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U.S.–China Week: Space snag, the new new model, inside baseball, Chinese fugitives, deterring China (2015.02.23)

[Edited to add an omitted link.]

Thanks to all who have provided feedback, criticism, and encouragement. With this edition, I am migrating over to a new mail provider, so the sign-up page has changed. You don’t have to do anything to stay subscribed, and the unsubscribe link is still below. I’ve imposed a 1,000-word limit and adjusted the writing. And I’ve decided the archive for these newsletters will appear at my long-time blog on East Asia, TranspacificaRemember:

This week’s five items are more U.S.-focused, while China celebrates the Year of the Ovicaprid:

U.S. official: Space cooperation impossible given China’s secretive anti-satellite program

From Assistant Secretary of State Frank Rose’s Feb. 20 speech in Washington: “On July 23, 2014, the Chinese Government conducted a non-destructive test of a missile designed to destroy satellites in low Earth orbit. However, China publicly called this ASAT test a ‘land-based missile interception test.’ Despite China’s claims that this was not an ASAT test; let me assure you the United States has high confidence in its assessment, that the event was indeed an ASAT test. … China’s ASAT program, and the lack of transparency accompanying it, also impedes bilateral space cooperation. While we prefer cooperation, it will by necessity have to be a product of a step-by-step approach starting with dialogue, leading to modest CBMs, which might then perhaps lead to deeper engagement. However, none of this is possible until China changes its behavior with regard to ASATs.”

COMMENT: Former U.S. National Security Adviser Stephen Hadley has said space exploration could be a great opportunity for U.S.–China cooperation, but U.S. security concerns are deep. Meanwhile, Rose’s speech reinforces the general impression that bilateral nuclear deterrence is stable.

Hadley and Haenle: Don’t dismiss the ‘New Model’ out of hand

While the initial Chinese framing of the “new model of major country relations” fell flat in Washington over the definition of mutual respect for core interests, former National Security Adviser Stephen Hadley and one of his key assistants Paul Haenle (now heading the Carnegie-Tsinghua Center) argue that the idea should not be prematurely dismissed: “If the Chinese are unable to offer such flexibility and persistently push ‘core interests,’ China risks the United States rejecting Xi’s proposal altogether. If, however, Chinese leaders are willing to remove the references to core interests, U.S. leaders should not dismiss the proposal out of hand. The new type of major-country relations concept matters to the Chinese and to Xi personally.”

COMMENT: This is strangely one of the only pieces of U.S. commentary to seriously examine the Chinese government’s new boilerplate on the “new model,” a six-point forumla unveiled in November during the Obama–Xi summit. Most of Washington has been too busy crowing that the concept is a simple Chinese trick.

Inside baseball: Is the U.S. government bereft of China expertise? If not, does it matter?

Criticizing the Obama administration for insufficient China expertise and engagement has become something of a pastime among China wonks, especially after first-term heavy weights like Jeffrey Bader, Kurt Campbell, Hillary Clinton, Tom Donilon, and Tim Geithner left the administration. CFR’s Elizabeth Economy has had enough. The assertion that “there are no senior China experts in the relevant U.S. bureaucracies,” Economy writes, is “simply ridiculous. Evan Medeiros, Jeff Prescott, Jonathan Stromseth, David Helvey, David Shear, Sharon Yuan, and a multitude of other talented China scholars and analysts occupy senior positions in the core bureaucracies. There is no dearth of China expertise in the U.S. government.”

CSIS’s Bonnie Glaser, who is quoted in an article Economy links to, responded on Twitter: “@LizEconomy Assume you are reacting to my SCMP comments. The perception in the region is quite different, can’t be ignored.” Economy’s response: “They say it because we do.”

COMMENT: Economy did not mention Assistant Secretary of State Danny Russel, a veteran diplomat who served in Japan and Korea, but it is a rule of Washington that experts in one country will be unhappy when key positions are filled by experts in another. Either way, the perception problem is real.

Fugitive Chinese officials in U.S. on agenda for August meeting

With no bilateral extradition treaty, the U.S. government faces a challenge as Chinese authorities seek to repatriate Chinese officials who have allegedly fled with ill-gotten wealth. A meeting on the issue already took place last month, Reuters reports, and another is scheduled for August. “There are alternatives to extradition,” the State Department’s David Luna said. Luna also said the return of stolen assets is “part of an ongoing bilateral dialogue, there are ongoing cases, and it is a priority.”

COMMENT: The U.S. government faces the challenge of standing up for its values regarding due process and fair trials while avoiding the appearance of harboring the criminally corrupt. With the Chinese anti-corruption drive in full gear, Chinese officials are pushing this issue hard.

Proposal for ‘archipelagic defense’ would encircle China with allied land forces

In a new Foreign Affairs essay, Andrew Krepinevich argues that Japan, the Philippines, Vietnam and others should, with material U.S. support, “form a collective front that deters China from acts of aggression or coercion.” If that doesn’t sound like containment, I don’t know what does. The piece asserts that China is a “revisionist power” with “expansionist aims” and uses some questionable examples in support. But the meat of the proposal is to put U.S. and allied land forces on the “first island chain” that surrounds China on the East and South and equip them to mine sea lanes and launch missiles, etc. The goal of the proposal is deterrence: “Although deterrence through the prospect of punishment, in the form of air strikes and naval blockades, has a role to play in discouraging Chinese adventurism, Washington’s goal, and that of its allies and partners, should be to achieve deterrence through denial—to convince Beijing that it simply cannot achieve its objectives with force.”

COMMENT: Krepinevich has omitted the obvious in failing to discuss China’s potential reactions to the United States forming an explicit network of allies united militarily in opposition to its exercise of power. His frame of analysis seems to assume war is inevitable and then to ask how best to prepare for it.

U.S.–China Week 2015.02.16 (Beta Issue 0.2)

Welcome to the second installment of my weekly newsletter on important developments and significant ideas in U.S.–China relations. A special welcome to the more than 3/4 of those receiving this message who signed up since the first edition. Others who are interested can subscribe here. In this edition, I have adjusted the format slightly based on insightful comments from several readers. Please send your feedback to [email protected]

U.S. Challenges China at WTO Over Export Subsidies

From U.S. Trade Representative Michael Froman’s announcement: “Let me tell you how this works: China designates certain companies in these sectors as being ‘demonstration bases,’ which is contingent on them exporting their product. Once designated, they’re eligible for subsidized services provided by the ‘common service platform.’ So, if you’re a Chinese textile firm designated as a demonstration base, you might get subsidized IT services, subsidized product design services and subsidized training services for their employees, showing them how to use yarn spinning techniques and weaving technologies. All of these services, provided for free or at a discount, undermine fair competition.” The USTR press press release lists seven sectors in which China allegedly gives export-contingent support: “(1) textiles, apparel and footwear; (2) advanced materials and metals (including specialty steel, titanium and aluminum products); (3) light industry; (4) specialty chemicals; (5) medical products; (6) hardware and building materials; and (7) agriculture.” USTR also published the formal consultation request letterCOMMENT: Note the supportive comments from members of Congress in the USTR release, and keep in mind the Obama administration is seeking “fast-track” authority to conclude the Trans-Pacific Partnership negotiations. The timing of this move should be read as politically oriented, both domestically and bilaterally. Given the friendly implications of Xi Jinping’s invitation for a state visit to Washington, this is a good time to unleash something routine but more negative, and to signal to China hawks in the United States that the administration is not “soft on China.”

Xi Jinping State Visit to US Confirmed for September

Xi Jinping will make his first state visit to the United States in September, to coincide with the UN General Assembly meeting in New York—a meeting that marks the UN’s 70th anniversary. Xi and Obama spoke on February 10, and,according to the White House: “[Obama] expressed appreciation … for President Xi’s commitment to partner in reducing greenhouse gas emissions and in achieving a successful outcome at the Paris Climate Summit this December. The President encouraged China to continue its move toward consumption-led growth and a market-determined exchange rate, reiterated his commitment to pursue a high-standard and comprehensive bilateral investment treaty, and called for swift work to narrow our differences on cyber issues.” Xinhua offered a familiar list of China’s concerns, but did emphasize the BIT negotiations as well as Paris climate talks. COMMENT: By combining a state visit with a trip to the United States for the UN meeting, Xi parallel’s Obama’s November 2014 Beijing trip for APEC and a state visit. Xi also avoids appearing to make the trip especially for bilateral purposes, as Obama did last year. Will Xi speak to the Clinton Global Initiative during UN Week?

China Internet Czar Lu Wei and Amb. Baucus ‘Are WeChat Pals’?

Last week’s newsletter noted U.S. officials were speaking up against new Chinese internet regulations that, in addition to restricting open exchange of ideas, appear to hurt U.S. IT business interests in China. Lu Wei, an official who hasemerged as the key public face of Chinese internet regulation, reportedly proposed he and U.S. Ambassador Max Baucus use the Chinese mobile chat platform WeChat to discuss Internet regulatory issues: “WeChat will be a very normal channel to exchange ideas for me and Baucus,” Lu said. COMMENT: It’s unclear what Baucus’ role is in U.S.–China Internet policy discussions, but it’s hard to think of a less serious proposal for dialogue from Lu than offering to exchange views by smart phone message. Meanwhile Obama called out China and Russia in a speech to a cybersecurity conference this week. In a section not specifically referencing China, Obama said, “American companies are being targeted, their trade secrets stolen, intellectual property ripped off.” Those American companies, with dreams of China’s 1.4 billion-person market, used to be the strongest contingency for stable China ties in Washington. Now, many have stopped seeing the point.

U.S. Congress-sponsored Report Finds PLA Lacking

A new report, prepared by RAND and sponsored by the Congress-created U.S.–China Economic and Security Review Commission (USCC), charts “China’s Incomplete Military Transformation” and the persistent weaknesses of the PLA. From the executive summary: “The first [weakness] is institutional. The PLA faces shortcomings stemming from outdated command structures, quality of personnel, professionalism, and corruption. The second set of weaknesses centers on combat capabilities. These shortcomings include logistical weaknesses, insufficient strategic airlift capabilities, limited numbers of special-mission aircraft, and deficiencies in fleet air defense and antisubmarine warfare” COMMENT: It is a rare Washington report, especially by serious defense analysts such as these, that frames China’s military development as anything but rapid and alarming. That alone makes this report worth a skim. The title recalls Minxin Pei’s 2008 book China’s Trapped Transition, which is particularly relevant on the first challenge. Pei argued that, absent institutional reforms, China’s economic transformation could not fully succeed. Will the current anti-corruption campaign and PLA reforms be enough to overcome institutional obstacles?

Argument: China, Through Afghanistan Moves, Shows It’s OK Being No. 2

Following reports that China is stepping up its role in Afghanistan as the United States draws down, University of Warwick’s Shaun Breslin argues China is increasingly at home taking on a role providing international public goods—in this case attempting to contribute to stability in Afghanistan. Breslin’s provocative thinking: “The challenge for China is not (yet) how to replace the US, but how to act as its No. 2. In the case of Afghanistan, the No. 1 seems relatively comfortable with a greater Chinese role. But it’s not always the case that the No. 1 seems amenable to accommodating China’s further rise. Where it isn’t, China has begun to take action to build its own alternatives. So if the US won’t ratify changes to voting power at the IMF that would give China a greater say – and the power structure at the ADB continues to favour others – then China is prepared to launch its own organ of financial governance in the form of the Asian Infrastructure Investment Bank. Here we see China competing for some form of leadership by replicating existing ways of doing things, rather than trying to fundamentally challenge the very nature or essence of global governance and the global order.” COMMENT: I’m sure China would not embrace the language of “No. 2,” but the broader idea is worth a thought.

Thanks for reading! Send your comments, complaints, or conspiracy theories to [email protected], and tell your friends to sign up at http://eepurl.com/be6i2T. –Graham

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U.S.–China Week (Beta Issue 0.1)

This is the first installment of an experiment. Each week, I plan to pick five of the most important news developments or pieces of commentary on U.S.–China relations over the past week and send them along to people who subscribe here.
Two views of reality on bilateral military ties

First, from The Wall Street Journal, “Pentagon Rules Out Aircraft Carrier Visit to China“: “Col. Steve Warren, a Pentagon spokesman, said U.S. and Chinese officials met Thursday to discuss military exchanges over the coming year to build on previous efforts, but said the U.S. has ruled out a visit to China by a U.S. carrier.”

Second, from China Daily, “Chinese Navy officers return from US tour“: “A delegation of Chinese People’s Liberation Army Navy officers returned to Beijing after a visit to US Navy facilities, the first extensive exchange between operational officers of the two countries, China News Service reported. … ‘The visit has a positive role in building a new model of major power relationship and boosting the military relationships between China and the US,’ said Zhang Junshe, the head of the delegation. … A Pentagon spokesman described the meeting as “an important component of the broader program of engagements between the two nations’ militaries, which seeks to foster sustained and substantive dialogue, deepen practical cooperation in areas of mutual interest and focus on enhancing risk-reduction.”

COMMENT: The timing of the Pentagon’s announcement that there will be no carrier visit (for now) makes it look like this letter from Sen. John McCain made a decisive difference. I would caution that this is not a cancellation of an existing plan but a statement a new plan for a carrier port call in China is not currently in the cards. Remember, however, that a top Chinese general has already visited a carrier, last year. The phrase “ruled out” does not appear in quotes in the WSJ report, so it’s hard to assess the strength of this signal.
US Officials: ‘China’s Undermining an Open Internet’

Writing in Politico: “[A]spects of China’s actions, including the direction of their recently announced regulations—which have been billed as a means to promote better cybersecurity—are not the answer. China’s new rules require technology companies doing business with banks to demonstrate that their products are ‘secure and controllable’ by, among other things, making their source code available to the Chinese government, providing the Chinese government with back doors in software and hardware and requiring localization of foreign intellectual property to China. Not only are these regulations inconsistent with international cybersecurity best practices, they are anticompetitive trade barriers. … Our companies should be able to sell their innovative products in China, and innovative Chinese companies want to do business here in the United States.”

The authors: “J. Michael Daniel is a special assistant to the president and the cybersecurity coordinator at the National Security Council. Ambassador Robert Holleyman is the deputy trade representative in the Office of the United States Trade Representative. Alex Niejelow is the chief of staff to the U.S. intellectual property enforcement coordinator within the Executive Office of the President.”

COMMENT: This is a prominent response by high-level but sub-Cabinet U.S. officials to recent policy moves by China regarding the IT sector and the Internet. Paul Mozur of NYT reports U.S. business groups have asked for action from the secretaries of State, Commerce, and Treasury.
‘The New Asian Order: And How the United States Fits In’

By Evan A. Feigenbaum at Foreign Affairs: “Washington’s first problem is that it cannot simply reject every pan-Asian idea out of hand, however much it may resent its own exclusion from some rooms, conversations, and agreements. Indeed, the proliferation of Asia-only pacts and institutions over the last two decades has won support in more than a few Asian capitals, even in countries that are ambivalent about China’s rise and among U.S. allies and partners. A strategy of nyet, therefore, is almost certain to backfire. And Washington runs the risk of appearing hypocritical by insisting, for example, that it can have the North American Free Trade Agreement or seek a Free Trade Area of the Americas while telling Asian countries that they cannot pursue their own intraregional agreements.”
‘President Xi of China to Make State Visit to Washington’

From the The New York Times: “No date has been set yet for the visit, Cui Tiankai, China’s ambassador to the United States, told reporters over the weekend, according to the official China Daily newspaper. Mr. Cui’s announcement came after Susan E. Rice, President Obama’s national security adviser, extended an invitation on Friday to Mr. Xi and Prime Minister Shinzo Abe of Japan to come to Washington for a state visit. Ms. Rice also invited President Park Geun-hye of South Korea and President Joko Widodo of Indonesia.”

COMMENT: The invitations are apparently for “this year,” and all eyes will be on the sequencing and timing. Will Abe come before Xi? Will Abe come to close out TPP negotiations? For U.S.–China relations, however, this means the tempo of top-level interaction is staying relatively high—good news for those pushing to lock positive developments and minimize the negative before the presidential election season enters full swing.
Kevin Rudd: ‘How Ancient Chinese Thought Applies Today’

A somewhat recent speech published on Huffington Post: “The basic reality is that as China’s economy grows and supplants the U.S. as the largest economy in the world, and as China gradually begins to narrow the military gap between the two over the decades ahead, there is a new imperative for a common strategic narrative for both Washington and Beijing. … Therefore I argue the relationship needs to consider a new strategic concept for the future that is capable of sufficiently embracing both American and Chinese realities, as well as areas of potential common endeavor for the future, and to do so in language which is comprehensible and meaningful in both capitals.”



I’ll say it again: This is an experiment. Comments on everything from content to format are very welcome. Please forward this message to any colleagues and friends who might be interested. I can’t guarantee I will keep up with my weekly schedule, but that’s the plan. Mockery is very welcome if I fail to follow up. –Graham ([email protected])