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An Insider's Guide to Washington's China War

Where and how the battle lines are being drawn.

BY JOHN LEE | JULY 28, 2009

When it comes to U.S.-China policy, Washington is broadly separated into two camps: the "functionalists" and the "strategists." And as the two countries have met in Washington this week, the internal debate has begun to unfold. U.S. President Barack Obama told his counterparts that Washington and Beijing should be "partners"; Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner wrote a joint op-ed in the Wall Street Journal calling for broad "strategic level discussions." Make no mistake: The functionalists are winning.

The functionalists tend to be economists and those concerned with the U.S.-China economic relationship. The United States and China are so economically intertwined, the functionalists argue, that they ought to be strategic partners as well. Win-win cooperation -- not zero-sum competition -- is a very achievable goal. Barriers between the two countries are transactional, and any tensions are usually due to mere misunderstanding. Yes, there are profound disagreements, but fix the practical problems, and many obstacles toward a fruitful partnership will eventually melt away. In fact, they will have to melt away -- out of necessity on both sides. As Clinton and Geithner put it, quoting a Chinese proverb, "When you are in a common boat, you need to cross the river peacefully."

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"Strategists," however, don't see quite such a rosy picture. For them, the U.S.-China relationship is one of strategic competition -- an irreversible rivalry already well under way. Sure, Washington and Beijing ought to improve their interactions and mutual understanding to minimize friction. But any such cooperation is tactical, nothing more. Underlying all bilateral interactions, the strategists believe, is a fundamental clash of interests and values that can be managed but never solved unless the values and interests of either Washington or Beijing change -- and that's highly unlikely.

Amid global recession, at a time when China owns a hefty sum of U.S. Treasury bonds, it's easy to see why the functionalists have the upper hand. The Chinese economy is ticking at an enviable pace that many hope will spur global (and U.S.) growth back to life. Encouraging economic growth in China has the doubly touted benefit of accelerating the prospects for domestic political reform. China could, over time, become a willing participant in -- and even defender of -- the  liberal regional order in Asia, the functionalists believe.

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But there's a logic leap here, overlooked to America's peril. As China grows richer, it is the state-controlled sectors of the economy that are growing more powerful, not the independent private sector -- which has been deliberately suppressed. Of the roughly 1,500 companies listed on the Shanghai and Shenzhen Stock Exchanges, less than 50 are genuinely private. As much as 95 percent of Beijing's $586 billion economic stimulus package, announced last November, will go to state-controlled enterprises. This makes China Inc. more powerful but does not push it closer to political reform. On the contrary, it has offered the Chinese Communist Party better and more resources to entrench its power and position in the country's economy and society.

The implications go well beyond China's borders, strategists warn. As Beijing's power grows, it will be less inclined, not more, to uphold the current regional order in Asia. In a recent study of 100 recent articles by more than two dozen of China's top strategic thinkers, I found that four of every five articles spoke of circumventing, reducing, or superseding U.S. power and ideas in Asia. China views the liberal order as one designed to preserve American hegemony in the region. Even if Beijing has so far benefited enormously from rising up within the existing order, it might not be so friendly to it once it's risen far enough.

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John Lee is visiting fellow at the Hudson Institute in Washington and research fellow in foreign policy at the Center for Independent Studies in Sydney.

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FREETRADER

4:53 AM ET

July 29, 2009

The Limits to Growth

Lee's article is at once too optimistic and too pessimistic. Too pessimistic because it ignores the fact that China is struggling with its own image and values; to use the metaphor Barbara Tuchman once used about Imperial Japan, it is undergoing a struggle between the fat totalitarian on the outside and the thin liberal man inside him who is trying to get out. As China grows the Party will have to make concession after concession to the popular will. Yes, it may become a little too populist but it is unlikely to thwart ever again resemble the totalitarian giant it once was. China is not Burma. China isn't even China, circa 1970. Its rulers will be able to stay in power only as long as they i.) deliver economic growth, and ii.) are broadly representative of the popular will. The fact that China is no longer an isolated, impoverished country with little to lose (as Mao once said) in a nuclear war is due to some farsighted leaders in both the West and in China; all of whom were pretty clearly in the "functionalist" camp.

However, the article was too optimistic in that it presumes a continued and, apparently, never ending increase in China's economic strength and clout. This cannot continue indefinitely, and may not even continue much longer. For the same problems mentioned in the article -- the corporate/cronyist capitalist model that China has created -- will prevent the society from developing into a world-beating juggernaught. Even if the economic and political systems of China can continue to evolve with the times, the country's massive demographic problems -- an aging population, huge imbalances between men and women, the coasts and the interior, dwarf those of any 'rich' Western nation and are likely to prevent China from being anything more than a very large, middle-income country. As its export-led growth nears its limit, China will start to look more and more like a larger, poorer version of Japan. Still, being a regional power, along with India and Japan, isn't such a bad thing, and should (hopefully) force the government to focus on China's own internal issues rather than expending its energy on increasing its regional influence. China has 5,000 of internally-focused history; there is little reason to doubt that that is going to change now.

Accordingly, a continued 'functionalist' dialogue would seem to be in the long term best interests of all the parties involved, the US, China, and importantly, the other Asian nations.

 

MGUNN

6:23 AM ET

July 29, 2009

who's suggestion

The irony not mentioned in the article is that the US suggests and pushes for the G2 approach and the chinese have been trying to shy away from it.

 

JPVELEZ

6:02 PM ET

July 29, 2009

Climate omissions

Yes, China’s strategic ambitions in Asia, if they are of the nature that the strategists fear, should be checked. Yes, China should be integrated into Asia’s system of alliances. Balance of power dynamics are still operating in the region, so the G2 process might undermine that system. But how exactly it would do so is left unclear in this article – is the argument that cooperating with China would give them something to coerce the US with, thereby eroding or at least constraining the U.S.’s leverage over it? I’m not convinced that regional security integration and bilateral cooperation are necessarily in conflict.

Second, non-economic discussions ARE necessary. This article completely fails to mention the other big agenda article at the S&ED – climate and energy. The Hudson institute may be keen on minimizing or ignoring the climate crisis, but the crisis sure isn’t ignoring our future.
Fortunately, both countries understand the dire security implications of climate change, the narrowing window of opportunity to act (to call climate change a long-term problem is deeply misleading when we have less than 5 years to turn things around), and, hopefully, the colossal magnitude of joint action - and yes, cooperation - that is needed to avoid the worst.

It doesn’t matter who’s absolute, historical, or per-capita greenhouse emissions are bigger – both have to plummet in the next 15 years or we’re screwed. China and the US aren’t the only key players, but they are the essential players. Exchanging views, building trust and contacts, and developing policies between the two countries is absolutely critical to confronting this colossal environmental, economic, and security challenge.

The security consequences of inaction are much greater than those of increasing regional tensions if the US privileges the bilateral relationship (to the extent that this actually happens.) Any article that analyzes US-China relations outside of the climate context is being deeply incomplete and irresponsible.

 

MICHAELTURTON

5:21 AM ET

July 31, 2009

michaelturton

An important, and much-neglected point, is that many of the "functionalists" are engaged in or involved with businesses that do business with China. In the Obama Administration, a number of key officials come out of such backgrounds (not to pick on Obama, it is a problem with our foreign policy class and China).

It is interesting that Lee calls for China to be enmeshed in a regional framework, but omits Taiwan, which Japan, especially on the Right, is coming to see as important to its security. A couple of months ago Japan reminded the KMT government here that Taiwan's status is undetermined, which caused much consternation in Taipei, where the government is rushing to annex the island to China at a breakneck pace. China can hardly be "enmeshed" without the island.

China, on the other hand, is way ahead on enmeshment, especially of India, with a string of bases and agreements and deepening involvement in Sri Lanka and elsewhere, as well as a ridiculous and aggressive claim to the entire Indian state of Arunchal Pradesh.

With China's rise, the giant shove into China's grasp that the US is giving Taiwan will appear to future historians like the compounded failure of both missed opportunity and betrayal.

Michael Turton
The View from Taiwan

 

FREETRADER

6:31 AM ET

July 31, 2009

Taiwan

You make an excellent point about Taiwan. I have many personal connections to Taiwan myself, and having just spent a week on the Island, could not agree more strongly that the people of Taiwan need to be able to determine their own future. The thought of selling out the properous, progressive, and aggressively democratic people of Taiwan in order to appease China is stomach-churning. And, yes, it is conceivable that a situation will arise where Taiwan gets unwillingly pushed into China's suffocating motherly embrace.

That said, I am naive enough to think that is unlikely. Provided the US continues to send a clear message that an aggressive move by the PRC would be resisted by the US, it is not likely to ever come to that. There are plenty of arguments for maintaining Taiwan's de facto independence, including going with the theory that both sides of the strait are still in the midst of a civil war; would a 'peace treaty' that awknowledges both a greater China and Taiwan's right to govern itself be impossible? The key element is time. If the issue is deferred for long enough, a mildly Democratic China would not contenence nuking their brethren on Taiwan in the name of national solidarity.

As Thomas Friedman has pointed out, the fact that the PRC is able to deal with Taiwan despite having some strong emotional feelings about the issue is a testament to the intelligence and maturity of its leaders (Friedman was contrasting China's stance on Taiwan with the Arab world's suicidal obsession with Israel). There is certainly a risk that, if China's economic growth sputters, a new generation of political leaders of a sullen, poorer China might try something stupid over the issue...but unless they are actually willing to use nukes (which would pretty much ruin China economically for a generation even if it didn't start a global holocaust) we are likely to continue to witness continued talk about "One China" while the two sides act independently, and sometimes cooperatively, on the world stage.

 
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