jack Ma lunches with Obama; Apple’s Cook visits Beijing

NYT reports that Apple and other companies “in recent months have been subjected to reviews that target encryption and the data storage of tech products… Chinese officials require executives or employees of the foreign tech companies to answer questions about the products in person.” / Alibaba founder Jack Ma lunched with Obama at the White House. / Just after announcing a $1 billion investment in China’s ride-hailing leader Didi Chuxing, Apple CEO Tim Cook visited Beijing and met with regulators, among others. / Meanwhile, the second meeting of the U.S.–China High-Level Joint Dialogue on Cybercrime and Related Issues is scheduled to take place next month.

ANALYSIS: Without further details, it is hard to analyze the nature of the security reviews reported in the NYT. The story makes it fairly clear, however, that these reviews are different from the reviews of source code undertaken under controlled circumstances that some companies allow government clients, including in China, to undertake. If anyone knows more about what if any legal regime underlies these reported reviews, I would be interested to speak with you.

#USChinaWeek1966 <— follow this hashtag on Twitter for more
Fairbank: ‘Why Peking Casts Us As the Villain’

In an essay published in the NYT on May 22, 1966, Harvard’s John K. Fairbank wrote: “The contrasting experiences of Chinese and Americans at the hands of modern history would make any Chinese patriot resentful either at fate or at us specifically. Even if Communism had never been invented, we would probably face today a good deal of Chinese hostility. The origin of the Peking-Washington impasse cannot be blamed wholly on Marx and Lenin. Yet it is plan that Maoism cherishes a special hatred for ‘American imperialism,’ the constant menace of which keeps the revolution charged with fear and belligerence.”

(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].

1 thought on “U.S.–China Week: Vietnam arms, ‘unsafe’ fighter encounter, BIT prospects, new reviews of U.S. tech in China (2016.05.23)

  1. Pingback: U.S.–China Week: Red line at Scarborough? Selling TPP to beat China, PACOM’s communicator (2016.05.09) – Transpacifica

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