You can breathe now

For any of you that were holding your breath in the hopes that China would approve of tough sanctions, you can breathe now. Not because China will support them though.

From a press release two weeks ago, the Chinese have made it clear (if it wasn't already), that targeted sanctions will not receive Beijing's support. Now you're probably saying "But what about the progress made at the UN?" Well, sanctions are being developed, but they will fall far short of the targeted ones on petroleum exports that Washington wants. The only thing a UN Security Council resolution will do at this point will green light the tough sanctions Obama really wants for passage by Congress. And since the U.S. already has imposed several sanctions on the nuclear wannabe, it's doubtful that they'll work. I fully expect that Iran will become a nuclear state within my lifetime.

I won't claim to be an expert on Iranian affairs, but the nuclear issue seems to be the only thing Western countries are desperate to talk to Iran about. Moreover, rights to nuclear technology present a rally around-the-flag topic that Tehran can use to remain in power. Seems to me that it might be worthwhile to try to buy off Iran as opposed to whacking it with sanctions. Some people may resent rewarding Iran for its negative behavior, but sanctioning Iran is a lot like withholding a child's allowance until they behave. Sometimes it takes corporal punishment. However, no country (with the exception of Israel) is advocating a military strike.

I'll close off with a general criticism of sanctions. In order for sanctions to be effective, the targeted country needs to know what it should do to have them terminated. If one looks at UN Security Council resolution 1737, it says that Iran must halt all R&D on nuclear technology and enrichment. Considering that Iran needs alternative sources for energy production because of the sanctions currently placed on it, this is asking A LOT. No wonder Iran is pursuing what is in its interests.

Gotta have a sense of humor

Xinhua has an article covering Obama's decision to pursue the development of a missile that can hit any target on the planet within an hour. You can see it here. Now there has been a fair amount of criticism for his decision, as seen in the Huff Post and Foreign Policy.

What made me chuckle was the picture chosen for the piece: Obama accepting the Nobel Peace Prize at Oslo. Regardless of one's position on the new missile, you gotta hand it to the Chinese for picking the right picture.

So what does this mean for Sino-US relations? In the greater scheme of things, very little. The Chinese military is already modernizing its forces while the US remains anxious about China's military intentions. This program, if it goes forward, will only serve the purpose of providing more evidence for those voices in China that view the US as a threat.

Things to come?

I just finished digesting an op-ed piece I read in the Business Times out of Singapore. It describes how lucky China is to be at the center of geopolitics now and going forward, as its development will fundamentally change the international landscape. While I could quibble with that, instead I'll turn to the author's (Robert Kaplan) projections on how the U.S. will be impacted.

Kaplan in his piece towards the bottom mentions Taiwan as follows:

"Beijing is also preparing to envelop Taiwan not just militarily, but also economically and socially. How this comes about will be pivotal for the future of great-power politics in the region. If the US simply abandons Taiwan to Beijing, then Japan, South Korea, the Philippines, Australia and other US allies in the Pacific Ocean will begin to doubt the strength of Washington's commitments."

While I don't disagree that Beijing is trying to isolate Taiwan, it's a far stretch to say that the U.S. will simply abandon Taiwan in the future. There is still substantial support for the island-bound democracy in Congress. Furthermore, China could be very different politically if and when Taiwan becomes part of the PRC. From my own perspective, China would only attack Taiwan when it felt that its economic development was complete and it could withstand any economic blowback from conflict in the Taiwan Strait. That won't happen for at least four decades. A lot can happen between now and 2050.

Kaplan then signs off with:

"Still, the very fact of China's rising economic and military power will exacerbate US-Chinese tensions in the years ahead. To paraphrase the political scientist John Mearsheimer, the US, the hegemon of the Western Hemisphere, will try to prevent China from becoming the hegemon of much of the Eastern Hemisphere. This could be the signal drama of the age."

If that were true, then shouldn't the U.S. just attack China now? You know, follow through with preventative war? Kaplan's basically saying that China's continued development is a zero-sum game for the U.S. I don't buy that at all given the economic relationship. Americans are able to consume inexpensive goods from China in a time of economic difficulty. I do not disagree with Kaplan that China's military modernization will cause angst in Washington, but it is very premature to even project armed conflict between the U.S. and China.

Admin note: Finals are fast approaching. As such, don't expect a lot of posts this coming week. Will be back to normal after May 3rd.

Walk, don't run

I can't help but be impressed with The Economist. We all know it's an excellent news source, but Kal certainly gets his point across very well with his latest piece. He nails it right on the head when China says there are no clear options in response to Iran's nuclear program. Why you ask?

The last thing China wants to do is support sanctions tough enough to bring down the Iranian government. After all, it was only last June when opposition protesters were shouting death to Russia and China. Beijing can work with the current regime in Tehran and doesn't want a change in management. Now some people are suggesting that China's commercial interests are dictating its position on Iran. I'm quite skeptical about economics playing significant a role, as trade in 2009 between China and Iran amounted to only $15 billion, while almost $1 trillion between the U.S. and EU combined. Those numbers alone would suggest China would be better off cooperating.

So does Beijing want Iran to have nuclear weapons? Not if it destabilizes the region. Saudi Arabia and the other countries in the region certainly don't want their Iranian neighbor to have nuclear weapons and would have little problem increasing deliveries to the West at China's expense if they felt it was to blame. The issue at hand though is China likes the status quo - it gets everything it needs from the world to focus on its domestic development. To agree to sanctions would disturb the balance China enjoys. As Kal's piece points out, there aren't any clear options for China that satisfies the West's demands and allow it to focus on development. Until such an option presents itself, the Chinese government will drag its feet.

P.S.

The same bottom line can be applied to China's position on North Korea. The Chinese government would rather allow things to progress naturally rather than take any action that carries more risk than reward.

The U.S. is still the top dog

Foreign Policy is running an article that I think illustrates American preeminence in the international community. Looking at the list of the 40+ countries and what they want from the United States, it is hard to believe speculation that United States has suffered from a loss of stature within the international community.

My logic (and it may be flawed), is that if the United States was viewed by other states as weaker and not a useful partner (or means) in pursuit of their goals, then fewer countries would be in attendance. Moreover, one wouldn't see the diversity of "wants" when the foreign dignitaries get their time with American officials. Compare this to when foreign officials go to China, economics tends to be the overriding topic of discussion.

However, my logic applies as long as the current international system remains in place. Now how long that will be is a topic of frequent debate within political science, meaning that there is no firm answer. The problem in defining a specific period of time in which another state (read China) could be the dominant power within an international system is that what we know today is more defined than ever before in history. In no time prior to post-WWII has the international community had the breadth and depth of cooperation it has today. One only needs to look at the United Nations, World Bank, IMF, and the G20 to gain a sense of the interdependency. The United States lies at the heart of each of those bodies (the G20 less so than the other 3). For China to edge the United States out of its supremacy would be no small feat and would require lots of time (50+ years). It could be even longer if the international community does not share the same values of China.

So for those of you who doubt American influence, sorry to pop your bubble of depression (or joy depending on your feelings of American supremacy). The world still revolves around the U.S.

Update on China-Taiwan FTA

Looks like Taiwan and China will be signing an FTA this June according to The Washington Post. I look forward to reading the document, as whatever wording is used to address Beijing and Taipei could possibly be used in a future peace treaty between the two parties.

Besides a warming of relations with Beijing, the FTA will also open doors to similar agreements with other countries, notably Asean members. The United States will want to ink one as well, knowing that Beijing won't protest since it signed one with Taipei first. If I was an American government official, I'd certainly want to get it done within a couple of years to maintain (if not increase) trade and hence American influence in Taiwan. Why do you ask?

Quite simply the China-Taiwan FTA will either maintain or increase Taiwan's dependency on Chinese trade, potentially providing Beijing with additional leverage over the island. The United States may not yet be ready for Taiwan to assume a closer orbit around the mainland, therefore having an FTA with Taipei would at the very least maintain the status quo.

Is that a good policy? Depends on who you ask. However the U.S. government will find it increasingly difficult over time to maintain the status quo, especially considering China's military modernization. The U.S. would be hard pressed to sell F-18s or nuclear submarines to the island, which are fast becoming the most basic armaments in the U.S. military. Economically, China is likely to maintain annual GDP growth over 8% for the next several years and could easily show favoritism to Taiwanese companies in an effort to limit America's options.

I understand that kicking the can is always the preferable policy decision when confronting lose-lose scenarios. However I can't help but wonder if U.S. Taiwan policy will soon face a rather large wall.

Hu goes to Washington

Chinese President Hu Jintao will be in Washington shortly to discuss a wide range of issues with Obama. Politico has a good piece on the occasion, so I refer you all to it here as opposed to detailing it myself.

I'm looking forward to the statements issued during the time that Hu is in the U.S., as they'll provide some idea of where the PRC stands on things. What will be most interesting in my opinion is the disarmament discussions, as the PRC is rapidly increasing its nuclear arsenal (may have 700 nuclear missiles by 2020, compared to the 1,700 held by the U.S.). Moreover, Hu's comments on the issue will solidify the Chinese position on Iran's nuclear program.

Break out your Chinese green tea and stay tuned!

Bought in China

The Economist in this week's issue discusses what it sees as a transformation in American buying habits. If its predictions are correct, that Americans will consume less and produce more for global markets, Chinese companies will no doubt experience some ripple effects. The Economist points out that currently strong American exporters are more likely to benefit from a lower dollar and increased consumption. So what changes can one predict in regards to Sino-US trade?

Data from the U.S. Census Bureau illustrates the decline in bilateral trade that has taken place up to this point in time. The trade imbalance for 2009 was similar to that in 2006, dropping from a high of $268 billion in 2008 to $226 billion. If the U.S. buys less and the Chinese buy more (assuming the Chinese central bank allows the Yuan to appreciate in value), then the gap could shrink even more.

This partly why some American politicians are calling on the Chinese government to allow their currency to gain in value. If the Yuan grows stronger against the dollar, Chinese exports are more expensive in the U.S., while American goods in China are cheaper. However, if the Yuan's value stagnates, then the American deficit with China will only decrease as a result of lower American consumption of Chinese goods.

There are some academics who think that China will relax its hold on the RMB and allow it to gain in value. While such predictions may pan out, I'm fairly certain that the Chinese will not allow their currency to appreciate as much as American politicians and others in the international community would like. The general consensus is that the RMB is undervalued by 25%. I'll venture to say that the Chinese central bank will allow 5%-10% over the course of the next year. Again, no where near where people would like, but it's a start.

Growing pains

Deng Xiaoping when he was in power instructed his successors to focus on development and not take a lead in global affairs. This was sound advice at the time, as China was not nearly as developed as it is now. Deng was no doubt influenced by the foreign policy carried out by Mao during the 1960s, where Mao was making a grab for leading the global socialist movement and not making many friends because of it.

Since Deng's passing in 1997, the PRC leadership has followed Deng's advice amazingly well, hardly straying from it. However, it has led to the growing disenfranchisement within the international community, particularly in Europe and the United States. The problem is that those two powers want the PRC to play a larger role in international affairs, as seen at Copenhagen, Iran, and North Korea. However, with the exception of North Korea, the PRC has shown little interest in doing anything that would go against Deng's sage advice.

The CCP is still narrowly focused on developing China, which is not totally unreasonable. However, the PRC's rise will be greeted with continued less enthusiasm the longer it takes the CCP to develop a foreign policy that is conducive to both development and active foreign diplomacy. Will it be difficult? Absolutely, we're seeing it right now. Can the CCP pull it off? No doubt about it. It'll just take some time.

Overview of the PLA

Foreign Policy has an article on the People's Liberation Army (PLA) and addresses several concerns people may have about it. I think it is an excellent article and that everyone should read it.

China resource

I was reading the Huff Post when I came across a Eric Anderson. I highly recommend his posts as they're quite good. Moreover, he's what one could consider an expert on Sino-U.S. relations.

Balancing act

As a result of U.S. arms sales to China, the PRC government announced that it would sanction those American companies that participated. Like many others, I was curious to see how this would play out.

Turns out that two weeks ago (when I was sick), China announced that it was going to buy 20 passenger planes from Airbus, the major European aircraft manufacturer. Now on the surface this may seem like a snub to Boeing, but in all actuality it doesn't mean much.

According to Boeing, increase air travel in China will require Chinese airlines to take delivery of 3,800 additional passenger planes by 2028. Airbus is estimating that China will require 3,200 additional aircraft to meet the demand. (The difference between the two is that Boeing assumes Chinese airlines will use smaller aircraft like the 737, while Airbus is betting on larger aircraft equivalent to the 767.) Either way, Chinese airlines will need a lot of planes in the next 18 years.

Precisely because of this huge demand for aircraft, the Chinese airlines nor the Chinese government can play favorites. If the Chinese government were to completely expel Boeing from the Chinese market for passenger aircraft, it would have no choice but to deal with Airbus (which could raise its prices as a result of its major competitor being locked out). That would not be good for Chinese airlines. Not to mention that by hurting Boeing, it hurts the Chinese manufacturers Boeing subcontracts to for the production of aircraft parts.

So far it looks like the sanctions the Chinese government was talking about amount to very little. This could change in the future as Chinese aircraft manufacturers increase in capability and quality, but I expect that not to happen for at least another ten years. While on the surface it looks like China has a lot of weight, this is an example of how little it can do despite its rhetoric.

More sales in the pipeline?

As recently reported, the United States sold arms worth $6.3 billion to Taiwan, the first since the early 1990s when Bush Sr. was in office. However, it seems that there could be another sale in the works if Congress has its way.

Defense News is reporting that Congress may be positioning itself to sell Taiwan additional weapons, specifically F-16 C/Ds that were left out of the recent sale. It's no secret that the bulk of the ROC air force is old and requires spare parts. While I wouldn't be surprised if the "defense industry analyst" was a Lockheed Martin employee (who makes the F-16 aircraft), they raise a fair point that the production line can only be maintained for so long. If it were to close without F-16 C/Ds sold to Taiwan, and if the U.S. wanted to replace ROC aircraft at some point in the future, then it would only be able to sell Taiwan the F-18 manufactured by Boeing.

While Beijing would protest the sale of fighter aircraft to Taiwan regardless of the model, the Chinese leadership would no doubt prefer F-16 C/Ds be sold as opposed to the more advanced F-18. The question is how many aircraft would be sold? Taiwan has requested 66 F-16 C/Ds since 2006, so if Congress gets it way, that amount could be sold. However, does the Obama administration want to take the risk of selling additional weapons to Taiwan at expense of Sino-U.S. relations? That I am not sure about. It could go either way, as Obama may want to stand up to China or use it as a chance to cultivate trust with the PRC. What do you think?

Cloudy with a chance of thunderstorms

No, I haven't sacrificed my studies at Fletcher for a career in meteorology, nor am I trying to predict any weather. The title instead is my expectation of Sino-U.S. relations for the next few years.

The New York Times is running a story about the differences in priorities between China and the United States. I think they hit the nail on the head about why the United States and China can't seem to agree on anything, and made a plausible argument for why China will come around and do things the American way (China doesn't want to be seen as the bad guy in the global community).

However, the piece itself is short on why the Chinese government maintains its current position on the variety of topics raised (Renminbi valuation, Iran, and American job creation). As I see it, China can't change its policies on these issues because of domestic concerns. If China were to allow its currency to appreciate (read increase) in value, then its exports would become more expensive, something that companies and consumers don't like. On Iran, China enjoys a strong position serving as the only major economic power investing in the country. As a result of the sanctions and growing Russian dissatisfaction, Iran increasingly relies on China for investment. Moreover, China benefits from the natural and energy resources it is able to extract from the country. China would love to see job creation in the States to increase demands for its exports, but it won't sacrifice Chinese jobs to make it happen.

The article mentions China's sovereignty concerns for not cooperating, but I think this misses the point. The Chinese government may very well use the sovereignty excuse for not cooperating, but really it's because the changes required of it would harm the Chinese economy and by extension domestic society. Going forward I think we can expect to see more of these instances, where deriving mutual benefit will be more difficult. However, just because something is difficult does not mean it isn't worth pursuing. After all, you don't let cloudy skies prevent you from getting things done. Neither should the American or Chinese governments.

The Sino-US Relationship

Foreign Policy is running an article about the Sino-US relationship, notably where there are disagreements and the likelihood of them being resolved. I think they did an excellent job listing them and providing explanations.

However, I disagree with them on their last point: that more American trade with China will make it a freer society, therefore Google should stay. Truth be told, I'm in disbelief that such a publication would actually say that (even scarier if they believe it). Increased economic engagement with China will not open their society. If we look back to the reforms first initiated by Deng Xiaoping, he purposely withdrew government and party from the daily lives of the Chinese people because of the mistakes made by Mao during the Cultural Revolution and figured out that the key to a stronger China lay in modernization through economic development driven by demand, not the government. Moreover, as a victim of the persecution under Mao's China, Deng had strong motivations for making sure it never happened again. Economic trade has not liberalized China - the CCP has made the decision to let the market function (to an extent) and is allowing its citizenry to become wealthier. As such, any increased freedom for the Chinese will come as a result of a conscious decision by the CCP or revolution, not economic engagement.

Much ado about nothing something

The American press, along with the BBC, are making a big deal about the recent sales of US arms to Taiwan. Granted it's newsworthy, however, this sale has been in the pipeline since the Bush administration and Chen Shui-bian was president (who is now in jail). Bush delayed doing anything about it because of Chen's push for Taiwan independence and local Taiwanese opposition (read the KMT or Nationalist Party) withheld approval to the purchase. China's response is par for the course and will result in the same old freeze on military-to-military exchanges. Now would be a good time to yawn.

Update (5:22PM)

Looks like China is putting a new spin on the arms sales. Apparently they're going to punish the American companies who are producing the arms being sold to Taiwan. No further details are being provided on the new punishment, but contracts could be modified or canceled. It seems the company that has the most to lose is United Technologies, as they have quite a bit of commercial (read non-military) business in China and are building the Black Hawk helicopters. Boeing probably won't be impacted too much, as they're only delivering a few Harpoon missiles. Should be interesting to see what happens.

Part of me wonders how much of this is for show and how much is real. Beijing has to realize that Taiwan being within the orbit of the U.S. is not the worst scenario (it could declare independence). Granted American involvement in the Taiwan issue has some overtones of imperial intervention, but it's far less than what the British, Russians, or Japanese did to China in the late 19th/early 20th centuries. Moreover, American involvement restrains Taiwan from doing anything that would force China's hand in attacking the island (independence or developing nuclear weapons). Not saying American intervention is right or wrong, but things could be far worse.

Busy busy busy

Things are a little busy on my end as next week I'm presenting a paper at Columbia University's graduate student conference on East Asia. Putting the final touches on my presentation and practicing quite a bit so everything goes smoothly.

My research question was whether American arms sales to Taiwan restrain them from developing nuclear weapons. It was a lot of fun researching the issue as I had little knowledge about Taiwan's nuclear weapons program (or civilian for that matter). Turns out the PRC developing nukes was a major motivation for the Nationalists to pursue a nuclear deterrent (along with warming Sino-US relations in the 1970s).

It highlights a major problem in the Sino-US relationship: the arms sales themselves. Beijing considers the island a renegade province and deeply resents American involvement in the matter. However, the United States for decades has acknowledged China's position on Taiwan (not the same as agreeing with it though), yet continues to sell weapons to the ROC all the while saying that the matter of reconciliation/unification is between Beijing and Taipei. Yet as history has shown, if the United States gets too friendly with Beijing, Taiwan gets nervous and resumes its nuclear weapon program. Although at this point in time I wonder how warm relations between China and the US could get considering their current disputes over trade, climate change, and China's growing influence in general.

欢迎！／歡迎!

Welcome!

The United States established contact with imperial China in the late 1700s through merchant sailors. Later in the 20th century it would establish relations with two governments of China, the Republic of China (which is alive and well on Taiwan) and the People's Republic of China, simply known as China today.

So why the blog's name? Simply put the United States has historically known "China" as a relatively weak country since it was founded in 1776. However, with China's growing influence the United States is forced to factor in its response or position on any policy issue. Essentially, China's development is requiring a fundamental shift in how the United States perceives and reacts to the growing power. Therefore, I argue that the United States is getting to meet the real China for the first time.

This blog is an attempt to understand the dynamics at play in the Sino-US relationship, examining both the short and long-term. I'll mix in a lot of history, for only by looking at and understanding the past can one appreciate the current situation.

As I post news articles and my thoughts, feel free to add your comments. If by chance you disagree with my opinion, say so and include a link to a source that was used to base your opinion on. That way I can understand where you're coming from and learn something new.

Enjoy!