Category Archives: China

“Pivots” and Great Powers – Both Sides Now

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I could not resist – and a big thanks to Joni Mitchell and Judy Collins for the reference to their famous tune.  I f you recognize the reference – well you know …

In 2009 I think  – the draft of this book chapter was done in 2008 – Zhang Yunling of CASS – “Mr. APEC” in China –  and myself wrote a chapter on the regional dimension in the US-China relationship in an edited volume by Gu Guoliang and Richard Rosecrance called Power and Restraint: A Shared Vision for the US-China Relationship.   Zhang Yunling and I tried to capture the US-China relationship this way at the time:

China’s strategy is based on three principles: first, China recognizes the United States as a superpower; indeed the current sole superpower; second , China will cooperate with the United States in as many areas as possible; and third it would seem China will continue to increase its strength, including military strength, and raise its status both regionally and globally.  From China’s perspective, as long as the United States recognizes and takes into account China’s interests, China is unlikely to challenge the overall US leadership. In the final analysis, the most significant question for China is, how can it balance its support for democracy, domestically and externally, with the defense of sovereignty whether Taiwan, Central Asia or the Asia-Pacific generally?

Well, that was then and this is now!  It would not appear to me that these constitute the bedrock “rules” that define this most important bilateral relationship.  But let’s take a look at the rules and where the relationship is today.

The context has changed a great deal since the full onset of the global financial crisis of 2008.  It appears that the “Chinese foreign policy elite” – I am not sure exactly who these people are – but there is a view from western experts – I know these folks far better – that there is a from Beijing the view that the US is in decline and that it is losing its hegemonic status.  Furthermore, and more ominously, as a result in  part of the US Administration’s “Asian pivot”, these same China experts have a heightened suspicion that the US is unwilling to adjust to its relative decline and China’s rise.  As Brooking’s Kenneth Lieberthal recently described it at ForeignPolicy.com:

In Chinese eyes, the United States has always been concerned primarily with protecting its own global dominance – which perforce means doing everything it can to retard or disrupt China’s rise.  That America lost its stride in the global financial crisis and the weak recovery since then while China in 2010 became the world’s second-largest economy has only increased Beijing’s concerns about Washington’s determination postpone the day when China inevitably surpasses the United States to become the world’s most powerful country.

So it would seem that China has drawn back from the view that the US is the only superpower. Instead many China experts now suggest that China is a global power as presumably is the United States.  Quite honestly I haven’t s clue what a “global power” is – and I suspect it is simply a way for Chinese experts to assert that China is a superpower – without having to actually proclaim it.  There is little question that both states are great powers – lord knows no one would question each being in the G20 etc., but then including India also makes sense. Clearly India is not yet a “global power”.  It seems to me to be disingenuous to manufacture this new category – especially if you compare the two by military or economic metrics – it ain’t so.  I think too many experts distort time lines.  It more than a decade, possibly two, before China’s economy will match the US so let’s not conflate that future with the present.  And as for the military and strategic partnerships – not even close.

Though it is true that the US and China have sought to cooperate in a number of critical areas – especially in the global economy, notably China’s leaders urging collective effort to resolve the eurozone crisis and to avoid grater turbulence – in other areas there is no collaborative spirit.  Most puzzling is China’s determination to support Russia to the bitter end on Syria.  It is unnecessary and with little that would suggest that there is a Chinese interest in playing “poodle to Putin”.

More contentious are the growing demands and “police” encounters in the South China Sea between China a number of Asian countries.  China has asserted a broad territorial claim that encompasses much of the South China Sea.  In addition there are territorial clashes between China and the Japan in the East China Sea. Many in Washington have declared a new China assertiveness threatening regional stability.  The US has meanwhile – without declaring sides on the territorial claims, has insisted on freedom of navigation and a multilateral approach to resolving the territorial demands.  China has in turn rejected this approach – and at least for now has insisted that these territorial claims should be settled by the contending parties only – bilaterally in other words.

The new assertiveness has enabled many in Washington to focus on the growing military modernization in China’s armed services and calls to meet such military challenges.  The point here is that the so-called new assertiveness has drawn close attention to China’s military threats and the consequences of the growing military modernization.

Where then do the two great powers need to go? Here are some actions that the two can adopt that are likely to lower the temperature on the competition, lead to a new set of rules and can be accomplished largely without the other:

  • Both take a deep breath and limit the degree of hedging each proposes for the other.  Hedging focuses on worst case and frequently results in outcomes  each is concerned to hedge against;
  • The US de-emphasize rhetorically the Asian pivot; work more quietly with ASEAN allies to generate a Code of Conduct acceptable to both sides;
  • China turn down the volume on the South and East China Seas and at least in the case of the South China Seas propose concretely joint development agreements with the parties – Vietnam, Philippines, and others.  These agreements enable the parties to side step the territorial claims for the present; and
  • China needs to rethink its Syria position in the UN and consider abstention as opposed to veto.

I was fortunate enough early in the week to hear former Australian Prime Minister and Foreign Minister speak on the Rise of China.  If you take a look at the NewStatesman.com the article entitled “The West Isn’t Ready for the Rise of China”, the piece fairly reflects his remarks at the Munk School of Global Affairs.  I thought I’d just provide a quick sense of the approach that Rudd brings to this critical relationship:

So, what then is to be done?  Is it possible for the west (and, for that matter, the rest) to embrace a central organizing principle as we engage China over the future of the international order?  I believe it is.  But it will require collective intellectual effort, diplomatic co-ordination, sustained political will and most critically, continued, open and candid engagement with the Chinese political elite.  So, what might the core elements of such an engagement look lie?

I will turn to Rudd’s perspective.  This should allow me to describe the new rules of collaboration required for the US-China relationship.

For this particular “thought exercise”, I will try and describe what are the rules of behavior that can ensure that the competitiveness and rivalry can be contained – that rivalry and competition do not escalate to heightened and sustained rivalry – and then even to conflict.

 

Image Credit: abc.net.au

“Pivots” and Great Powers – From the Other Side

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In my earlier post – of close to the same name – I mentioned that it was Minghao Zhao’s earlier NYT op-ed, dated July 12th, “The Predicaments of Chinese Power,” that got me thinking again about the US-China relationship.

Now as I pointed out in this earlier blog post,  Zhao is currently a research fellow at the China Center for Contemporary World Studies, the think tank for the International Department of the Central Committee of the CPC.  I learned subsequently from my colleagues in China that he graduated from Peking University (Beida) with an MA and is also the Executive Editor of the China International Strategy Review a publication from the School of International Studies (SIS) at Beida.

Okay what did Minghao Zhao have to say?  Well like any good international relations specialist, Zhao focuses a lot on power and the various forms it takes in the global governance system.  Summarizing Zhao,  he suggests the following:

  • It remains a controversial issue as to what China’s grand strategy is, or should be;
  • When we measure China’s power we find that it is powerful on some measures – population, global trade, gross domestic product but is woefully inadequate on per capita GDP and near the bottom on the human development index;
  • Looking at the employment of power and influence, China has a long way to go, say in comparison to the US, whether it is hard power or especially “soft power”;
  • China is, as described by Zhao, “

… still unfamiliar with these new power games. The complex web of national security threats facing China underscores  the need for greater efforts to integrate the strategic tools of diplomacy, defense and development.  What is more, China has not yet found a way to utilize “civil power” in achieving sustainable diplomatic successes.

  • China still has a way to go to find a strategy that will reassure other countries – read that as its near neighbors – especially in the South China Sea and also the greater powers – Japan, Korea and especially the United States.  China has also not learned – here I am not sure China is the only great power that suffers from this, read that as the United States – to practice multilateralism where the powers share responsibility in deciding and acting.  Indeed Zhao summarizes well this gap between between its power and its intentions:

While the Chinese truly believe in their declared peaceful intentions, they have yet to convince others especially the United States  and Asian neighbors.  China needs to boost its participation in multilateral forums and readjust its approach to stress the sincerity of its commitment to peaceful development.

  • Finally – and here I suspect Zhao draws his conclusion from having observed the United States over the past few decades – China needs to restrain itself.  If I can summarize here the world needs to take a “deep breath” and avoid adopting a pose of exaggerated fear given China’s rise and the growing power China has, and is acquiring.  At the same time China’s leaders need to restrain themselves when it comes to the territorial disputes that now plague China on its maritime borders and to constrain the nationalist impulses that pulse through the China blogosphere and presumably more broadly in Chinese society.

As our colleague describes it:

An exaggerated fear of China’s capacities and intentions can itself become a couse of conflict and lead to tragic results.  China’s entry into the world must be accompanied by a new dynamic of mutual accommodation with that world.

For  a number of years many China observers asserted that Chinese policy followed Deng Xiaoping’s historical dictum: 韬光养晦 – taoguang yanghui – concealing one’s capabilities; biding one’s time to have an achievement.  Though the phrase is not free of controversy over its meaning, most agree that at least in terms of strategic policy that China shouldn’t be overtly aggressive and take a forward and assertive policy stance.

Now there has been a Washington view since about 2010 that China’s restrained policy stance – or what I would suggest as a junior partner role – has come to end.  Because China is a global power – this is a phrase that Minghao Zhao adopts and is expressed by many experts though I think it is a highly problematic description of China currently – and there is a strong current of opinion in China that the United States is in decline, and in fact that China has been too defensive – that China could, and should, now be more assertive. Indeed because of this perceived new Chinese assertiveness, at least in the region, that US policymakers have articulated this Pacific or Asia pivot, as described in the earlier post.

So it seems we are now witnessing an emerging gyre of “action and push back” by the United States and China.  Is this the best way in fact to characterize the US-China interaction.  Well I don’t think we have reached this point but it is difficult to both assess China strategic policy – indeed almost everyone agrees that is near impossible to describe China’s grand strategy – and therefore to determine if the US-China is in some growing tit-for-tat strategic framework.  Certainly leaders from both countries assure each other – and the global public –  that the relationship is not of that sort and that their strategic policy continues to count on maintaining a positive engagement and collaborative policy.

So let’s examine more closely the relationship in the next few days.

Image Credit:  news.xinhuanet.com – The Central Committee of CPC

The Current Heart of China “Assertiveness” and the United States “Pivot”

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This past week ASEAN ministerial meetings popped up repeatedly in Cambodia’s capital Phnom Penh.  These meetings served as diplomatic and political backdrop to the growing clash of interests in the seas east, west and south of China.

ASEAN has been a central player in Asian diplomatic and economic affairs since its formation in the late 1960s.  But on its face this is not necessarily more than a important regional organization.  Now, however, at least since 2008, one of the key ASEAN players, Indonesia, has also become a member of the G20 Leaders Summit.  The ASEAN Regional Forum (ARF) a security dialogue forum has reached out to include key players in Asia – most notably China and the United States.  And the growing territorial claims especially, but not only, in the South China Sea have drawn in these key players to the security dialogue.  Given that there is no larger security organizational setting where not just regional powers but also the great powers engage here, the ASEAN meetings do appear to fit into the global summitry galaxy of institutions.

Much attention has been paid to the continuing tension that has hung over this region now for several years with contending territorial claims to the South China Sea by China, and various ASEAN and members including the Philippines, Vietnam, Malaysia, and Brunei and for good measure Taiwan.  There have also been clashes between Japan and China over the East China Sea.  The maritime area is a key for the global transport of goods and vital energy resources.  Over half the world’s total trade transit through the area.  And  there have been increasing signs of resource riches – especially oil and gas – in the area as well.

The clash of interests was very much in evidence at, or surrounding the 45th ASEAN Foreign Ministers’ meeting in Phnom Penh early in the week followed by the ASEAN Regional Forum meeting.  The ARF is one of the few diplomatic settings for security dialogue in Asia.  This year’s ARF meeting – the 19th –  includes not only ASEAN Foreign Ministers but dialogue countries including – Australia, Bangladesh, Canada, the People’s Republic of China, the European Union , India, Japan, North Korea, Republic of Korea, Mongolia, New Zealand, Pakistan, Papua New Guinea, Russia, East Timor, United States and Sri Lanka – 26 countries plus the EU in all.

Both meetings have highlighted the tensions between ASEAN and its allies and China. The United States has used these meetings to display rhetorical support for ASEAN countries without necessarily supporting any of the specific claims of these ASEAN countries.  The US efforts would appear to be an effort since at least 2010 to insinuate itself in East and Southeast Asia – and draw closer to various ASEAN states especially Vietnam and the Philippines.

In the South China Sea the ASEAN FM have been pushing to engage China in a long standing effort to resolve conflicts between the various states.  On Monday the FM sought to complete wording for a document to set out a Code of Conduct.  The Philippines have pressed for wording that would include measures to resolve territorial disputes and to raise the conflict in the Scarborough Shoal between the Philippines and China.

Manila appears to be leading the ASEAN push to persuade China to accept a Code of Conduct (COC) that would go some way to resolve the territorial disputes themselves. There has been a ten-year effort to complete a code of conduct which most ASEAN leaders have see as a legally binding document that would govern the behavior in the various seas and “establish protocols for resolving future disputes peacefully”. (see the WSJ “Beijing Defends Sea Claims as Clinton Visits Region” by Patrick Barta July 11, 2012)

China has been unwilling to discuss such a document signalling instead that it would be prepared only to discuss a more limited code aimed at “building trust and deepening cooperation” but not one that settles the territorial disputes, which it insist would be better negotiated with each country separately.  In the current diplomatic settings China has urged that officials leave discussions off the agenda.

For China, the collective ASEAN effort to promote a binding  COC has posed unwelcome interference in what Beijing has described not as territorial disputes between China and ASEAN but only disputes with some ASEAN states.  China has insisted that resolution of these conflicts be undertaken bilaterally.

Since the 2010 ARF meeting the United States Secretary of State has made it clear that the United States supports a multilateral solution and insists on the freedom of the seas:

Issues such as freedom of navigation and lawful exploitation of maritime resources often involve a wide region, and approaching them strictly bilaterally could be a recipe for confusion and even confrontation.

The Chinese position has remained adamant in the run-up to the ARF that US and various ASEAN positions were “deliberate hype” and intended to interfere with relations between China and ASEAN.   The Foreign Ministry continued to insist that the issue be left off the ARF agenda.

Meanwhile in the East China Sea tension rose significantly after two Chinese patrol vessels entered waters claimed by Japan. This incident followed an announcement that the Japanese government was considering buying the Senkaku Islands (referred to by the Chinese as the Diaoyu Islands).  Though the announcement was part of a complicated negotiation by the current Noda government caused by strong domestic political interests, the announcement and tensions quickly engaged both Japan and China.

A full blown diplomatic row at the ARF was only avoided when the ASEAN countries failed to reach agreement on the language of the COC.  But the tensions and potential conflict remain.

China has certainly not backed away from the its diplomatic positions.  And as the most recent East China Sea incident with Japan suggest is prepared to exert measured “military” action to underpin its assertion of interests.  Meanwhile has expressed a view that inserts itself into the regional conflict – and likely garners ASEAN country support – but at a low immediate cost while not directly challenging China – yet.

For the moment US-China engagement retains the “upper hand”.  But the position could well sour were military action – even though likely of a rather limited sort and unlikely to be between the US and China – were to occur.

Miscalculations and mistakes happen.

Image Credit: Stratfor 2009

Back in Dalu

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Beijing memories

It has probably been too long – but I am writing this post as I land at Beijing Capital Airport.  With a day of meetings ahead of me here in Beijing – mainly at Tsinghua daxue – and then on to Shanghai for a conference at the Shanghai Institutes of International Studies (SIIS), I gird myself for the traffic – Beijing Memories.

But in the end you ignore the traffic – whether here in Beijing or in Shanghai.  And you relish the vibrancy and activity.  The Shanghai Conference is titled, “Creating a More Global and Collaborative Asian and Pacific Leadership for the G20” The objective of the conference is to draw together experts and officials from the Asian and Pacific G20 countries – 9 in total – and describe and evaluate national perspectives.  The experts will key in on the big G20 questions – progress in dealing with global imbalances, arranging financial institutional reforms especially with respect the G-SIFIs (more on that in another post) and the progress in dealing with agricultural product price volatility and development.

This is the second annual conference.  A year ago we found that that there was little collaboration among the Asian G20 countries.  Now we shall see if there is much effort at collaboration in global governance issues among the Asian G20 or the Asian G20 and the United States, Canada and Mexico.

 

The Continuing Tension – Chinese Citizen Activism and More

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This summer has seen push back from the laobai xing 老百姓  – the ordinary people and Chinese journalists as well.  It has indeed been a summer of discontent that the Party/State have found it difficult to contain.

I suppose it is not a surprise that we are witness in the last few days to a visit to Sina by Liu Qi, secretary of the Beijing Municipal Party Committee and a member of the Politiburo (See Josh Chin and Loretta Chao, “Beijing Communist Party Chief Issues Veiled Warning to Chinese Web Portal”, The Wall Street Journal (August 24, 2011).  Sina runs one of the most popular weibo (microblogs or “we-media”  in China). Sina in fact has a phenomenal 200 million registered accounts that represent a 40 percent increase over the last three months.

What is a weibo (微 薄)?  Well weibo in China are the cutting edge of social media. Weibo appear to be a combination of twitter  and facebook in China.  As my research assistant at the Munk School of Global Affairs, Qiqi Xie, found:

Since Weibo can sometimes outrun government censors for short periods of time, Chinese citizens can use it to publish more controversial material and to push personal causes … Today, microblogs are increasingly favored over traditional media – which is heavily regulated by the Chinese government in terms of mobilization, amount of information and speed.  According to Meng Lingjun, a lecturer at the Central China Normal University, microblogs “have not only served as a significant tool for information dissemination, but we have also affected the formation and changing of public opinion … in emergency situations.”

Weibo activity was particularly notable at the time of the collision of two high-speed trains near the city of Wernzhou.  As pointed out by Chin and Chao, “Afterwords, millions of users flooded onto the site to exchange information and express frustration with the government’s response.”

While weibo kept the Railway officials from trying to cover up and hide the serious incident, there is continuing worry that this form of citizen opinion will be stifled.  This concern was only heightened by a series by a series of editorials in the state papers discussing the need for more robust effort to refute “rumors” online with particular attention paid to the microblogging.  So the visit by the Party Secretary only raises further the concern over a crackdown on weibo.

The train disaster also gave the traditional news media several weeks of criticism that had seldom been in evidence.  Zhang Zhi’an a journalism professor at Sun Yet-sen University in the southern city of Guangzhou, “Estimates that China now has a pool of up to 500 investigative reporters, and many journalism students want to follow in their footsteps.” (see Kathrin Hille, “Chinese Media Dare to Flex their Muscles”  FT.com (August 11, 2011).

Have we reached a watershed in China for wider public opinion – or are we at the edge of a new crackdown?  More on this soon.

 

 

 

 

Is it America or is it the Liberal World Order That is Passing

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[Editor’s note:  I’d like to thank Arthur Stein, UCLA and Richard Rosecrance, Harvard for the early discussions we held on the issues raised in this blog post.  They are not responsible for any of the opinions expressed here. ASA]

Pronouncements of American decline miss the real transformation under way today. What is occurring is not American decline but a dynamic process in which other states are catching up and growing more connected.

The above excerpt is the opening to the concluding section of John Ikenberry’s precis – his article in the recent May/June edition of Foreign Affairs, “The Future of the Liberal World:  Internationalism After America”  of his most recent book, Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order.

It may well be that a final evaluation of Ikenberry’s examination of the evolving global governance system will require a close reading of the book.  But for the moment let me assume that this FA is a relevant summary of the Liberal Leviathan’s thesis.

The question that John poses is whether we are witnessing  just the decline of the United States – or I suppose slightly more correctly the ‘rise of the rest’ – or, in fact, we are also witnessing the decline of the liberal world order promoted most fiercely by the United States. If the latter is true then the global order will not only look less American but less liberal. As the newly emerging states become more central to the world order, they will bring a more illiberal – less open, less rules-based and less democratic – world order.  As John identifies this:

Rather, the struggle will be between those who want to renew and expand today’s system of multilateral governance arrangements and those who want to move to a less cooperative order built on spheres of influence.

The global governance system of the future will be more fragmented, less multilateral and more mercantilist.  But John argues that this is not the future of the international order.  And he suggests this more illberal outcome is not necessarily in our future by  distinguishing and separating the current multilateral order from the United States.  So while the global governance system has been built by the United States and supported by its traditional allies, liberal internationalism, “openness and rule-based relations enshrined in institutions such as the United Nations and norms such as multilateralism” will continue to exist without the United States as the hegemon. While the US, according to John, will not rule in the way it has in the decades since World War II, it will still be able to lead – and presumably it will do so.  And the reason for this is:  the rising powers – the Chinas, Brazils and Indias – are also wed to the global governance order of liberal internationalism.

For John the current global order is built on two ordering principles – the first  built on the evolution of states and the principles of state sovereignty and and norms of more or less collaborative great power relations.  And the second is built on the liberal order of a open, rules-based and and democratic international order.  Indeed the building of the state system was necessary for the building of the second – the liberal order.

Now international relations specialist have long debated whether a hegemon – the UK in the 19th century and the United States in the second half of the twentieth century – is a necessary element for maintaining a liberal order.  With John’s identified bifurcation, we need to determine whether the evolving international system of great powers is able to maintain a stable international order and to promote a liberal order.

John is certainly right that there is no strong evidence that the current Chinese leadership – the exemplar of the newly arrived rising states – rejects either element of the order – that is collaborative great power relations and as well a liberal order of open trade and a rules-based system.  But not having rejected the order as it currently exists is not the same thing as saying the Chinese leadership accepts and is prepared promote these norms and mechanisms of the global order.  And it it is possible that China might accept one principle – say great power stability – and yet fail to promote the other – the liberal order.  John acknowledges that stability is required for a liberal order.  But could it be that the evolving system may promote stability and great power accomodation – of a rather classic form – without necessarily promoting or even maintaining the current liberal order.

Where is the Chinese leadership?  There is no question that China has benefited dramatically from both elements of the order – international stability and openness – but China’s emergence as a great power and the perception – and I emphasize perception of US decline – may have led some of China’s current leaders to reassess China’s place in the global order and reflect on how it must act or indeed how others – especially the United States – must act.  Further, the perception of decline worryingly may have “infected” the next generation of leadership that will assume leadership in another year.

Let me look briefly at the second element of the current order – its Liberal nature.  Certainly China has become deeply integrated in the international economy – and that the degree of integration contrasts vividly with other rising powers of earlier decades.  But many suggest that China has dramatically benefited from advantages not employed by others.  China’s export trade policy has driven its economic growth – and it has been a boon to US multinational corporations as well, might I say – but the imbalances generated in the system are creating volatility and instability.  And it would appear the leadership – notwithstanding all the statements of a turn to a more domestic consumption-based model – is unwilling to abandon the export growth model that brought it such rapid economic growth.  Remember the leadership believes that it is essential to maintain high growth to avoid social unrest.

And as for democracy, the Party appears to determined to maintain one-party rule notwithstanding that the rule of law and democratic practices are the foundation of modernity.  While democracy may be the ideal there appears to be no appetite for it among the current leadership and there is nothing to suggest that the coming new generation of leadership is in any degree more enticed by the ideal notwithstanding the rise of a middle class in China. As a punctuation mark it is clear that China does not accept humanitarian intervention the newest aspect internationally of the liberal world order.

And as for multilateralism and the acceptance of restraint and collaborative great power relations, the signs are there but unilateralism and regional dominance have not disappeared from Chinese policy.  Just when you think the Chinese have accepted collaborative great power relations and multilateralism, there are the behaviors, or lack of behaviors, over Korea, the South China Seas and military – to – military relations with the US.

So there is a large question mark and not an explanation mark on Chinese policy and its support for a liberal order.  But the question of the passing of a liberal order is not just to be laid at the doorstep of China.  It is also a question mark  that now lies over US policy.  The continuing illiberalism over trade policy – the assertion continuously of a lack of a level playing field   – is a marked contrast in US foreign policy to earlier periods of liberal leadership.  The so-called “leading from behind” strategy – whatever that is – of the current US Administration leads to rising questions of US leadership – not just rule.  The chaos of domestic politics that undermines the prospect of the US dealing with its fiscal situation also raises concern that it will – and maybe cannot lead.

The saving element of this particular question – the maintenance of a liberal order, may come down to definition.  As one of my close colleagues Arthur Stein from UCLA asks “What is the liberal order?”  Maybe just as we have built a literature that examines the varieties of capitalism, so, according to Arthur, we must try and determine the varieties of liberalism that may still represent an international liberal order.   It may still be a liberal order notwithstanding more managed exchange rates and new rules on capital controls.  Or maybe not.

So the question of what is recognized as a liberal order may strongly influence whether we we are able to assess whether a liberal order can be maintained with or without the United States.  The likely reality is that the liberal order is not just built on US leadership but it surely includes US leadership.  It is a more open question whether we need China and others to sustain the liberal order.  But it too is a question that needs to be answered.

The liberal order – however defined – may survive China’s growing great power presence,  but I think it quite possible that without US participation not only will US leadership disappear but also the liberal order it built over the decades.  Then the remaining question will be, can we retain collaborative and accommodative great power relations.

 

 

The agenda for the renewal of the liberal international order should be driven by this same imperative: to reinforce the capacities of national governments to govern and
achieve their economic and security goals. … In this new age of international
order, the United States will not be able to rule. But it can still lead.

The Inflation Tiger – Rising

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The announced inflation rate for China signaled again the emergence of inflation as a serious global economic issue.  At the moment it lies principally with large emerging market countries notably in China, India and Brazil.

The Chinese government has targeted 4 percent.  But China’s consumer prices rose at 5.4 percent on a year-on-year basis in March.  This level represents the biggest inflation jump since July 2008.

Meanwhile in India inflation rose at almost 9 percent in March after rising 8.3 percent in February.

Finally, in Brazil the consumer price benchmark rose to 6.44 percent, which is the fastest rate in 2 years.

These major emerging economies are responding with increases in interest rates.  Thus, China’s central bank announced recently its fourth increase in cash reserves for the large banks in China.  These banks must now set aside 20.5 percent  of their cash reserves representing an increase of half percent.  It is then hoped that banks in will reduce their loans to take account of the need to retain larger cash reserves.

Brazil raised its central bank rate to 12 percent representing a quarter point increase – this after two previous increases of a half percentage each.  This interest rate is the highest of any major economy.

All these emerging markets, and others, plus developing countries are experiencing significant increases in food prices as well as energy prices.  The interest rates and inflation rates appear to contrast with the traditional economies – the US core rate rose at 1.2 percent, though the CPI is at 2.7 percent and Europe with a 2.7 percent increase though this represents the highest rate in two years. This increase though significantly lower than the large emerging markets has prompted an interest rate rise by the European Central Bank.

The rising emerging market rates – have helped fuel the appreciation of their currency – the Real has risen some 40 percent since early 2009.  Yet this interest rate efforts  – to deal with inflation – have had the perverse effect of only further encouraging capita inflows precisely what the the Brazilian government, for example, has been trying to staunch since it only causes the currency to further appreciate.  China does not suffer from this vicious cycle only because its currency is managed – indeed presumably significantly undervalued – as argued by US officials and others.

Where does this leave the large emerging markets.  For China the rising inflation may encourage a more rapid appreciation of its currency. Wage and product price increases may likely follow and the virtual circle where China growth and lower pricing may come to an end.  China may well export inflation as well as goods.  India may do the same.

For Brazil there are strong voices urging that the Brazilians need to shift to their own form of managed currency (see Roberto Luis Troster’s  Feature of the Week at the Munk School Portal) to constrain the vicious cycle of inflation and interest rate hikes leading to further currency appreciation.

The Inflation Tiger is indeed dangerous.

Banishing “Scary Images” and Behavior in the China-US relationship

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I think it’s fair to conclude that the Hu Jintao State visit will be viewed in retrospect as a mild success.   Now in the context of the US-China relationship recently, that’s not bad.   The relationship didn’t go backwards and there was some sense that the two Leaders were working off the same page – building a comprehensive and closely coordinated bilateral relationship.

The key question is whether the two – through their speeches and actions –  helped to dispel each nation’s “Scary Image” of the other.

For the Chinese the true Scary Image is a US foreign policy that seeks to encircle and contain China.  In that regard of course there is the evident discussion of Taiwan – the continuing provision of Taiwan military with new weaponry – and the close-in approach of various US carrier flotillas in areas surrounding China, the tension over the South China Sea and of course the Korean Peninsula.

In this regard President Obama’s statement on the positive good that China’s rise can bring goes some way in assuring the Chinese people that the US is not focused on a containment strategy.  The following comment by President Obama was targeted directly at the containment view: “I absolutely believe China’s peaceful rise is good for the world, and it’s good for America.”  For good measure the President went on to declare that the United States wanted to sell all sorts of stuff to China – underscoring the need to broaden trade and increase American exports to China.

On the US side, the Scary Image of China is the new assertiveness of China being the product of American declinism.  In this scary image all the pessimism over the US economy and the growth of  China’s military leads China’s military in particular, or the leadership generally, to press the United States on various territorial and policy fronts in the belief that the US has been fundamentally weakened.  Such a view could give rise to miscalculations that might leave both sides unable to back down in a crisis.

But President Hu sought to counter this overly assertive China view.  As Jeffrey Bader, President Obama’s chief Asia adviser concluded in the NYT:

The message seems to be you don’t need to fear us, but you should also know that we can’t do do everything you want.

Again Bader concludes:

“The notion that they can challenge our supremacy in our lifetimes is not in the cards.  They can challenge us on certain technologies”, and militarily, “in areas close to their shores – but not globally, not for a long while.”

Now this won’t stop congressmen and those on the right from beating the drum of Chinese economic and military pressure, but the behavior and words of President Hu give no fodder to those who focus on “the China Threat”.

And that’s a positive outcome.

Is Yao Ming a sign of future possibilities for Rising State Celebrities?

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This blog post introduces two very different themes about celebrity activism.

The first theme concerns the role (or arguably the non-role) of sports celebrities as pivotal activists. Although some sports celebrities do involve themselves in causes there is no sports equivalent to a Bono, Angelina or George Clooney.  Why don’t sports entertainers not rise to the top in celebrity activitism?  Is it because of the team dimension? Or is it because of some socialization process that puts the emphasis solely on commercial endorsements? The exceptions to this rule (quite a few from non-US backgrounds) we need to examine but the reasons for this material difference needs to be explored.

The second theme concerns the role of celebrity activity generally in the ‘Global South’ and specifically in the BRICSAM countries. Up to now we have looked exclusively at celebrity activism in the ‘Anglo-sphere’. However, as the BRICSAM countries ascend it is likely that celebrity activism will arise from/in those countries as well.

China is at the top of the list of BRICSAM countries in terms of the impact of its rise, a condition that will be showcased this week with the state visit of President Hu Jintao to the US.

Yet, when we look at Chinese celebrity activism few individuals have appeared to gain a global/universal reach. Readers may differ but I would suggest that action film superstar Jackie Chan (a UNICEF/UNAIDS goodwill ambassador) is the best known of the established celebrity activists – though he is from Hong Kong as opposed to the Mainland.

Although China has its unique political/cultural character, some of the constraints on sports figures are familiar to the western world. A search of the biography of Liu Xiang, the talented hurdler (whose injury in the Beijing Olympics was a major disappointment) gives an indication of the obstacles: a combination of major commercial endorsements and the massive time obligations for training.

Such constraints however may loosen up in the future. The profile of Yao Ming, the iconic Shanghai Sharks/NBA basketball star, signals some of the possibilities of a Chinese sports celebrity gaining a global/universal reach. While Yao has an impressive set of commercial endorsements, he has also become a leading sports figure in terms of charity activities. He donated a big component of time and resources ($2 million of his own money and major initiatives through the Yao Ming Foundation for rebuilding efforts) in the aftermath of the calamitous 2008 Sichuan earthquake. He has worked with a number of other engaged sportsmen (Dikembe Mutombo and Steve Nash) on events, including back-to-back charity basketball games in Beijing and Taipei on July 24/28 2010.

While most of his work highlights the value of constructive engagement, it is also worthwhile mentioning that Yao Ming is on some issues prepared to be associated with causes that contain some societal sensitivity. One that jumps out is Yao’s willingness to support Wild Aid’s campaign on endangered species (notably his public campaign to deter the consumption of shark fin soup). Although not as much on the radar as the efforts by western celebrities to cultivate a more healthy life-style (see for instance an interesting article by David Ritter in Global Policy on the efforts by celebrity chefs to highlight the crisis in the world’s fisheries http://www.globalpolicyjournal.com/blog/13/01/2011/bismarck-jamie-oliver-celebrity-chefs-and-resource-diplomacy> this alternative form of engagement showcases some future unanticipated possibilities of celebrity activism/diplomacy.

Waiting for Godot

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As is always the case, it has been extremely interesting to travel around China  and to talk to colleagues at various research centres and think tanks.  My discussions have focused on global governance and the G20.  And in the current context, of course, there have been large dollops of discussion on the impending Hu Jintao state visit to Washington.

Let me focus on that just a bit.  I have acknowledged in a recent blog post the growing commentary in the US characterizing and then analyzing  the US-China relationship – “Defining the Key Relationship“.  In this post I comment on the Zbigniew Brzezinski op-ed from the NYT.  Brzezinski argued that the leaders should work to produce a declaration to set out the basic principles and practices that should govern the US-China relationship.  I must say I was rather critical of this approach and argued for pragmatic and meaningful steps to advance US-China collaboration.

I am less puzzled now by Brzezinski’s deliverable.  For at stop after stop I got an earful from my colleagues about US policy being unilateral and potentially harmful for other G20 and a wider circle of countries. Colleagues raised the spillover impact of current US policy most notably quantitative easing or QE2.  Though indirectly acknowledging China’s unilateral and hurtful efforts  – mainly fixed exchange – China experts, chose to attack current US efforts.

It would appear that neither country comes away with clean hands and each threatens to impact the G20 countries with policies  carrying significant spillover implications.