Category Archives: US-China Relationship

The ‘Global Order’: ‘Who is on First’

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I was trying very hard to ignore the impending vote for US president upcoming next week. We will have plenty of time to contemplate the action and consequences of the presidential choice on US foreign policy and global leadership.

But then again I was not fully able to ignore the consequences for the international order of this event. I was caught by a very recent Special Report from CIGI on: “Scenarios of Evolving Global Order”. Now CIGI is located in Waterloo Ontario and CIGI stands for the Centre for International Governance Innovation. I have a small soft spot for the think tank as I and a number of close colleagues spent some good years there when it launched as a global affairs outfit and, I think produced some good early work on global governance, among other things.

Anyway, the Report is interesting as it attempts to:

… fill a gap between the analysis of current trends and mapping of potential futures by outlining five possible scenarios for an evolving global order. These five scenarios represent a spectrum from the most modest plausible change (reform of the current system) to the most radical (transformation of the whole system due to a global shock).

There clearly is much current discussion over the evolving global order in the context of significant geopolitical tensions between the two leading powers and the numerous conflicts burdening international relations. So the Report describes 5 different scenarios built on these assumptions:

• The current international system is not working; international institutions, including the United Nations and Bretton Woods institutions, are unable to address most contemporary challenges.

• Responses to contemporary global challenges are siloed, nationally and institutionally.

• The United States’ global leadership is waning due to reduced capacity and internal focus.

• The relative economic power of liberal democracies is diminishing.

• Emerging powers — including, but not limited to, China and India — are increasingly asserting their influence and driving change.

• Finding new pathways of international cooperation on security issues may be more elusive, meaning attention may focus on cooperation on economic issues.

• Deglobalization, and regional integration as an alternative to multilateralism, continues to accelerate by many, but not all, measures.

• Momentum for nationalist and isolationist policies continues to build in many countries.

The result five different scenarios as filled out by the author team:

Scenario 1: Reform of the Existing Global System

Scenario 2: Replacement of the Existing Global System

Scenario 3: The Emergence of a Bloc-Based Global System

Scenario 4: A Case of Disorder

Scenario 5: Transformed Global Order

Each scenario is interesting and for every scenario there are two pathways described by the authors leading to an identified outcome:

The authors’ view is that these five scenarios broadly represent core directions that global order may evolve toward in the coming months and years. They acknowledge that there are numerous potential pathways that the five scenarios could take — by choosing only two for each, many possibilities remain for further exploration.

Now each scenario is worth assessing – and I will try and examine some perghaps at a later date, but I was struck by the perspective the authors identified for the structure and the dynamics for all five scenarios. As the Report suggested:

All of the scenarios explored assume the current and evolving global dynamics are multipolar (rather than other forms such as bipolar, hegemonic or concerted). It is, of course, possible that global order does not continue to evolve in  a multipolar way — for example, that one group of states forms a security and economic coalition in a way that dominates all the rest or that the world devolves into a bipolar world utterly dominated by American and Chinese spheres of control. The world is currently operating with multipolar dynamics on most issues, and this is likely to continue into the future.

Now that assumption of a multipolar system struck me. The reason is I came across an interesting Substack Post from Clarence Gu and Chenghao Sun, ChinAffairs+ describing in the Post titled “Yan Xuetong & John Mearsheimer Conversation: Who Shapes Global Order, and Who Will Win the Competition?”an interesting encounter, the third in fact, between these two experts. Now Yan Xuetong is the Dean of the Institute of International Relations at Tsinghua University, a highly prestigious university in China and John Mearsheimer is, as he describes himself, “the  R. Wendell Harrison Distinguished Service Professor in the Political Science Department at the University of Chicago, where he has taught since 1982 and an international relations theorist. More specifically, I am a realist.”

Now I have known John for many years as we were graduate students together at Cornell University with the same adviser, the recently passed Richard N Rosecrance, renowned international relations expert. But we were seldom on the same side of the fence when describing the underlying dynamics of the international system. But that is neither here nor there.

Both Yan Xuetong and John are known for their focus in international relations on ‘realism’, and in fact John’s  writings identify what is known as ‘offensive realism’. And while the two differ to a degree in this encounter at Tsinghua in Beijing they both strongly endorse the notion that the system is driven by the need by states to maintain dominance in a current bipolar not multipolar world (You will note by the way that the quotes that follow have been slightly edited due at times to  imperfect transcription). As John describes the international system:

How do you survive the international system? The system is where there is no higher authority. The answer is very simple. You want to be very powerful. You want to maximize your power, you cannot be certain of the intentions of those other states. It pays to be really powerful, to pay to be a hegemon.

 

If you think more specifically, the argument is that you can only be a regional hegemon, number one. Number two, you want to make sure that no other state is a regional hegemon. The ideal situation is to be the only regional hegemony in the international system.

 

All of this is to say we are involved today, in an intense security competition. It shows no signs going away. And if anything will get worse with the passage of time. This is a tragic situation. It has nothing to do with Chinese culture or American culture. And many people in China blame the United States for this trouble. … So my argument is, it’s the system that has caused this intense security competition.

Yan Xuetong is even more direct. He states:

The new trend of global order is Counter-Globalization. Then certainly today, I think because today’s title is Global Order and US-China relationship, we have to talk about how the relationship between China and US impact the current global order, my understanding is that the China-US relationship just like John argued that it will be intensified in terms of conflicts.You cannot expect China and US suddenly find a way to set down those disputes become the partners. If that happens, it means our theories are wrong. And actually, why the China-US conflicts are increasing and intensifying. It’s because now we’re in a bipolar configuration. The power structure is not multipolar.

 

The power structure is not multipolar. The current power structure is bipolar. And in the IR community, we all agree the situation after the World War One was multipolar, and after World War Two is bipolar.

 

What I mean is that the historic experience tells us, today we still have to understand what the international configuration is. It is not multipolar, not unipolar, it is bipolar, because except China no other major powers have capability or national power that account for 1/3 of the United States. None of them, except China. I don’t know how exactly we can do the measurement, but at least China’s capability is larger than 1/3 of the United States, possibly I would say 2/3 of the US.

Well, I won’t go into the five scenarios at this point though they are worth reviewing. The point here is to raise concern over analyses that are largely driven by structure rather than dynamics generated by policy – security, economic and political. These are the drivers that shape international outcomes. It is difficult at this moment to determine whether the structure is slightly less hegemonic, or is already bipolar, or in fact has become multipolar. The real analytic need, however, is to focus on the leading states and their foreign policy determinations. Structure is there, of course, but it does not drive foreign policy action or outcomes.

This Post first appeared at my Substack, Alan’s Newsletter. All comments and free subscriptions are welcome

Image Credit: Clarence Gu

 

Reshaping the US Global Order Role

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It is not a surprise with a month to go till the US election that ‘folks’ are assessing where the US global order role is, where it should be, or needs or can be, as we look towards a new administration. I have no crystal ball to tell me who is about to win the election and I am not about to contemplate the return of Trump. But I will look, however, at a possible Harris administration and it appears evident that observers and experts are with a month to go reflecting on what’s next for US global leadership.

Let’s start with one who has had responsibility in the near past for US foreign policy. Secretary of State Antony Blinken recently penned an assessment of ‘his’ foreign policy in FA, titled, “America’s Strategy of Renewal: Rebuilding Leadership for a New World”. Now you’ll not be surprised that the piece is a narrative and strong expression of policy gone right:

President Biden and Vice President Harris pursued a strategy of renewal, pairing historic investments in competitiveness at home with an intensive diplomatic campaign to revitalize partnerships abroad.

This twin-pillared strategy, they believed, was the best way to disabuse competitors of their assumptions that the United States was declining and diffident.

Blinken acknowledges that US leadership and action was required to meet the challenge of these revisionist powers that appeared to be determined to reshape leadership and the principles of the current global order:

A fierce competition is underway to define a new age in international affairs. A small number of countries—principally Russia, with the partnership of Iran and North Korea, as well as China—are determined to alter the foundational principles of the international system. While their forms of governance, ideologies, interests, and capabilities differ, these revisionist powers all want to entrench autocratic rule at home and assert spheres of influence abroad.

 

They all wish to resolve territorial disputes by coercion or force and weaponize other countries’ economic and energy dependence. And they all seek to erode the foundations of the United States’ strength: its military and technological superiority, its dominant currency, and its unmatched network of alliances and partnerships. While these countries are not an axis, and the administration has been clear that it does not seek bloc confrontation, choices these revisionist powers are making mean we need to act decisively to prevent that outcome.

Implicitly and explicitly Blinken describes what he believes to be a very successful competitive policy with these revisionist actors and most particularly China. As Blinken describes Biden administration policy efforts:

The Biden administration’s commitment to compete vigorously yet responsibly along these lines took away the revisionists’ pretext that the United States was the obstacle to maintaining international peace and stability. It also earned the United States greater trust from its friends—and, along with it, stronger partnerships.

 

Second, we infused U.S. alliances and partnerships with new purpose.We elevated the Quad—the partnership with Australia, India, and Japan—and took concrete steps to realize a shared vision for a free and open Indo-Pacific, from enhancing maritime security to manufacturing safe, effective vaccines. We launched the U.S.-EU Trade and Technology Council, marshaling the world’s biggest economic partnership to shape global standards for emerging technologies and protect the United States’ and Europe’s most sensitive innovations.

To Blinken the alliances and partnerships that the US renewed or built were the keys to Biden administration success in a highly competitive world:

From day one, President Biden and Vice President Harris made a foundational choice that in a more competitive and combustible world, the United States cannot go it alone. If America wants to protect its security and create opportunities for its people, it must stand with those who have a stake in a free, open, secure, and prosperous world and stand up to those who threaten that world.

Notwithstanding then the revisionist power efforts to alter the global order, the US and its partners have been able to maintain the free and open global order and limit revisionist efforts to undermine the opportunities for the US and its partners:

The choices the United States makes in the second half of this decisive decade will determine whether this moment of testing remains a time of renewal or returns to a time of regression—whether Washington and its allies can continue to outcompete the forces of revisionism or allow their vision to define the twenty-first century.

Clearly Blinken is referencing the possibility of  a return to Trump. Otherwise Blinken seems to show some content with the actions of the Biden administration. That satisfaction is not shared by all. From the outside today but with experience of serving in the Biden administration another distinct point of you is expressed by a colleague, Jessica Chen Weiss. Jessica was from 2021 to 2022 a senior advisor to the policy planning staff at the U.S. Department of State on a Council on Foreign Relations International Affairs Fellowship for Tenured IR Scholars (IAF-TIRS). Jessica just recently took up a new academic appointment as the David M. Lampton Professor of China Studies at Johns Hopkins School of Advanced International Studies in Washington, D.C. and a nonresident senior fellow at the Asia Society Policy Institute Center for China Analysis. Once again in FA, Jessica examines Biden administration foreign policy in a piece titled, “The Case Against the China Consensus”. Jessica does not fall in line with Blinken’s description and actions of recent US foreign policy – its successful competition with the revisionist powers, most notably China. As Jessica describes recent Biden administration actions:

Washington faces growing criticism for pursuing open-ended competition with China without defining what success would look like. Even as China’s coercive capabilities and threatening behavior have rightly focused U.S. attention on the risks to American interests, the absence of clear metrics for success leaves the door open for partisan aspersions of the Biden administration’s approach.

With that Jessica strikes out toward an improved US-China relationship. As she describes it:

Yet beneath this charged atmosphere, ample space for debate and discernment remains. The apparent hardening of a U.S. consensus on China is shallower and wobblier than it appears. In this fluid environment, there is an opportunity for the next presidential administration to develop a more affirmative, less reactive approach, one that dials down the heat and focuses on reducing the risks while preserving the benefits of the vast web of ties that connect the United States and China.

Now it is clear from Jessica’s analysis the current administration has taken steps to at least maintain a balance with China:

The Biden administration, by contrast, has rightly invoked a sense of shared purpose, underlining the urgency of defending an international order in which might does not make right and working with governments of different persuasions to tackle problems that respect no borders or walls.

Still the emphasis from the current administration to compete successfully with China is dominant and leads to significant persistent competition with China that can, unfortunately lead to conflict:

But in the broader U.S. public and policy conversation, the impulse to thwart China often overwhelms efforts to work toward common objectives and advance U.S. interests. Rhetoric about winning the twenty first century reinforces the idea that competition is zero-sum, accelerating a rush on both sides of the Pacific to prepare for conflict and making it all too easy for critics in both societies to deride ordinary forms of diplomatic, commercial, and scientific interaction as naive at best and appeasement at worst. This emphasis on preparing for worst-case scenarios prevails in both countries.

For Jessica, then, the current policy posture is inadequate and maintains a dangerous locked in competition:

To halt this spiral, Beijing and Washington will need to identify the outcomes they wish to see, avoiding measures of success that are defined by slowing down or one-upping the other. Pursuing resilience and deterrence, not primacy or hegemony, would set them on a more stable course. Post–Cold War U.S. unipolarity in global politics was the exception, not the rule. Today, neither China nor the United States can aspire to dominance across every sector and every technology.

Resilience and deterrence, then is the goal. And here is some of what the US and presumably China must do:

It is therefore imperative that China and the United States maintain a degree of integration in order to detect and learn from new advances. If the technological leaders in a given sector are Chinese, Washington should want U.S. firms to have access to the latest innovation. Right now, Chinese manufacturers are far in front in solar, battery, and electric vehicle production. Licensing Chinese technology to construct an electric vehicle factory in the United States, for example, would build domestic expertise and help U.S. automakers transition more quickly with top-of-the-line technology.

Yet it is not clear that within the current US-China competition, and the efforts by this administration to stabilize the relationship – high level discussions including military-to-military discussions – that the US  is not seeking to maintain the economic integration that Jessica suggests is vital. There seems to be in her analysis a hint at least that what is required is the end of competition:

Diversification is healthy, but the United States needs to establish limits on decoupling and “derisking.” …

 

Right now, much of the U.S. public and policy conversation is consumed by how to counter China and defend American workers, infrastructure, technology, and intellectual property against foreign threats. This focus downplays the domestic harms that measures ostensibly aimed at strengthening U.S. national security can have on the health and vibrancy of the United States’ democracy, society, and innovation ecosystem. Getting China right is critical to the United States’ success, both under the next president and for years beyond.

Now positively Jessica does prompt a close look at the state of US-China competition. A closer look at the state of global economic competition is needed and worth engaging but for the moment it would not seem likely that a Harris administration, if she were to win the presidency, would abandon, or at least dramatically diminish political and economic competition between the US and China. And without greater understanding of the goals each seeks, the US and China that is, there is not a strong logic to acting unilaterally.

A close examination, and strong dialogue might provide insight in constructing an altered foreign policy that is in part driven by competition but with much greater bilateral and multilateral actions better able to contain the US-China competition and engage in policies that stabilize the relationship. Deterrence for sure but stronger two-way assurances that lowers the heat on several fronts including: Taiwan, the Indo-Pacific, the South China Sea, nuclear policies and more. We all would benefit from that.

This blog first appeared on my Substack at Alan’s Newsletter

https://open.substack.com/pub/globalsummitryproject/p/reshaping-the-us-global-order-role?r=bj&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true

Image Credit: The Standard

 

The Enduring Weakness of Multilateralism: An Aspect

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Though it was heartening to see the Presidential debate this past week with a strong performance by Vice President Kamala Harris, it was disheartening to see that Donald Trump remains a major force in US politics and still a strong contender notwithstanding some of his wild statements and his conspiracy theory assertions. While the event highlighted the ‘weirdness’ of Donald J Trump, the candidate, the game is not yet won. We may yet see him reoccupy the White House. Such an outcome would threaten the alliance(s) system, global trade and continuing US presence in the current multilateral system driven by Trump’s transactional model of US foreign policy behavior.

Trump’s return would likely drive current US foreign policy ‘over the cliff’. But changes have been underway for some time and many of them are weakening the multilateral system built over many decades. Many foreign policy analysts have focused on the structural elements – notably the decline in the international measures of power of the United States and its impact as a result on the global order. I was struck by a letter titled, “Muster Global Majorities”  prepared by Mark Malloch-Brown. This is just one of nine requested by FP to greet a new US president. Now, Malloch-Brown was the former deputy secretary-general of the UN well aware of the multilateral system and he targeted the decline of the US:

But whoever prevails on Nov. 5—and congratulations, by the way—this will not change the much deeper shifts underway in the distribution of global power and values alignment that are now surfacing at the U.N. and its Bretton Woods cousins, the World Bank and the International Monetary Fund (IMF). They have seen an approximate quadrupling of membership since their post-World War II founding; a more than tripling of global population; and a global GDP that is more than 10 times bigger.

 

But you must see there is a global shift underway, and the United States, more than ever, is not an unchallenged No. 1 but rather a precarious first among equals in a multilateral system and which in responding to wider intellectual and political change in the world resents any claim to monopoly leadership. As Shakespeare observed in his great play on succession and power, Henry IV, Part 2: “Uneasy lies the head that wears a crown.”

Malloch-Brown in his letter, in fact, is pointing to two evident declines: the decline in power of the US in the context of the global system, the structural elements with the rise of China and with the emergence of a number of the Large Emerging Powers, the likes of India, Brazil, Indonesia and more.  But the decline is also evident from a diminishment in US leadership in the global order, the behavioral aspect of any analysis.

While there is a relative decline in the power dimensions for the United States, it is the decline in policy leadership that is in some ways most evident. Take trade. As Alan Beattie has written just recently in the FT article entitled, “Can Globalization Survive the US-China Rift”:

Multilateralism is weak. The US is undermining the WTO by citing a national security loophole to break rules at will. The EU won a case against Indonesia over its nickel export ban, but the WTO’s dysfunctional dispute settlement system has delayed compliance.

 

But this does not mean regional or geopolitical trading blocs will start setting the rules of trade instead. The US talks a good game about building alliances, but the political toxicity of trade deals in Washington stops it offering market access to incentivise countries to join. The Indo-Pacific Economic Framework, the US’s main initiative in the Asia-Pacific, is widely regarded as all stick and no carrot.

Rather than a continued reliance on the multilateral rules and the WTO, the multilateral trade institution – of which the US is one of the primary creators –  responsible for managing trade and trade friction, the United States has chosen to neuter the global trade rules by collapsing the trade dispute mechanism of the WTO. The US has turned away as well from promoting freer trade and free trade agreements and has come to rely more and more on protectionism. As pointed out by Bob Davis in his FT piece, “How Washington Learned to Stop Worrying and Embrace Protectionism”, he described the US turn to protectionism:

… the president [Biden] made a decision that upended decades of Democratic White House rule. He ordered heavy new tariffs on Chinese imports of high-tech items and continued the massive tariffs he inherited from his Republican predecessor.

 

The significance of the moves—and the challenge that it presents to Biden’s successor—was obscured by the roller-coaster news cycle. But it bears noting: The Biden administration is the first since at least President John F. Kennedy’s time to fail to negotiate a major free trade deal, instead embracing tariffs. Even Trump, the self-proclaimed “Tariff Man,” concluded a significant free trade pact when he replaced the North American Free Trade Agreement with a U.S.-Mexico-Canada deal (USMCA), which toughened rules on auto imports but established liberal rules on digital trade. He also negotiated a smaller digital agreement with Japan.

 

The turnabout is emblematic of a broader change in the U.S. economic and political thinking that is unlikely to be reversed under either a President Trump or Harris. The era of hyperglobalization, which began around 1990 and saw global trade jump by 60 percent in 20 years as supply chains spread across the earth like spiderwebs, has come to an end. We are now in an era of growing protectionism, and as trade growth has stalled, the United States and many other advanced economies have hiked tariffs and begun subsidizing industries that they view as critical to their well-being.

The turnabout with an increasing reliance on tariffs and a more full throated rise of US protectionism in fact ties the US, that is US economic policy to its political-security policy and actions. Davis makes the pointed linkage today between the two for US policy action:

Peter Harrell, the White House’s former senior director for international economics, said the change marks a fundamental rethinking of U.S. trade policy. “We are in an era of geopolitical competition with China,” he said. “That means we aren’t going to accord China the same trading privileges and rights” accorded to allies—despite World Trade Organization requirements to treat members equally.

 

It boils down to the fact that the economic juice [from cutting tariffs] was not worth the political squeeze,” said Evan Medeiros, a Georgetown University China expert who had been an official on Obama’s National Security Council.

 

In the second part of its decision, the administration ramped up some tariffs to block Chinese imports in areas where the United States was spending billions of dollars on subsidies to create or strengthen a domestic industry.

Tariffs were quadrupled to 100 percent on Chinese electric vehicles this year, as [Lael] Brainard had advocated, doubled to 50 percent on Chinese semiconductors and solar cells, either this year or next, and tripled to 25 percent on EV batteries this year. Even low-tech Chinese syringes, which had previously been shipped duty-free, now face 50 percent tariffs as a spur to boost domestic production.

 

The primary reason for the U.S. turn to protectionism is the growing economic and military challenge from China. But it also reflects a profound change in ideology: The gains from trade—lower prices, overall improvements in living standards, greater competition—are no longer seen by many political leaders as worth the downsides in the loss of manufacturing jobs, dependence on imports from adversaries such as China and Russia, and political polarization. The Trump administration, packed with anti-free traders, gave a big push to this neo-protectionism; the Biden administration has confirmed and deepened the shift.

The bottom line is that geopolitical tensions, particularly the deep US-China competition, has undermined US commitment to a multilateral system that the US was a principal architect in creating and maintaining over many decades. This outcome to date is deeply troubling.

Image Credit: CNBC

GrappIing with Explanations for US-China Relations

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I was intrigued by the recent efforts to understand and reveal the dynamic and direction of the US-China relations. In a global order where US-China tensions, or not, are likely the most consequential for either encouraging stability or instability in global affairs, new, and possibly some old insights, are key. It is why I was caught by a number of articles by colleague Ryan Hass of Brookings. Ryan is currently the Director of the John L. Thornton China Center and the Chen-Fu and Cecilia Yen Koo Chair in Taiwan Studies at Brookings. He is also a senior fellow in the Center for Asia Policy Studies and is, as well, a nonresident affiliated fellow at the Paul Tsai China Center at Yale Law School. Importantly, Ryan served as the director for China, Taiwan and Mongolia at the National Security Council (NSC) staff from from 2013 to 2017. In that role, he advised President Obama and senior White House officials on all aspects of U.S. policy toward China, Taiwan, and Mongolia, and coordinated the implementation of U.S. policy toward this region among U.S. government departments and agencies. The point of this Post: it is very helpful to follow Ryan’s recent assessments of the US-China relationship.

I found quite helpful a number of relatively recent articles by Ryan where he tries to understand what drives the US-China relationship. The current views range from: individual great power assessments of their own power in relation to their competitors; to a range of interactive actions between and among the great powers; to domestic drivers and their impact on relations with other great powers. I was pleased to see him assess various conceptions of great power actions and their impact on current global relations with a focus on US-China  relations. So what drives US-China competition and explains in part stability in international affairs?

For Ryan it is the domestic factors that energize each country’s foreign policy actions as set out in his Brookings article from March titled, “How does national confidence inform US-China relations?”. As he writes in this piece:

Based on a review of the relationship over the past 75 years, this paper argues that when both countries feel secure and optimistic about their futures, the relationship generally functions most productively. When one country is confident in its national performance but the other is not, the relationship is capable of muddling through. And when both countries simultaneously feel pessimistic about their national condition, as is the case now, the relationship is most prone to sharp downturns. Domestic factors dictate the trajectory of relations. They do, however, play a larger role in influencing the relationship than otherwise has been observed in much recent public commentary.

 

This model for evaluating the relationship yields several policy-relevant conclusions. It suggests the relationship is dynamic and responsive to developments in both countries, as opposed to being captive to historical forces leading immutably toward conflict. It highlights that the relationship has navigated frequent zigs and zags over the past decades and rarely travels a straight line for long.” …  The current task for policymakers in Washington and Beijing is to navigate through the concurrent down cycles in both countries while keeping bilateral tensions below the threshold of conflict.

Clearly, while the interactions of the two are important aspects of the bilateral competitive relations,  it is domestic dynamics that are, according to Ryan, the significant drivers that promote cooperative relations or energize tensions:

At their core, both countries believe their governance and economic models are best equipped to meet the 21st century’s challenges. Both believe they are natural leaders in Asia and on the world stage. Both countries are contending with rapid societal transformations, which are being exacerbated by the impacts of the fourth industrial revolution. And both countries are determined to limit vulnerabilities to the other while seeking to gain an edge in emerging technologies.This is all occurring while the United States and China remain unsatisfyingly locked into a relationship that is at once both competitive and interdependent. The United States and China are competing to demonstrate which governance, economic, and social system can deliver the best results in the 21st century.

Thus in the present circumstances of US-China competition the following is the case, according to Ryan:

It [this article] argues that the United States and China presently find themselves in a simultaneous cycle of insecurity and dissatisfaction with their national conditions. Like when U.S.and PRC national down cycles have coincided in the past, this simultaneity is serving as a propellant in both countries for framing the national contest for power and influence in dramatic and, to some, existential terms.

 

Rather, by analyzing upturns and downturns in U.S.-China relations over the past 80 years, the U.S.-China relationship appears most prone to sharp volatility when both countries simultaneously are experiencing cycles of insecurity and pessimism about their futures.

 

That the U.S.-China rivalry has continued to intensify throughout the Trump and Biden administrations supports the argument that factors beyond the personalities and preferences of individual leaders inform the trajectory of U.S.-China relations. Trump and Biden are different in many respects. One through line of both of their presidencies, though, has been a sense of pessimism and loss of control among large portions of the American electorate about their country’s future.

Now the question is in the current political circumstance – with the end of Biden’s run for a second term and his replacement by Kamala Harris – what appears to be a far more optimistic leader, its seems to me,  whether this may open up a stronger prospect that the US-China relations could, assuming a Harris electoral win, stabilize and open up the prospect for more collaborative global governance efforts led by the two leading powers?

Whether Ryan’s domestic framing is an adequate explanation for US-China relations is unclear. Ryan himself allows that this described approach is not a detailed empirical analysis of great power relations but rather more of a thought experiment.

Now it is clear that this approach, just described, is but one of many contenders for understanding the state of great power relations and more particularly the US-China great power relations. In particular Ryan raises some classic IR approaches. One in particular I was interested in and Ryan examines this which he describes as: “immutable historic forces or a function of their leaders’ personalities and preferences.” As he concludes:

In other words, the United States and China are not predestined to conflict based on past patterns between rising and established powers. The nature of bilateral relations also is not simply an extension of two leaders’ preferences and personalities. There are other factors involved, specifically both countries’ internal dynamics and their levels of confidence in their national directions.

So Ryan appears unenthusiastic over ‘simple’ great power dynamics that are urged by some IR specialists.  He is not attracted to a view that focuses on the state of national power and a leader’s determination to act, or to not act, in the face of a leader’s assessment of immediate power advantage or not with rivals . Ryan mentions this in this Brookings piece but then tackles it more directly in a follow-on article where he describes in greater detail the framework, “peak power”. Ryan lays this out in an article titled, “Organizing American Policy Around “Peak China” is a Bad Bet” in China Leadership Monitor. The core argument in the ‘peak power’ thesis is that a great power, read that China, is more likely to act aggressively towards its competitors when leaders determine that that its national strength based on economic, political and military factors is waning:

China’s leaders explicitly reject suggestions that the country’s best daysare behind it. They believe China’s path to greater global influence is widening as America’s dominance in the international system wanes. It would be a mistake to organize American policy around “peak China” theory.

There certainly has been broad analysis that China, unlike in past decades, is currently struggling economically, demographically, and suffering push back from regional and other powers internationally and more. Chinese dominance regionally or even beyond is increasingly questioned. The peak power view of China has been popularized in part by two colleagues, Michael Beckley from Tufts and Hal Brands, the Henry A. Kissinger Distinguished Professor of Global Affairs at SAIS. Ryan examines their analysis of China’s leadership. As Beckly and Brands warned in a 2021 in a Foreign Affairs piece titled: “The End of China’s Rise,”the growing limits to China’s economic and political power. As Ryan suggests these IR specialists focus on strategic imperatives of great powers and their need to maintain influence and authority in the international system:

Such is the work of grand strategists who seem unconcerned about understanding China’s own vision and its strategies for securing it. Proponents of “peak China theory” treat the country as an inanimate object that is being blown off course by immutable historic forces. They assume that Beijing’s national ambitions resemble those of past rising powers that ran up against forces opposing their goals. Such analyses overlook the fact that China has agency. China’s leaders also maintain their own internal narratives and metrics for measuring progress in pursuit of their national objectives.

Ryan’s review leads him to this conclusion about China’s actions:

If any forecast of China acting as a peaking power is to hold explanatory value, there must be evidence that China’s leaders accept the diagnosis of their current condition and feel an urgency to act before their moment at the apex of national power passes. In the case of China today, no such evidence is available, at least not in the public record.

Now, I was encouraged by Ryan’s analysis of China’s power and actions to go back to the Beckley and Brands piece. Now to be fair, I should note that the two did produce a jointly authored book after the article and there may be a more elaborate explication in the volume of peak power and its influence on great power politics though most comments on their approach generally refer to the article. Here they describe what they see as the state of China’s international position in the face of declining domestic power factors:

China is a risen power, not a rising one: it has acquired formidable geopolitical capabilities, but its best days are behind it. That distinction China’s leaders are determined to move fast because they are running out of time. It matters, because China has staked out vaulting ambitions and now may not be able to achieve them without drastic action. The CCP aims to reclaim Taiwan, dominate the western Pacific, and spread its influence around the globe.

And from the article by Beckley and Brands there is surprisingly just this one paragraph in the piece that points to the consequences for great powers and the global order from the impact of peak power:

When authoritarian leaders worry that geopolitical decline will destroy their political legitimacy, desperation often follows. For example, Germany waged World War I to prevent its hegemonic aspirations from being crushed by a British-Russian-French entente; Japan started World War II in Asia to prevent the United States from choking off its empire.

Now I don’t want to extend this Post – it is already too long, and I have not read their follow-up 2022 study but I am underwhelmed by their explanation in Foreign Affairs. I have not examined closely enough the complex details of the politics of Japan before the war in the Pacific but I have examined closely the lead up to World WarI. Their view of Germany and its actions leading to World War I is just dramatically underwhelming. In my reading the crisis was driven by a decades-long decline of the Austro-Hungarian Empire and not just German aspirations and threat posed by Russia. And the state of the entente at the time of the July crisis was far from united, especially in looking at British views of the powers prior to the war.

But let’s not ‘get into the weeds’ on this. I am for the moment content to examine closely the analysis of China’s leadership by Ryan. It appears to reveal much about the state of US-China competition and geopolitical tensions in the current global order.

Image Credit: South China Morning Post

This Blog Post was originally posted at my Substack Alan’s Newsletter. Comments and free subscriptions are welcome there. https://substack.com/@globalsummitryproject/p-148581811

US Tensions Over a Leading Role

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So, I was ruminating a bit on the question of US diplomacy coming off of the previous Substack Post and particularly the Jessica Matthews’s targeting of Biden foreign policy in the upcoming Foreign Affairs article “What Was the Biden Doctrine? Leadership Without Hegemony”. As a reminder, this is what she wrote and I quoted in last week’s Substack:

 

But he [Joe Biden] has carried out a crucial task: shifting the basis of American foreign policy from an unhealthy reliance on military intervention to the active pursuit of diplomacy backed by strength.

 

He has won back the trust of friends and allies, built and begun to institutionalize a deep American presence in Asia, restored the United States’ role in essential multilateral organizations and agreements, and ended the longest of the country’s “forever wars”—a step none of his three predecessors had the courage to take.

 

All of this happened in the face of grievous new threats from China and Russia, two great powers newly allied around the goal of ending American primacy. Biden’s response to the most pressing emergency of his term—Russia’s brutal full-scale invasion of Ukraine in 2022—has been both skillful and innovative, demonstrating a grasp of the traditional elements of statecraft along with a willingness to take a few unconventional steps. … But he has carried out a crucial task: shifting the basis of American foreign policy from an unhealthy reliance on military intervention to the active pursuit of diplomacy backed by strength.

Now I concluded that analysis with a Matthews’s quote with my concluding remark: “Now it seems to me there are questions over the effective use of diplomacy of this Administration but that is for another day.” Well this is another day and I want to focus a little on the current effectiveness of US diplomatic policy.

There appears to be a growing split over whether the US has had, or should I say, will choose to move forward with sharper diplomatic policies and initiatives rather than, if I can put it bluntly, ‘Reach for the Gun’. In fact, in the end, there are questions of whether the US will involve itself at all in serious but distant conflicts especially in the face of seriously weakened multilateral institutions. The foreign policy question is actually two questions then: will a Harris Administration respond to foreign policy crises with sharp diplomacy or resort to force and even more dramatically not only how the US may engage but whether it will engage at all.

Shortly after Harris and Waltz assumed the mantle of leadership of the Democratic Party that a strong positive view was identified. For instance Mark Hannah and Rachel Rizzo wrote the following in FP:

When applied to foreign policy, it could inform a pragmatic, forward-looking realism that’s all too rare in Washington. This sentiment aligns with a growing expert consensus.

 

A recent Carnegie Endowment for International Peace study concluded that the United States’ current approach to the world is “poorly adapted to the challenges of today and tomorrow.” It also noted a widespread demand among analysts for “a major strategic reorientation.” This reorientation could be from an everything-everywhere-all-at-once approach to a more judicious and strategic use of American might.

Let’s start with what appears to be the positive efforts of the current Biden policy efforts and conjure it  as a likely course of action for a new Harris Administration.  The immediate diplomatic approach is the recent Biden actions focused on its key geopolitical concern – that is its perceived strategic competitor and threat – its biggest rival – China. Notwithstanding the tough back and forth the two have undertaken recent discussions that appear to be designed to stabilize this most difficult bilateral relationship. The evidence for this is the recently concluded visit of National Security Advisor Jake Sullivan to China. This most recent meeting with Wang Yi who is the chief Chinese foreign affairs official for President Xi was not the first. For Sullivan and Wang this was one of a series of interactions as described by Demetri Sevastopulo in the FT:

It was the first of several secret rendezvous around the world, including Malta and Thailand, now called the “strategic channel”. Sullivan will arrive in Beijing on Tuesday [August 27th] for another round of talks with Wang in what will be his first visit to China as US national security adviser.

 

While the backchannel has not resolved the fundamental issues between the rival superpowers, says Rorry Daniels, a China expert at the Asia Society Policy Institute, it has aided each’s understanding of the other. “It’s been very successful in short-term stabilisation, communicating red lines and previewing actions that might be seen as damaging to the other side,” she says.

The two leading powers do not see ‘eye-to-eye’ on the role of diplomatic interactions.  China in particular does not accept the framework of stabilization in the context of competition – the US view. Still, there does appear to be a certain diplomatic stabilization as described by Sevastopulo leading up to this most recent series of meetings in Beijing:

Sullivan strived to get Wang to understand the new reality — that the nations were in a competition but one that should not preclude co-operation. “That was a really hard jump for the Chinese,” says the second US official. “They wanted to define the relationship neatly [as] we’re either partners or we’re competitors.”

 

The Chinese official said China did not accept the argument. “Wang Yi explained very clearly that you cannot have co-operation, dialogue and communication . . . and at the same time undercut China’s interests.

 

They discussed possible deals for a summit, including a compromise that would involve the US lifting sanctions on a Chinese government forensic science institute in return for China cracking down on the export of chemicals used to make fentanyl. They also talked about resurrecting the military-to-military communication channels China had shut after Pelosi visited Taiwan. And they discussed creating an artificial intelligence dialogue.

 

Rush Doshi, a former NSC official who attended the meetings with Wang, says it was important to explain to China what the US was doing — and not doing. “Diplomacy is how you clear up misperception and avoid escalation and manage competition. It’s actually not at odds with competition but part of any sustainable competitive strategy.

And in this most recent set of meetings in Beijing, Sullivan was able to meet not just President Xi, important in and of itself,  but critically a meeting with General Zhang Youxia:

Mr. Sullivan’s meeting with Gen. Zhang Youxia, vice chairman of China’s Central Military Commission, was the first in years between a senior American official and a vice chair of the commission, which oversees China’s armed forces and is chaired by Mr. Xi.

The Biden Administration regarded the Beijing meetings, therefore, as important diplomatic effort in stabilizing great power relations:

Sullivan tells the FT that he was under no illusions that the channel would convince China to change its policies, but he stressed that it had played an instrumental role in helping to shift the dynamic in US-China relations.

All you can do is take their policy, our policy, and then try to manage it so that we can take the actions we need to take and maintain stability in the relationship,” Sullivan says. “We have been able to accomplish both of those things.”

If managing great power relations was the US diplomatic goal, that seems to be successfully achieved for the moment. But that positive framing is not replicated in wider global order relations and the US efforts or lack thereof. Thus, the assessment of wider US diplomatic efforts is not nearly as upbeat. This is the message of Alexander Clarkson,  a lecturer in European studies at King’s College London in his analysis of US foreign policy in his WPR article titled: “For Much of the World, the Post-American Order Is Already Here”:

This gradual waning of American influence outside of core areas of strategic focus rarely features in ferocious debates in Washington between those who believe that the U.S. should remain deeply involved in global affairs and the so-called Restrainers on the left and MAGA Republicans on the right who are skeptical of security commitments outside U.S. borders.

 

The limits of the United States’ ability to influence developments on the ground in destabilizing conflicts, or the responses of states engaged in them, have been particularly visible with civil wars in Myanmar and Sudan that barely feature in domestic American news cycles. In both cases, U.S. policymakers distracted by developments elsewhere failed to anticipate emerging escalation dynamics and then failed to develop the strategic leverage needed to rein in brutal armies and militias whose backing from other states rapidly widened devastating wars.

 

Washington’s flailing in the face of conflicts within Myanmar and Sudan that have now become wider geopolitical crises is a product of long-term shifts in the global balance of power. While Washington will continue to play a decisive role in managing conflicts that involve great power competition, such as Russia’s invasion of Ukraine, the tensions between Israel and Iran and China’s strategic assertiveness under Xi Jinping, in many other parts of the world the U.S. impact will be limited to diplomatic press releases expressing grave concern.

Clarkson sees US actions and inactions as a reshaping of the global balance of power. But I suspect it is an unwillingness to exercise direct diplomatic action to what is seen to be a distant conflict. It is also an evident result of the undermining, including by the United States, of effective diplomatic action by the UN. The weakening of the formal institutions – the WTO in trade policy and the UN in security and peace efforts – is now ‘coming home to roost’ at the US doorstep. US inaction is matched by the inability of these and other formal institutions to take on, stabilize and hopefully resolve difficult and potentially threatening conflicts.

The Harris Administration, if it wins, needs to address the manner of engagement but in too many instances the likely failure of foreign policy engagement at all. Much is currently wanting in US foreign policy. It is unclear if a Harris Administration is likely to tackle, and if so, how, these difficult foreign policy questions.

Image Credit: YouTube

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The Trouble with Today’s Multilateralism: An Intro

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So in this week’s Post I was all set to hone in on the struggles over reenergizing faltering multilateralism in the current global order. Today’s  troubles encompass the formal institutions – the Formals – from the UN, and many of its specialized agencies to the international financial ones – the World Bank, the IMF and the WTO. And the troubles extend to the Informals, the G7, the G20 to the BRICS+ and more. The struggles over multilateralism are the flip side of the return, seemingly ever more strongly power politics – the wars in the Ukraine and Gaza, and geopolitics, especially the rise in bilateral tensions between China and the United States.

But before I could go there, I couldn’t ignore the just excellent article – recommended by my colleague, and China expert, John Gruetzner – in Foreign Affairs by Zongyuan Zoe Liu, titled, “China’s Real Economic Crisis: Why Beijing Won’t Give Up on a Failing Model”. This very good piece leaned strongly into the discussion I had raised in my previous Alan’s Newsletter Post, ‘China, Seemingly, Stays the Course’. The Post chronicled the disappointment expressed by analysts and experts in the West primarily but in a rather more modulated form in China as well. The disappointment according to these experts emerged over the failure in the Third Plenum to initiate significant economic reform in the Chinese domestic economy and a clear determination to tackle domestic consumption.

Liu gets it right:

The Chinese economy is stuck. … But there is a more enduring driver of the present stasis, one that runs deeper than Xi’s growing authoritarianism or the effects of a crashing property market: a decades-old economic strategy that privileges industrial production over all else, an approach that, over time, has resulted in enormous structural overcapacity.

 

Simply put, in many crucial economic sectors, China is producing far more output than it, or foreign markets, can sustainably absorb. As a result, the Chinese economy runs the risk of getting caught in a doom loop of falling prices, insolvency, factory closures, and, ultimately, job losses.

 

Since the mid-2010s, the problem has become a destabilizing force in international trade, as well. By creating a glut of supply in the global market for many goods, Chinese firms are pushing prices below the breakeven point for producers in other countries. In December 2023, European Commission President Ursula von der Leyen warned that excess Chinese production was causing “unsustainable” trade imbalances and accused Beijing of engaging in unfair trade practices by offloading ever-greater quantities of Chinese products onto the European market at cutthroat prices.

 

Despite vehement denials by Beijing, Chinese industrial policy has for decades led to recurring cycles of overcapacity. At home, factories in government-designated priority sectors of the economy routinely sell products below cost in order to satisfy local and national political goals.

Now there continues to be some contention over whether in fact production is below cost but I I was pleased by Liu’s ‘recommendation’ that the two – the West and China – consider options other than just piling on the tariffs. Liu correctly points out the negative consequences of such trade policy:

A China that is increasingly cut off from Western markets will have less to lose in a potential confrontation with the West—and, therefore, less motivation to de-escalate. As long as China is tightly bound to the United States and Europe through the trade of high-value goods that are not easily substitutable, the West will be far more effective in deterring the country from taking destabilizing actions. China and the United States are strategic competitors, not enemies; nonetheless, when it comes to U.S.-Chinese trade relations, there is wisdom in the old saying “Keep your friends close and your enemies closer.

That is why I have suggested negotiating – and one aspect in this case could be Voluntary Export Restraints or VERS. VERS are not super policy  actions – I get that  but they do encourage bilateral discussions rather than just unilateral penalties. As Liu suggest:

The U.S. government should discourage Beijing from building a wall that can sanction-proof the Chinese economy. To this end, the next administration should foster alliances, restore damaged multilateral institutions, and create new structures of interdependence that make isolation and self-sufficiency not only unattractive to China but also unattainable. A good place to start is by crafting more policies at the negotiation table, rather than merely imposing tariffs. … If the government [China] also implemented voluntary export controls, it could kill several birds with one stone: such a move would reduce trade and potentially even political tensions with the United States; it would force mature sectors to consolidate and become more sustainable; and it would help shift manufacturing capacity overseas, to serve target markets directly.

While working through the WTO might be preferable, and many analysts suggest such an approach for multilateral trade frictions, realistically that course of action is out of reach for the moment.

So there you are on the Third Plenum and global trade.  Let me at least turn to the original subject for this Post; let’s at least open the discussion on multilateralism and its problems. I was particularly attracted to a piece published recently by Pascal Lamy. Pascal Lamy (pascallamy.eu) is currently the Vice-President of the Paris Peace Forum, and coordinator of the Jacques Delors Institutes (Paris, Berlin, Brussels). Importantly, Pascal Lamy served two terms as Director General of the World Trade Organization (WTO) from September 2005 to September 2013. He is someone that is very familiar with critical aspects of the multilateral system. Recently his piece, ‘Reshaping the Global Order’ was published in a large edited volume by colleagues from the Center for China & Globalization, CCG,  Henry Huiyao Wang and Mabel Lu Miao, Enhancing Global Governance in a Fragmented World: Prospects, Issues, and the Role of China. Now Lamy sets out the critical structural issues that impair today’s multilateralism efforts. As he says:

The main long-term, structural factors at play can be summarized by sovereignty as a founding principle of an international order, by the obsolescence of the previous order, and by the US-China rivalry.

It is not surprising that he identifies ‘sovereignty’ as the first key to multilateralism’s problems:

Sovereignty has been, is, and will remain the main obstacle to building a fully fledged international order as long as it is accepted as the core principle of international law.

So many analysts acknowledge the burst in new actors in the international system: substate actors, regions and cities and also non-state actors like NGOs, large public and private corporations but all struggle against dominant state actors. National sovereignty dominates international relations and often leads to unilateral actions that undermines wider cooperation.

Then there is ‘obsolescence’.  This focuses around the elements of the system, especially the Formals that were put in place at the end of World War Two at a time when the Global South that has had such a recent impact on international relations existed primarily as colonies of the West:

Obsolescence has to do with the origins of the current global system, the architecture of which dates from arrangements made after the Second World War. The ‘universal’ nature of these arrangements is increasingly seen as a product of a past pattern of Western dominance at a time when new nation states are now reshuffling the old power distribution …

Lamy then targets the impact of the evolving international order:

All in all, the previous international order is being shaken by increasing North-South and East-West tensions and frustrations, and by a change in the balance between geoeconomics and geopolitics, the former losing the force it had gathered in recent decades, and the latter regaining its past dominance over world affairs. We are thus moving toward less of a rules-based system, and more toward the use of force. This context obliges us to consider new paths, tentative as they may be.

And finally Lamy underlines the rise of geopolitical tensions, especially between China and the United States, and the impact that these tensions have had on the current multilateral order:

The intensification of the US-China rivalry is the third main factor shaping the demise of the international order, as this rivalry increasingly pits the two main world superpowers against each other. Indeed, they now believe they have become dangerously vulnerable to each other—hence a change of view on both sides about globalization. Whereas the US and China previously celebrated the benefits of increased economic interdependence in fostering development and reducing poverty, they are now trying to address what today they consider as overdependence and have embarked on a decoupling journey which challenges the rest of the world with hard binary choices and which permeates international life in the form a sort of ‘cold war 2.0.’

So what is to be done? How can a multilateral system be revivified and made effective – bringing greater stability to the global order and energizing transnational global governance efforts?

That’s where we will start in the next Post.

Image Credit: Geneva Interdisciplinary Centre for Economics and Law

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China, seemingly, stays the course

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It is hard to resist not commenting on Donald Trump’s views, so I will if just briefly. In this instance the comment is over Kamala Harris’s racial makeup. It is ‘weird’ as the Democrats have started saying. In fact that barely describes his comments on her. Mind you, I doubt that it is the last time we will hear such ‘jaw dropping insights’ from Trump when it comes to his likely opponent Kamala Harris.

All right, let’s turn to today’s focus – the state of US-China relations following China’s Third Plenum – really focusing on the Third Plenum. This gathering is the Third Plenum of the 20th Party Congress, which brought together the Party’s top leadership, including all the members of the Central Committee and the Politburo of the Chinese Communist Party.  Third Plenums in particular have especially been closely followed. Why? Well, it really began with the Third Plenum of the 11th Party Congress in December 1978. That Third Plenum ushered in a series of policy changes championed at the time by Deng Xiaoping. This Plenum was in retrospect the start of the ‘Reform and Opening Era’ which was followed by the Third Plenum of the 14th Party Congress when the leadership identified the goal of creating a ‘socialist market economy’. And, at the 18th Party Congress in November 2013, the CCP emphasized in that Third Plenum,  “the decisive role of the market in allocating resources,”. So, it is not unreasonable for experts, officials, etc. to look at each 5-year Third Plenum to identify signals for domestic economic reform which many then anticipate impacts on the global economy with China’s increasingly central role on the international economy.

It’s not a surprise, then, that there was a degree of anticipation for this Third Plenum which had been postponed for months, especially given the flagging Chinese economy. Our colleagues at CSIS including Jude Blanchette and Scott Kennedy described the tortured passage of policy creation:

According to a CCP website, the document went through 38 drafts. Right after the conclave ended, the CCP issued a communique (English, Chinese) summarizing the results of the meeting. On Sunday, July 21, the text of the full, far more detailed Decision (English, Chinese) was issued, which provides a stronger foundation for evaluating the meeting’s significance.

So where are we and what consequences are likely to follow the policy pronouncements?

There was a lot of anticipation. As pointed out by Bert Hofman in his Substack Post: 

This year’s third plenum was highly anticipated due to several factors.  The multitude of structural challenges that China’s economy is facing—debt, demographics, demand, deflation, and decoupling—require the robust economic reforms that third plenums tend to deliver. Second, China’s propaganda machine had built up the plenum’s importance, comparing it with breakthrough plenums of the pasts.

But for most analysts the outcomes have been rather disappointing. As pointed out, again by Bert Hofman, the hoped for policy tilt and more toward markets and/or greater domestic consumption is not evident in the Declaration:

This year’s plenum has dropped the decisive role of the market.  Instead, it  proposes that the party should “better leverage the role of the market.” This is hardly an encouragement of the private sector, whose confidence is still recovering from regulatory crackdowns and COVID lockdowns.  At the same time, in a press conference after the conclusion of the plenum Han Wenxiu, deputy director of the Central Financial and Economic Affairs Commission’s general office, and a main drafter of the plenum decision document, said that it was “necessary to create a favourable environment and provide more opportunities for the development of the private sector” in China.

Nevertheless, the omission of the market’s decisive role is in line with the more statist view on development that has been gaining grounds under Xi Jinping, and that the private sector will be increasingly guided by the party and restricted by regulation.

 

But the nature of reforms has changed—whereas in previous plenums reforms were predominantly aimed at facilitating marketization and liberalization of China’s economy, they are now meant to strengthen the policies and institutions that underpin Xi Jinping’s view of the world.

The party-state dominance seems to be fully in charge. And China can be expected to stay the current course for domestic economic growth and prosperity. As Scott Kennedy argues:

The Communique and Decision give the distinct impression that despite the economy’s various structural problems and cyclical downturn, the CCP is not going to change course, but instead will intensify its efforts to steer the economy on to a sustainable long-term path. The central focus for generating “high-quality development” will be on expanding focus on advanced technologies, what are now ideologically described as “new productive forces” (新质生产力).

 

That said, the Plenum’s analysis and policy proposals on the economy are likely to draw a more skeptical reaction from a variety of corners, domestic and international, because of its deeply statist focus: 1) A strong emphasis on the central role of China’s party-state in directing the economy; 2) The prioritization on investment and production as the drivers of growth and far less attention to consumption and households; 3) Continued support for the “public sector” and state-owned enterprises (SOEs) even while pledging to create a level playing field for private firms; 4) A discussion of the global economy that proposed incremental expanded market access to China while stressing the need for China to leverage its large market for its own benefit; and 5) The expansive discussion of national security and the need to align economic policy with national security, which as Jude Blanchette notes, is centered around the security of the CCP.

Scott’s colleague at CSIS, Claire Reade, underlines that trade partners are unlikely to be fooled by this Plenum Declaration and trade tensions as a result are unlikely to abate and that’s without taking into account the likely economic earthquake of a second Trump Administration:

The latest Third Plenum Decision declares that “overall, we have accomplished the reform tasks” set out in 2013. Since this is patently not the case, it is particularly discouraging. The decision ironically then highlights the gap between its triumphant conclusion and reality by going on to pledge that by 2029, the market will determine the allocation of resources, and private domestic and foreign enterprises will obtain equal treatment with state-owned enterprises.

On balance, trading partners need to continue to be savvy and proactive in taking steps to protect their economies against this massive, state-heavy economy, and companies need to look carefully at their own risk management.

It is not surprising that various Chinese experts are suggesting that a more incremental approach was always a more likely approach of the President and the Party. Here is Huang Yiping, who is the Dean of the National School of Development at Beida, or Peking University, assessing on the Pekinology Substack Post the policy approach coming out of the Third Plenum:

The first point you probably all saw is that the Asian market dropped after the Third Plenum, especially after the full document was out. So some people felt a little bit pessimistic. My own sense, my take, is that the market was probably too optimistic about what they should expect.

So some people felt a little bit pessimistic. My own sense, my take, is that the market was probably too optimistic about what they should expect.

 

In fact, if you were paying attention to what the President himself was saying and the message government officials were trying to convey to the public. It was pretty clear this would not be a grand-scale liberalization program. This will be about reform, about modernization. But the key approach, the President outlined himself very clearly. He called it running towards the problems and trying to correct them. So it’s more like a down-to-earth and very practical approach—when you try to see the problems, you try to overcome them.

 

So when you say, well, the market is disappointed. That’s probably true, but either because the expectation was just overly too high or No. 2, I think the reason why investors are not very upbeat at the moment is because the macroeconomy is not doing particularly well.

Huang Yiping is aware, however, of the consumption problem:

Weak consumption causes two problems. No. 1 is you obviously would easily end up with a domestic overcapacity problem, right? You produce a lot, you invest a lot, and then the final consumption demand is very weak. That means there will be a certain portion of the capacity you cannot find domestic buyers for, and you call it overcapacity. That’s why during the last 45, 46 years of Chinese reform, we almost always had the overcapacity problem.

I think the macroeconomic problem is there is a macro imbalance. Consumption and demand and supply are not very balanced. So that’s one big issue.

So where does that leave us? I anticipate there will be continuing if not growing trade tensions with the US and with Europe as well as China continues its ferocious pace of manufacturing exports and fails to encourage greater domestic consumption. At least to constrain these tensions and protective trade actions in the absence of the WTO, it might be useful to try and negotiate VERs – ‘voluntary export restraints’ with China. It is not optimal – far from it – but it could avoid a trade ‘bloodbath’.

An important opportunity has been missed for the moment and may in fact be even more dramatically lost if Donald Trump wins the next election in  November. Let’s hope the US electorate is smarter than that.

Image Credit: CNN

Responding to Disorder

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I have to start with the Biden press conference last night, of course. I wish Biden’s performance could allay concerns about his competence but, unfortunately, it was not good enough to do that.  Biden was certainly less combative than what was on display earlier but the stubbornness has not abated. And the mistakes remain. So, the Democrats are stuck for the moment.

Let’s turn now to the focus of this Post: coping with the disorder in the current international system and the real fear for the electoral outcome.

My close colleague, Yves Tiberghien, Professor of Political Science and the Konwakai Chair in Japanese Research, and also the Director of the Center for Japanese Research at the University of British Columbia put his finger on the stability/instability tension in the current global order. As he wrote recently for the Asia-Pacific Foundation:

In the current moment we are witnessing a rapidly changing geopolitical environment, with several dangerous hot spots and an acceleration of tit-for-tat dynamics.

The prime movers in this situation are China and the U.S., each animated and constrained by their domestic politics that sometimes limit their ability to deeply understand each other and engage in strategic, long-term calculations. The moves that each of them makes – which are usually framed as being defensive and reactive – are feeding a cycle of interactions that is transforming the region.

The central tension between the two leading powers is not aided by the current fallout from the Russia-Ukraine conflict and the war in Gaza but the macro disorder is driven in the first instance by difficult US-China interests. And, it is because of the knotty interactions and the prospect for even greater bilateral tensions that so many of us are kinda ‘quaking in our boots’ over the impending national US elections. I was caught by the insight and ‘unexpressed’ emotion of one of the NYT’s most well known Opinion Columnists, Tom Freidman. He just recently wrote in the NYT, a piece titled: “The Devil May Be Enjoying This Election Season, but I Am Not”:

Both men running for president right now are unfit for the job: One is a good man in obvious cognitive and physical decline, and the other is a bad man who lies as he breathes, whose main platform is revenge — and who is in his own cognitive tailspin.

It kinda chills one’s ‘political soul’ when contemplating current US politics and policy.  It leaves open the prospect of dangerous international politics that demands effective Presidential leadership – which is exactly what seems to be missing in the current presidential contest. As Friedman writes:

At the same time, we are in the middle of defining the post-post-Cold War order, now that the U.S.-dominated post-Cold War order has come unstuck since the Russian invasion of Ukraine. Managing a hostile Russia — aligned with an increasingly hostile China, aligned with malign actors like Iran and North Korea, and super-empowered nonstate actors like Hamas, the Houthis and Hezbollah — will take not only incredibly wise U.S. leadership but also a U.S. leader able to forge multiple alliances. The post-post-Cold War world can’t be managed by a lonely American superpower telling all its allies to spend more on defense or we will leave you to the tender mercies of Vladimir Putin.

Turning back to Yves Tiberghien for a moment, Yves identifies 3 hotspots in the current international scene: The Philippines, North Korea and Taiwan. Let me look at just one, what Yves identifies as the number one hotspot, the Philippines:

This is the top hot spot right now, and one without good safeguards or guardians. Some view it as perhaps the closest example in the region to a 1914 scenario. There is an urgency for talks between high-ranking officials in the U.S. and China talks, but the Biden Administration is distracted.

Now I will avoid any comparative historical references, – you know, it is just like World War I, or just like the Iraq decision etc.  I am not attracted to this form of analysis. And you should be careful as well. For my part having examined, rather long ago, the dramatically complex interactions and unique diplomatic actions of long ago political figures, including especially those political decisions leading up to World War I – thank you James Joll, these comparisons fail to attract me. The primary reason is most analyses comparing historical crises focus on the similarities but almost never examine the often dramatic differences in these historical comparisons. There are not only similarities but differences as well. And both must be examined, though they seldom are.

So let’s leave historical comparisons aside and let’s turn to a recent analysis. I was very pleased to see a just released piece by Ryan Hass in Foreign Affairs, titled: “Avoiding War in the South China Sea”. Ryan is from Brookings and is currently the Director of the John L. Thornton China Center, Senior Fellow – Foreign Policy, Center for Asia Policy Studies, John L. Thornton China Center and he is also the Chen-Fu and Cecilia Yen Koo Chair in Taiwan Studies. Ryan served from 2013 to 2017, as the director for China, Taiwan and Mongolia at the National Security Council (NSC) staff. From what I know he retains links with many in the Biden Administration.

There are a number of valuable insights that Ryan conveys in the current problem. Let’s first start with the problem. The South China Sea (SCS) dispute arises over the Spratly Islands with ongoing territorial disputes among Brunei, China, Malaysia, the Philippines, Taiwan, and Vietnam concerning “ownership” of the Spratly Islands, a group of islands and associated “maritime features” (reefs, banks, and cays etc.) and strong positioning in the South China Sea. The central bully in this story is China that essentially claims all of the South China Sea.  Nevertheless, the others also maintain their individual country claims. In 1999 the Philippines ran an old vessel, the Sierra Madre aground on the Second Thomas Shoal. China initially demanded that the Philippines remove the vessel and has harassed the Philippine efforts to resupply the military personnel that remain on the vessel though to this point China has been unsuccessful in preventing Philippine resupply. As Ryan points out:

The risk remains high that an incident could result in the death of a Filipino soldier, potentially triggering the U.S.-Philippine Mutual Defense Treaty and bringing American and Chinese forces to the brink of conflict.

That is the heart of the problem for the US, China and the Philippines. Threading the needle is what it will take; and of course that is exactly what chills those of us looking at the current race for the presidency. But Ryan suggests a policy that enhances deterrence and limits what Yves described as ‘tit-for-tat’ actions.

For Washington, success is upholding the credibility of its alliance commitments, avoiding conflict with China, and preventing Chinese occupation of Second Thomas Shoal. Achieving these results will require Washington to weigh every policy decision against whether it does more to prevent or provoke a crisis. Second Thomas Shoal is a strategic challenge with a military dimension.

It is a touchy balance of maintaining commitment, and thereby deterring China and at the same time not giving full rein to the strategic – and not so strategic actions in the US and in fact in the Philippines,  to tip over into conflict. Reflecting this balance is Ryan’s positioning:

It is not a military problem with a military solution. Washington must resist pressure to frame this issue as a test of wills between the United States and China and instead leverage Beijing’s bullying at Second Thomas Shoal to strengthen its relationships in the region.

Given the conflicting imperatives of the three major participants, the United States will need to walk a tightrope. It cannot allow itself to beseen as passive in the face of Chinese pressure against its treaty ally. On the other hand, Washington must preserve its position as defender of the status quo, thereby sharpening the contrast with China’s revisionist attempts to alter the situation at Second Thomas Shoal.

It is, as Ryan points out, critically important to signal soundly to China, US commitment without creating reactive offense:

U.S. policymakers must resist the urge to turn Second Thomas Shoal into a contest of wills between the United States and China and urge Beijing to do the same. The more the standoff becomes publicly framed as a showdown between great powers, the more likely that nuclear-armed rivals could find themselves in a nose-to-nose confrontation over a rusting boat.

And I think sensibly Ryan urges the following:

Washington should enlist as many concerned countries as possible to privately counsel Beijing against further escalation. Greater engagement by more actors, especially the Southeast Asian states that Beijing seeks to pull closer, will make the current dispute seem less like a binary clash between the United States and China.

The United States’ best option for limiting risk is to chart a middle path between succumbing to a military test of wills and putting pressure on the Philippines to give in to Chinese pressure. Conflict is possible, but far from preordained.

All this examination underscores the complexity and careful steps required to contain tit-for-tat US-China actions that could lead to a security disaster. It is hard now not to contemplate the worst with either crazy Trump, for sure but now possibly a seriously diminished Biden. We can only hope that the presidential outcome is not as currently predicted.

Image Credit: Al Jazeera

 

Calming US-China Tensions

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My colleague, Michael Swaine, now a Senior Research Fellow at the Quincy Institute for Responsible Statecraft, has produced two very insightful pieces on US-China relations. The longer piece can be found as a Quincy Brief and well worth reading. But if that is not possible, then a shorter examination is set out by Michael at  WPR. The ‘heart’ of both pieces is that stability arising from the Biden-Xi Summit at the margin of the APEC meeting in  San Francisco late in 2023 is far less than meets the eye. As Michael narrates in the WPR piece:

All this means that, far from developing the incentives and the means to avert a crisis or conflict, efforts on both sides to reassure each other on their vital interests are ringing increasingly hollow, with the result that both continue to view each other as engaging in evasive or, worse yet, hypocritical and duplicitous behavior.

And with respect to Taiwan, set out in the Quincy Brief, Michael paints a rather bleak picture:

The reality, however, is that the features and trends pushing both countries toward a confrontation over Taiwan persist, fueling a dangerous, interactive dynamic that could quickly overcome any diplomatic thaw between the world’s foremost powers.

Why have the two leading powers come to such a serious pass in the face of what appeared to be a solid effort to stabilize the relationship at the margins of APEC? Here Michael is clear:

Achieving this requires each nation to match its formal statements clearly and reliably with its actual behavior—in other words, to avoid hypocrisy—with regard to what each side regards as its vital interests, and to do so consistently over time. This in turn requires both sides reaching a mutual understanding of what their vital interests are, the meaningful assurances regarding them that each desires, and what would constitute violations of those assurances and, hence, threats to the concerned party’s vital interests. …

Unfortunately, despite some initial efforts, neither Washington nor Beijing has thus far met these requirements. Perhaps the most prominent example of this failure involves what began as the “Four Noes and One No Intention,” but which Beijing now calls the “Five Noes.” These reportedly affirm that the United States: does not seek a new Cold War with China; does not aim to change China’s political system; is not revitalizing its alliances to counter China; does not support Taiwan’s independence; and does not seek a conflict with China. [WPR]

From Michael’s perspective the United States has failed to reassure China that indeed it is committed to the “Five Noes”. Then, added to this is the failure to provide the reassurances necessary over Taiwan. As Michael describes the Taiwan situation:

  • The increasingly high (and arguably growing) stakes the Taiwan issue presents for both Beijing and Washington;
  • Deepening levels of domestic threat inflation on each side;
  • The growing tendency on both sides to worst case the motives and intentions of others (fed by a persistent lack of trust) while failing to recognize the interactive nature of the rivalry;
  • A resulting steady erosion of confidence in the original, stabilizing bilateral understanding regarding Taiwan reached between Beijing and Washington during the 1970s normalization process, and a related stress on deterrence over assurance;
  • The absence of effective bilateral crisis prevention and management Mechanisms”. [Brief]

While the two articles focus on somewhat different aspects of the US-China relationship, the big conclusion I draw from these two very insightful pieces by Michael is that both leading powers are providing insufficient assurances to the other of the desire of each to maintain the status quo and peaceful relations.

The rising gyre of action and response between the two is underlined by Michael:

In China, U.S. assertions that the One China Policy has not changed, or that its relations with Taiwan remain unofficial, thus fall on deaf ears. And the apparent hypocrisy of U.S. behavior is then used to justify more provocative Chinese actions, which lead many Americans to conclude that Beijing is jettisoning its commitment to peaceful unification.

This worsening situation is made even more dangerous by the absence of substantive crisis prevention and management mechanisms and procedures between the two nations. It is true that Washington and Beijing have recently agreed to resume a nascent military–to–military crisis communication working group that remained suspended since 2019 and appear to be working to revive a few other more established agreements designed to avoid incidents in the air and at sea. [Brief]

For Michael the heavy reliance on military deterrence, as opposed to material bilateral reassurance is at the heart of the shaky relations between the two. What is needed is clear, according to him:

There are, however, concrete steps that the U.S. government, Congress, and civil society can take to reduce the mounting tension around the Taiwan issue and remove it as a major factor driving the growing rivalry between Washington and Beijing. Most importantly, both sides must reverse the tendency to regard the island as a surrogate for the overall U.S.–China strategic competition.

This requires, as a first step, efforts to reduce the overall intensity of the bilateral rivalry, by eliminating the heretofore divisive, often politically–induced, zero–sum rhetoric that has dominated much of the dialogue in Washington and Beijing, and ending, to the extent possible, the mismatch between the words spoken and actions taken on both sides.” “… Such overblown rhetoric and hypocrisy deepen distrust and signal that there is no potential common ground on critical issues such as Taiwan’s future. They reinforce worst–case assumptions about motives and therefore increase the likelihood that manageable crises will become severe conflicts.[Brief]

Michael then sets out a rather lengthy list of reassuring statements that the US might express to undermine any trajectory toward confrontation and conflict. As he says:

These statements would represent a clear shift from the current drift toward confrontation and abandonment of the “One China” normalization understandings with China over Taiwan. They would not constitute a new U.S. policy so much as an attempt to restore policy understandings that have maintained peace and stability in the Taiwan Strait for decades.”[Brief]

In an ideal world such efforts backed by equally reassuring statements and actions from China could well represent an optimal path for US-China relations in the immediate circumstances. Unfortunately, in a Presidential election year and with the heavy cloud of a possible Trump re-election and his growing wild rhetoric of an 8-month campaign, it seems to me Michael’s solutions in these circumstances may well unfortunately be overreach. What therefore can be done in this difficult period.

It would be nice if a Leaders Summit was planned relatively soon but unfortunately the Brazil G20 Summit is scheduled to  take place after the US election. Thus a bilateral meeting at the margins of a summit is not going to be possible. Bad timing I’m afraid. In the face of a poor calendar the best that might be hoped for are confidence building gatherings of senior officials. Here too the G20 can be useful. There are a large number of ministerial sessions that provide the setting for side meetings by US-China senior officials. These bilateral side gatherings provide opportunities where expressions of reassurance could be had and public statements made that underline the US-China effort to maintain stability and express specific collaborative policy initiatives. It might provide just the kind of opportunities that Michael believes might help stabilize US-China relations.

Image Credit: France24

This Post first appeared at my Substack, Alan’s Newsletter https://globalsummitryproject.substack.com/p/calming-us-china-tensions?r=bj&utm_campaign=post&utm_medium=web&triedRedirect=true

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US-China Relations- How difficult is the relationship?

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This week I, and just about everybody else holding some interest in sport, or at least in innovative commercials were distracted by the events leading up to, and including, the 58th Super Bowl. Notwithstanding the quickening approach of this Super Bowl Sunday, however, I was drawn to an examination by a number of experts for the Brookings Institution of the US-China relationship.

So in this somewhat shortened Post, thanks to the Event,  I thought I might pay a bit of attention to their useful views.

Graham Allison, one of the experts called on to respond to the question, pointed to the issue posed to the experts:

The invitation from Brookings’ debate organizers asked: “Is the U.S.-China relationship the most consequential bilateral relationship for the United States in the world?

He went on to lay out just why the bilateral relationship is so consequential:

My answer is: yes. If not China, who?

China is:

– one of only two nations that poses an existential threat to the United States.

– the only nation that poses a systemic threat to the U.S. position as the global leader, architect, and guardian of the post-World War II international order.

– the largest emitter of greenhouse gases—accounting for more emissions in 2022 than the United States and Europe combined.

– the second backbone of the world economy: the manufacturing workshop of the world, the No. 1 trading partner of most countries in the world (including the European Union and Japan), and the supplier of most critical items (including everything green and clean) in global supply chains.

– both a classic Thucydidean rival and America’s inseparable, conjoined Siamese twin.

The folks who commented included, as I noted above, Graham Allison, Douglas Dillon Professor – Harvard, and additionally, John Cartin, Adjunct Professor, Walsh School of Foreign Service – Georgetown, Elizabeth Economy, Senior Fellow – Hoover Institutions and Susan Thornton, Senior Fellow – Paul Tsai China Center, Yale Law School, and nonresident fellow, the Brookings Thornton China Center.

It is, for sure, a significant question. After all, the state of the US-China relationship, largely without question, drives the geopolitics of current international relations. And the answers did not fail to satisfy. The assessments by these experts are all very revealing and if you have a moment the answers are worth a read. I say this notwithstanding that not all even saw the relationship as most consequential. In fact Elizabeth Economy promoted a somewhat contrary notion. As she argued:

There are many ways to describe the U.S.-China bilateral relationship. For example, the relationship is the world’s most complex, most challenging, or most competitive. However, the relationship is not “the most consequential in the world for America. Far more consequential is the United States’ relationship with its network of allies and partners in Asia, Europe, and North America. Unlike China, the United States’ allies and close partners share the same values, norms, and strategic objectives. … However, over the almost half-century since the normalization of the U.S.-China relationship, the bilateral relationship has never realized the potential Washington imagined. The two countries’ values, norms, and interests have increasingly diverged, and the ties that have bound them together have increasingly frayed.

In his response, Allison is unwilling to let the Economy argument pass and sets it out his views starkly:

In arguing against the significance of the U.S.-China relationship, both Economy and Cartin duck the reality of China’s existential threat. The brute fact is that China is one of only two nations in the world with nuclear arsenals that constitute genuine “existential” threats—meaning threatening existence.

While not unanimous, then, still I think most would underscore that the US-China bilateral relation is highly consequential. Having said that though, I was most taken with Susan Thornton’s response. Now admittedly I know Susan most of all the experts as she is a key figure in our own China-West Dialogue (CWD). But she argued and targeted exactly what I would have also zoned in on. Susan accepted that the relationship was indeed the most consequential but then targeted what I would have as well: the key to the relationship and its likely impact on the global order is the state of domestic affairs in the US. As Susan argued:

And just to be clear, relations with or actions taken by any other single country will have little consequence for Americans in the world compared to our own decisions and actions. Our fate lies in our own hands. … In short, America cannot escape “China impact.” China is big, capable, changing rapidly, and operating in all priority zones. Still, obsessing over what China does or might do is a mistake that will carry large opportunity costs for America that it cannot afford. China may be the most consequential “other country,” but we need to take responsibility for our own future, a future that will involve “China impact,” but that we can shape.

Absolutely. Couldn’t agree more. In the face of the real possibility of a return of Donald Trump as American President, most anything, and likely everything else pales in comparison to that reality and the real chaos likely to be generated by his return both for domestic and US foreign policy.

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