U.S.–China Week: Susan Rice meets Xi, Trump and GOP China rhetoric, RMB devaluation and WTO challenge, three visions of tech contest (2016.07.25)

Welcome to issue 61 of U.S.–China Week. I open this week with a new big-think piece from one of the most experienced U.S. strategists on East Asia, Amb. J. Stapleton Roy. Out today from my home institution, the Paul Tsai China Center at Yale Law School, is Roy’s working paper on the changing geopolitics of East Asia. The U.S. policy goal, Roy argues, must be “the encouragement of responsible behavior by a more powerful and influential China,” and not “a vain quest to preserve our traditional dominance in air and naval power.” Roy argues that it is a fundamental security interest of the United States to maintain the credibility of its alliance commitments and its responsibilities under the Taiwan Relations Act, and he defines the U.S. policy challenge as keeping this in mind while at the same time recognizing that China has its own fundamental security interests. A central challenge in U.S.–China relations, he argues, is maintaining a military balance “where each side possesses capabilities sufficient to deter inclinations by the other to use force to resolve serious differences, but with each lacking the dominance that could, in the eyes of the other, foster aggressive intentions.” Read the full paper here.

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].

EMISSARIES
Susan Rice in China for talks; Xi calls ‘pragmatic cooperation’ a ‘ballast’ of bilateral ties; Former Philippine leader takes on China negotiations

After the U.S. Chief of Naval Operations visited Chinese counterparts last week, National Security Adviser Susan Rice became the highest-level U.S. security official to visit China since the dramatically pro-Philippines conclusion to the South China Sea arbitration two weeks ago. According to a White House statement, Rice met with President Xi Jinping (addressing overall ties and Obama’s September China visit), State Councilor Yang Jiechi (global cooperation, North Korea, human rights, maritime, U.S. business interests), Central Military Commission Vice Chairman Fan Changlong (military relations, confidence-building measures), and Central Politics and Law Commission Chairman Meng Jianzhu (September 2015 “cyber commitments,” human rights, security issues). Xinhua reported that Xi framed “pragmatic cooperation” as “a ‘ballast’ in China-U.S. ties,” apparently modifying the usual framework that calls economic ties the ballast. (Video and Chinese Xinhua release.) AP reported that the South China Sea was not mentioned in front of reporters at any meeting. Rice is scheduled to remain in China until Wednesday.

Meanwhile, Japan Times reports: “Former Philippine President Fidel Ramos has accepted a position as special envoy to China… Ramos reportedly accepted the offer to lead a team that will open bilateral talks with China when he met with President Rodrigo Duterte in Davao City on Saturday night. … Beijing had offered to hold talks ‘outside of and in disregard’ to the international tribunal’s ruling, an overture rejected by Manila. Philippines Foreign Secretary Perfecto Yasay Jr. said Tuesday that he had told his Chinese counterpart, Wang Yi, that China’s condition ‘was not consistent with our constitution and our national interest.'”

ANALYSIS: The public tone set by the Richardson and Rice visits (and Treasury Secretary Jack Lew’s visit mentioned below) has reflected a focus on the positive while dutifully mentioning great tensions. Though these diplomatic efforts receive little attention compared with peril-filled rhetoric on the South China Sea, let alone compared with the U.S. election spectacle, the message that U.S.–China ties are deep and wide is quietly affirmed here. What we can’t yet know is whether this cautious positivity will hold past the September G20 summit (which Obama will attend), the U.S. election, or any number of contingencies in the maritime realm. Meanwhile, if not for the G20 as a justification, it would seem an obvious imbalance to have so many recent high-level U.S. visits to China with so few in the other direction.

CAMPAIGN 2016
Trump acceptance speech and Republican platform include strong words on China and Clinton-Obama policies

While accepting the Republican nomination for president, Donald Trump said he would stop “China’s outrageous theft of intellectual property, along with their illegal product dumping, and their devastating currency manipulation.” Trump criticized former Secretary of State Hillary Clinton’s support for NAFTA and China’s WTO accession, which he called “another one of her husband’s colossal mistakes and disasters.” The Republican platform also criticizes Obama for changes to the U.S. approach to internet governance, saying, “He threw the internet to the wolves, and they—Russia, China, Iran, and others—are ready to devour it.” The platform (rather bizarrely) blames the Obama administration’s nuclear disarmament efforts for “an emboldened China in the South China Sea.” And it explicitly notes a change in the party’s view on China’s rights developments: “China’s behavior has negated the optimistic language of our last platform concerning our future relations with China. The liberalizing policies of recent decades have been abruptly reversed, dissent brutally crushed, religious persecution heightened, the internet crippled, a barbaric population control two-child policy of forced abortions and forced sterilizations continued, and the cult of Mao revived.” The platform also takes on Confucius Institutes: “We caution … against academic or cultural operations under the control of the Chinese government and call upon American colleges to dissociate themselves from this increasing threat to academic freedom and honest research.” A Global Times op-ed responds to some of these statements. / Evan Osnos interviewed a Caixin reporter at the Republican Convention. / ChinaFile hosted a lively discussionabout the Republican approach to China.

ANALYSIS: The U.S. political media’s ingrained obsession with fact-checks has produced plenty of questions about the relationship with reality of Trump’s China comments, some of the biggest discrepancies showing up in the way Trump has packaged criticism of trade deals with mentions of China and the Trans-Pacific Partnership (to which China is not a party). The real message for Chinese officials, however, is that in the U.S. election it’s China’s economic behavior that candidates are lashing out at far more than behavior in the South China Sea or domestic human rights issues. Any reassurance Chinese officials offered with promises of reform has now been tempered by uncertainty about when or whether reforms will take place. Xi’s framing of “pragmatic cooperation” as “ballast” in bilateral ties may reflect a recognition of this. Strong economic ties were long called the ballast, without which the relationship risked instability; with that stabilizer uncertain, there is reason to seek broader mutual interests. More on economic factors in the next item.

TRADE & INVESTMENT
Lew in China for G20 ministerial as some governments question RMB devaluation; U.S. expands China WTO challenge

The Wall Street Journal reports Chinese currency depreciation was a concern among some at a G20 finance ministers meeting in Chengdu, but a U.S. official reportedly downplayed the concern: “a senior U.S. Treasury official noted that Beijing has intervened recently to prevent the yuan from falling further, actions the U.S. welcomes, describing them as not the kind of intervention ‘that we would see as being designed to gain an unfair advantage.'” In public remarks Treasury Secretary Jack Lew emphasized that “it is particularly important that there is no perception that major economies are boosting their growth at the expense of others.” / Meanwhile, at the World Trade Organization, U.S. trade diplomat Chris Wilsonnoted that “as growth in China’s economy has slowed, the United States has sensed an increasing reluctance among China’s economic planners to pursue further reforms.” The U.S. Trade Representative expanded a U.S. challenge on “China’s export restraints on raw materials.” / And the Rhodium Group reports that Chinese foreign direct investment in the United States was more than $18 billion in the first half of 2016, topping the 2015 total of $15.3 billion.

CYBERSPACE & TECHNOLOGY
Ideological contest, supercomputers and national security, and patriotic hacking

Mareike Ohlberg, in a MERICS brief, neatly outlines online and offline efforts in what the report says is the Communist Party’s perceived “ideological confrontation with ‘the West.” / Stanford’s Thomas Mullaney describes some of the potential national security implications of the oft-reported “supercomputing” contest that China has, in recent years, been leading globally. / Anni Piiparinen of the Atlantic Council writes of possible Chinese “patriotic hacker” denial of service attacks on Philippine websites following the UNCLOS tribunal’s award.

#USChinaWeek1966 <— follow this hashtag on Twitter for more
‘Edward Kennedy Calls for a “Two Chinas” Policy; But President Opposes Giving Seat in U.N. to Peking Now’

“WASHINGTON, July 20[, 1966] — Senator Edward M. Kennedy proposed today that both Communist and Nationalist China be seated in the United Nations, but his suggestion was quickly rejected as premature by President Johnson. The Massachusetts Democrat, who made his proposal in a Senate speech, offered it as a way for the United States to assume a ‘more positive position’ in the United Nation [sic] and, at the same time, to extend a ‘peaceful option’ to any new leaders who emerge in Communist China.”

(Source: The New York TimesThis entry is part of an ongoing feature of U.S.–China Week that follows 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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