Tag: China

Military Cooperation with China: RIMPAC as a Model for the Future

The Rim of the Pacific Exercise recently concluded in waters near Hawaii.  For the first time China joined the drills.  It was a small but positive step for integrating Beijing into more international institutions.

RIMPAC started in 1971.  This year there are 23 participants, including the People’s Republic of China, which explained that the maneuvers are “an important mission of military diplomacy” and a means to strengthen “friendly relations with countries of the South Pacific through public diplomacy.”

Beijing’s participation comes at a time of significant regional tension.  The PRC’s more aggressive stance in asserting its territorial claims in the South China Sea and Sea of Japan have led to dangerous maritime confrontations. 

RIMPAC offers an opportunity to create some countervailing pressure in favor of a less threatening regional naval environment.  At the political level inviting Beijing to participate demonstrates respect for China’s increased military power and international role.   Doing so also counters the charge that Washington is seeking to isolate and contain the PRC.

Moreover, inclusion hints at the benefits for Beijing of a civil if not necessarily friendly relationship with its neighbors as well as America.  No doubt, the direct pay-off for China from RIMPAC is small. 

But to be treated as an equal and regular participant in international affairs is advantageous.  Although any great power must be prepared to accept unpopularity when necessary, in general a friendly environment is more conducive to ensuring both peace and prosperity. 

Deterring China Isn’t Hard

My op-ed today in China US Focus gives five reasons why the United States and its Asian allies will deter Chinese military aggression for the foreseeable future. The argument responds to commentators who worry that U.S. military spending cuts or passivity elsewhere have damaged our credibility to defend Asian allies and thus encouraged China to use its growing military for conquest.

The bulk of the article concerns the particulars of U.S. military superiority in Asia, and why recent Pentagon cuts don’t much lessen it. One conclusion is that deterring war is easier than you generally hear.

Washington’s foreign policy elites have a narcissistic take on deterrence; they see it teetering with every foreign policy decision that troubles them. But East Asia’s stability remains robust—insensitive to the annual fights in Congress—because war remains a losing prospect for all major powers.

This is a good place to put that conclusion in historical context. Technology and economics have shifted the cost-benefit calculus of conquest, making it generally counterproductive. That is an explanation for the steep decline in interstate warfare. Cold War nuclear history, as I discussed in a recent co-authored report, supports that point. The balance of terror—mutual deterrence—between the United States and the Soviet Union was not delicate. Arms control agreements and shifting nuclear weapons plans barely affected stability. As John Mueller argues, conventional deterrence, reinforced by the memory of the world wars, was instrumental in keeping the peace. Nuclear weapons were largely overkill.

So the pundits now bellowing about the credibility lost because of crossed red lines or Crimea are using a theory of deterrence that lacks historical basis. Deterrence is especially robust in Asia, where water or mountains separate most major rivals, aiding defense of the status quo. Even a total withdrawal of U.S. forces and defense commitments from East Asia wouldn’t create a dangerous imbalance of power there.

Sadly, withdrawal faces high political hurtles today. For now, probably the best we can hope for is that all the beltway consternation about eroding credibility will accidently reduce free-riding. As I put it in the op-ed:

If allies take U.S. commentary about insufficient pivots and failed red lines too seriously, they may worry enough to pay more for their own defense and give U.S. taxpayers a break. Letting them sweat a bit is in the U.S. interest.

For more on these themes, come see Barry Posen discuss his book on U.S. military strategy next week at Cato.

Cyber-Espionage (Not Necessarily Implicating U.S. Agencies) Returns to the Headlines

The Washington Post reported this morning that the U.S. government is “charging members of the Chinese military with conducting economic cyber-espionage against American companies.”  According to the story, Attorney General Eric Holder will “announce a criminal indictment in a national security case,” naming members of the People’s Liberation Army.

If you will recall, cyber-security, cyber-espionage, and cyber-theft of trade secrets and other intellectual property belonging to American businesses started becoming prominent sources of friction in the U.S.-China relationship about 18 months ago before suddenly dropping off the front pages 11 months ago to make way for revelations of domestic spying by the U.S. National Security Agency.  Somehow, the notion that Chinese government-sponsored cyber-theft broached a red line lost some of its luster after Americans learned what Edward Snowden had to share about their own government.

But today the issue of Chinese cyber-transgression is back on the front pages.  Never before – according to the Washington Post – has the U.S. government leveled such criminal charges against a foreign government.  The U.S. rhetoric has been heated and, just this afternoon, the Chinese government responded by characterizing the claims as “ungrounded,” “absurd,”  “a pure fabrication,” and “hypocritical.”

While the U.S. allegations may be true, given well-publicized U.S. cyber-intrusions, it isn’t too difficult to agree with the “hypocritical” characterization either.  Perhaps that’s why the U.S. government is attempting to distinguish between cyber-espionage, which is conducted by states to discern the intentions of other governments – and is, from the U.S. perspective, fair play – from “economic” cyber-espionage, which is perpetrated by states or other actors against private businesses and is, from the U.S. perspective, completely unacceptable.  It’s not too difficult to understand why the United States has adopted that bifurcated position. The Washington Post quotes a U.S. government estimate of annual losses due to economic cyber espionage at $24-$120 billion.

Taiwan Is the Success Story, not China

Which nation is richer, Belarus or Luxembourg?

If you look at total economic output, you might be tempted to say Belarus. The GDP of Belarus, after all, is almost $72 billion while Luxembourg’s GDP is less than $60 billion.

But that would be a preposterous answer since there are about 9.5 million people in Belarus compared to only about 540,000 folks in Luxembourg.

It should be obvious that what matters is per-capita GDP, and the residents of Luxembourg unambiguously enjoy far higher living standards than their cousins in Belarus.

This seems like an elementary point, but it has to be made because there have been a bunch of misleading stories about China “overtaking” the United States in economic output. Look, for instance, at these excerpts from a Bloomberg report.

China is poised to overtake the U.S. as the world’s biggest economy earlier than expected, possibly as soon as this year… The latest tally adds to the debate on how the world’s top two economic powers are progressing. Projecting growth rates from 2011 onwards suggests China’s size when measured in PPP may surpass the U.S. in 2014.

There are methodological issues with PPP data, some of which are acknowledged in the story, and there’s also the challenge of whether Chinese numbers can be trusted.

But let’s assume these are the right numbers. My response is “so what?”

I’ve previously written that the Chinese tiger is more akin to a paper tiger. But Mark Perry of the American Enterprise Institute put together a chart that is far more compelling than what I wrote. He looks at the per-capita numbers and shows that China is still way behind the United States.

To be blunt, Americans shouldn’t worry about the myth of Chinese economic supremacy.

But that’s not the main point of today’s column.

Instead, I want to call attention to Taiwan. That jurisdiction doesn’t get as much attention as Hong Kong and Singapore, but it’s one of the world’s success stories.

And if you compare Taiwan to China, as I’ve done in this chart, there’s no question which jurisdiction deserves praise.

China Grapples with Mao Zedong’s Legacy at His 120th Birthday

December 26 is the 120th anniversary of Mao Zedong’s birth, typically a date of great celebration in China. But this year the Chinese government seems somewhat ambivalent about celebrating Mao’s disastrous achievements. It’s about time. 

Many countries have a founding myth that inspires and sustains a national culture. We’ve just seen South Africa and the world celebrate the accomplishments of Nelson Mandela, the founder of that nation’s modern, multi-racial democracy. In the United States we look to the American Revolution and especially to the ideas in the Declaration of Independence of July 4, 1776. 

The Declaration of Independence, written by Thomas Jefferson, is the most eloquent libertarian essay in history, especially its philosophical core:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

The ideas of the Declaration, given legal form in the Constitution, took the United States of America from a small frontier outpost on the edge of the developed world to the richest country in the world in scarcely a century. The country failed in many ways to live up to the vision of the Declaration, notably in the institution of chattel slavery. But over the next two centuries that vision inspired Americans to extend the promises of the Declaration—life, liberty, and the pursuit of happiness—to more and more people.

China of course followed a different vision, the vision of Mao Zedong. Take Mao’s speech on July 1, 1949, as his Communist armies neared victory. The speech was titled, “On the People’s Democratic Dictatorship.” Instead of life, liberty, and the pursuit of happiness, it spoke of “the extinction of classes, state power and parties,” of “a socialist and communist society,” of the nationalization of private enterprise and the socialization of agriculture, of a “great and splendid socialist state” in Russia, and especially of “a powerful state apparatus” in the hands of a “people’s democratic dictatorship.”

Tragically, unbelievably, this vision appealed not only to many Chinese but even to Americans and Europeans, some of them prominent. But from the beginning it went terribly wrong, as really should have been predicted. Communism created desperate poverty in China. The “Great Leap Forward” led to mass starvation. The Cultural Revolution unleashed “an extended paroxysm of revolutionary madness”  in which “tens of millions of innocent victims were persecuted, professionally ruined, mentally deranged, physically maimed and even killed.” Estimates of the number of unnatural deaths during Mao’s tenure range from 15 million to 80 million. This is so monstrous that we can’t really comprehend it. What inspired many American and European leftists was that Mao really seemed to believe in the communist vision. And the attempt to actually implement communism leads to disaster and death.

Don’t Wreck Relations with Russia and China over Syria

Most opponents of the Obama administration’s plan to launch missile strikes against Syria have rightly focused on the possible costs in American blood and treasure if the United States becomes entangled in that country’s civil war. There is, however, a more subtle, yet extremely worrisome, cost: the potential damage to America’s relations with other important nations, especially Russia and China.

Russian leaders have been extremely outspoken in opposing military measures against Syrian President Bashar al-Assad, especially if such actions are taken without approval from the UN Security Council, on which Russia possesses a veto power. Russian President Vladimir Putin also has warned that a U.S.-led attack on Syria could further destabilize the Middle East, proving “catastrophic” for that region and beyond. Moscow has now dispatched three naval vessels to the eastern Mediterranean to show support for Assad and warn Washington against rash action.

China has been less vocal than Russia in criticizing U.S. policy toward Syria, but Beijing is also opposed to the course that the Obama administration has adopted. The Chinese government shares Moscow’s anger at Washington’s growing tendency to bypass the UN Security Council on matters of war and peace. That is a source of discontent that has been building for a decade-and-a-half. Western (especially U.S.) policy regarding Kosovo—both the war in 1999 and the decision to bypass the Council and grant that province independence from Serbia in 2008—became a prominent source of irritation. The U.S.–led invasion of Iraq in 2003, again without Security Council approval, added to the list of Sino-Soviet diplomatic grievances against Washington and its allies. Most recently, the West’s cynical misuse of a Council resolution authorizing air strikes in Libya, supposedly to prevent Muammar Gaddafi’s forces from attacking innocent civilians, antagonized both Beijing and Moscow.

The Obama administration’s transformation of the Libya resolution into a vehicle for regime change makes Russian and Chinese officials especially suspicious that the proposed limited missile strikes to punish Assad for the use of chemical weapons will be perverted in the same fashion. And it is clear that Beijing and Moscow are tired of having Washington disregard their views and flout the interests of their countries.

U.S. leaders need to do a far better job of calculating America’s foreign policy priorities. Maintaining good relations with Russia and China outweigh any theoretical gains that might flow even from a well-executed policy regarding Syria. And the prospects of a meaningful U.S. policy “victory” in that country are midpoint between slim and none.

Conversely, we need cooperation from Moscow and Beijing on a host of important issues. Without Russia’s help, there is little chance for serious progress on nuclear issues, either reducing the bloated U.S. and Russian stockpiles of such weapons or discouraging Iran and other countries from barging into the global nuclear weapons club. China’s cooperation is even more important. Not only is China a major purchaser of U.S. government debt, which in an era of chronic budget deficits is no trivial matter, but the country is an increasingly crucial U.S. trading partner and a vital factor in the overall global economy. An angry, recalcitrant China would not be good for America’s or the world’s economic health.

China is also the most important player in efforts to discourage North Korea from engaging in reckless, destabilizing conduct. During the first half of 2013, Beijing appeared to grow weary of Pyongyang’s disruptive, provocative conduct and began to exert pressure on its obnoxious client. That pressure has been at least one factor in North Korea’s more conciliatory behavior in the past few months. But China will have little incentive to continue that course if Washington tramples on Beijing’s interests in Syria and the rest of the Middle East.

Obama administration officials must avoid policy “tunnel vision.” Pursuing a dubious strategy in Syria is bad enough, even taken in isolation. Doing so when it will likely damage U.S. relations with two major powers in the international system is dangerously myopic.

Syria’s Annual Inflation Hits 200%

In an attempt to beat Western sanctions and halt the fall in the Syrian pound, the Assad regime – with the help of Iran, Russia, and China – has begun conducting all of its business in rials, roubles, and renminbi. This decision supplements other existing arrangements between Syria and its allies that are keeping the Syrian economy on life-support. These include transfers of $500 million per month in oil and an unlimited credit line with Tehran for food and oil-product imports.

According to Kadri Jamil, Syria’s prime minister for the economy, this life support is necessary because Syria’s devastated economy is the target of an elaborate plot, hatched by the U.S. and Britain, to “sink the Syrian pound.”

So, what about the sinking pound? As the accompanying chart shows, the Syrian pound has lost 66.2% of its value in the last twelve months.

The rout of the Syrian pound has been widely reported in the press.  But, Syria’s inflation problems that have accompanied the collapse of the pound have gone largely unreported.  That’s because, beyond the occasional bits of anecdotal evidence, there has been nothing to report by way of reliable economic data.

To fill that void, I employ standard techniques to estimate Syrian’s current inflation. Currently, Syria is experiencing an annual inflation rate of 200% (see the accompanying chart).

Indeed, Syria is experiencing a monthly inflation rate of 34%. To facilitate the monitoring of the quickly deteriorating situation in Syria, I am creating a resource which will allow readers to view up-to-date data on the Syrian pound and the country’s inflation problems. Soon, black-market exchange-rate data and ­inflation estimates for countries with troubled currencies like Syria will be made available via the “Troubled Currencies Project” – a joint Cato Institute-Johns Hopkins collaboration under my direction. In consequence, the days of Syria’s plunging pound and raging inflation being covered in a shroud of secrecy are soon coming to an end.

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