Welcome to issue 64 of U.S.–China Week. A bit of personal trivia… This coming week marks 10 years since I launched the blog that soon became Transpacifica, U.S.–China Week’s home. This week therefore also marks a full decade of my efforts to understand and foster discussion on U.S.–East Asian relations. Since then we’ve seen a lot of history and more than 600 entries, but the internet has spoken: Transpacifica’s all-time most-visited post (by more than a factor of two) was a 2008explainer on a now-defunct arrangement that allowed Bank of America customers to make free ATM withdrawals in China. Clearly this shows that (1) the microeconomics of transpacific ties deserve greater attention, and (2) service journalism sells. I hope you are finding U.S.–China Week of service, even if I can’t cover all of your crossborder banking needs.
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. You can also find U.S.–China Week on Medium and on Facebook, and you can follow me on Twitter at @gwbstr. And please send your comments, quibbles, and suggestions to[email protected].
Chinese and Vietnamese hardware on the move as China’s diplomacy warms with the Philippines and cools with Japan
Former Philippine President Fidel Ramos, acting in his personal capacity, expressed the Philippine government’s “desire to hold formal discussions with the Chinese government on issues of mutual concern and interest at the appropriate time to explore pathways to peace and cooperation,” according to a joint statement signed by Ramos and National People’s Congress foreign affairs chief Fu Ying, among others, after a meeting in Hong Kong. The statement also said the Chinese government had invited Ramos to visit Beijing as special envoy of the new Philippine president, Rodrigo Duterte. Wu Shicun, head of a South China Sea think tank in Hainan, saidRamos’ visit to Beijing was necessary to prepare for a state visit by Duterte.
MEANWHILE: CSIS’ AMTI released new images and analysis reporting the construction of reinforced hangers on each of the three features China has rapidly built up in the Spratly Islands in recent months. The New York Times‘ coverage focused on the question of “militarization,” and carried AMTI’s analysis indicating that one class of hangers under construction could hold Chinese fighters, while the other could hold tankers, transports, bombers, and other larger aircraft. AMTI’s Greg Poling told NYT: “They are far thicker than you would build for any civilian purpose. … They’re reinforced to take a strike.” / China reportedly suspended an assistant foreign minister’s visit to Japan over Japanese protests against Chinese vessels’ presence near the Senkaku/Diaoyu Islands. In the same area, the Japanese coast guard rescued Chinese fishing boat crew members after their vessel collided with a 300-meter bulk carrier, for which the Chinese government “expressed appreciation.” / And Vietnam reportedly moved rocket launchers to positions in the Spratlys that are potentially within range of the developing Chinese installations there.
ANALYSIS: If successfully managed, the tentative flourishing of Philippine-Chinese talks could lead to a less risky general environment; but there are many potential pitfalls. Any deals struck would have implications both for U.S. policy and for the de facto effect of the UNCLOS tribunal’s award, and both of those factors could prove troublesome for diplomats. Recent events with Japan also show that the Chinese government is willing to take actions that are certain to produce a vocal reaction, and then cut off diplomatic contacts supposedly as a result of that very reaction. The Philippine government’s apparent decision to prioritize opening talks may reduce its desire to call out Chinese construction efforts in disputed zones. / I have argued for months that parsing President Xi Jinping’s statement about lacking intention to pursue militarization in the Spratlys is a waste of time. The new runways there have long held the potential for military use, and the present reports about construction of hardened hangars only increase that potential. No one should miss that the South China Sea is already home to regular expressions of political positions through military deployments, and few seem to have any trouble realizing there is risk of military crisis. As the East China Sea situation suggests, crises could also arise from non-military interactions, such as those including maritime militia, fishing boats, or civilian government vessels.
In economy-focused speeches featuring China, Trump pushes trade enforcement and Clinton vows to ‘stand up’ to China
Both major party candidates for U.S. president delivered speeches on the economy.
- Donald Trump said, “At the center of my plan is trade enforcement with China. This alone could return millions of jobs to our economy. China is responsible for nearly half of our entire trade deficit. They break the rules in every way imaginable.” Trump mentioned export subsidies, currency manipulation, intellectual property theft, and lax rules on the environment and labor. / After Trump’s speech, Marketplace ran an analysis of the argument that trade with China caused a loss of U.S. jobs.
- Former Secretary of State Hillary Clinton suggested Trump’s ideas would start “a trade war with China”; spoke of competing against China and Germany to be the global leader in renewable energy; urged stronger trade enforcement, saying “China and other countries have gamed the system for too long”; and pointed out that Trump neckties were made in China. Most directly, in the context of currency manipulation, IP theft, and trade enforcement, Clinton said, “as president, I will stand up to China and anyone else who tries to take advantage of American workers and companies.” The “stand up” line echoesher DNC and previous remarks.
ANALYSIS: A narrow focus on the candidates’ China remarks can sometimes suggest the two aren’t all that far apart. Both again emphasize the need to stop Chinese behavior that is framed as one or the other kind of cheating. Both see China as home to a major competing economy. Both talk tough on China in apparent efforts to signal recognition of concerns over unemployment and wage stagnation. Clinton goes after Trump for potentially starting a trade war and for manufacturing products in China; Trump in other settings (though not in this speech) goes after Clinton for her husband’s efforts on China’s WTO accession. For real disagreement in these economic visions, look outside the China references.
Chinese researchers to launch satellite for quantum communication development
Josh Chin reports on a satellite launch scheduled for the coming days that would reportedly put China ahead of other countries in developing quantum encryption and communications technology: “‘There’s been a race to produce a quantum satellite, and it is very likely that China is going to win that race,’ said Nicolas Gisin, a professor and quantum physicist at the University of Geneva. ‘It shows again China’s ability to commit to large and ambitious projects and to realize them.’” One of the researchers involved, Chaoyang Lu, told Nature, “Definitely, I think there will be a race.” More from Nature: “The quantum internet is likely to involve a combination of satellite- and ground-based links, says Anton Zeilinger, a physicist at the Austrian Academy of Sciences in Vienna, who argued unsuccessfully for a European quantum satellite before joining forces with the Chinese team. … The United States has a relatively low profile when it comes to this particular space race, but Zeilinger suggests that it could be doing more work on the topic that is classified.” Popular Science has an earlier story, and a short explainer on quantum encryption.
ANALYSIS: In the context of U.S. concern about Chinese espionage capabilities, the question of competition over supercomputing (which might be used to break codes), quantum computing (also good for code breaking), and quantum encyption has broken out of the tech media more frequently than usual. Zeilinger above raises a basic problem in assessing such competition: While publicized Chinese achievements are reported in the United States with alarm, at least some comparable U.S. achievements are likely to be highly classified. This is akin to the flood of reports about Chinese-linked hacking incidents while U.S. spying generally stays under the radar, except when journalists find exceptional sources or major breaches like the Snowden leaks occur. / Side note: It seems to me the Chinese government would be unhappy to see quantum encryption widely deployed in the civilian world, since its policies about classic encryption emphasize the government’s ability to access data.
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‘China’s Purge Puzzles U.S.’: NYT outlines early theories about Cultural Revolution cause
The New York Times, Aug. 13, 1966: “For experts in the State Department and observers at widespread listening posts, the purge-ridden ‘proletarian cultural revolution’ sweeping Communist China presents a dizzying puzzlement.
There is a bewildering variety of partial explanations for what is going on in Communist China these days, and most of them are as specific as the fortune in a fortune cookie.
‘We are working in a haze and through the gloom,’ a State Department official said yesterday. ‘There are theories and variations of theories—some of them creditable and some of which we have discredited.’
There seem to be five major themes, but a few of them seem to be more counterpoint than alternative. They are:
¶ A straightforward power struggle is going on for succession. In short, who will get 72-year-old Mao Tse-tung’s job as party Chairman when he dies or steps down?
¶ Mr. Mao is so ill and feeble that he cannot prevent himself from being used by rival factions of ‘leftists’ and ‘rightists’ fighting for control of the nation after his death.
¶ There is a clash—and a vicious one—between the Chinese Communist party and the Chinese army centering for the most part on how ‘professional’ or how ‘political’ the army should be. The army wants professionalism; the party wants the army politically controlled and oriented.
¶ The government, led probably by Mr. Mao himself, is worried that the Chinese masses and cadres have grown apathetic, that the revolutionary ‘machine’ is running down. Mr. Mao is trying to rekindle revolutionary spirit before he dies.
¶ For many reasons, including some of the divisive ones suggested above, Mr. Mao feels another ‘Great Leap Forward,’ as the vast 1958 shake-up of the government apparatus was called is necessary. …
‘More and more evidence,’ a State Department expert said yesterday, ‘points to the conclusion that the theory of Mao’s being used as a pawn is not correct.’”
(Source: The New York Times. This 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).
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