Tag: China

Will China Accept Taiwan’s Political Revolution?

In one of the least surprising election results in Taiwanese history, Tsai Ing-wen has won the presidency in a landslide. Even more dramatically, the Democratic Progressive Party will take control of the legislature for the first time. Tsai’s victory is a devastating judgment on the presidency of Ma Ying-jeou.

With the imminent triumph of the Chinese Communist Party, Chiang Kai-shek moved his government to the island in 1949. For a quarter century Washington backed Chiang. Finally, Richard Nixon opened a dialogue with the mainland and Jimmy Carter switched official recognition to Beijing. Nevertheless, the U.S. maintained semi-official ties with Taiwan.

As China began to reform economically it also developed a commercial relationship with Taipei. While the ruling Kuomintang agrees with the mainland that there is but one China, the DPP remains formally committed to independence.

Beijing realizes that Tsai’s victory is not just a rejection of Ma but of China. Support even for economic cooperation has dropped significantly over the last decade.

Thus, China’s strategy toward Taiwan is in ruins. In desperation in November Chinese President Xi Jinping met Ma in Singapore, the first summit between the two Chinese leaders. Beijing may have hoped to promote the KMT campaign or set a model for the incoming DPP to follow.

Xi warned that backing away from the 1992 consensus of one China could cause cross-strait relations to “encounter surging waves, or even completely capsize.” While Tsai apparently plans no formal move toward independence, she also rejects the 1992 consensus of “one China, separate interpretations.”

As I point out in Forbes: “Washington is in a difficult position. The U.S. has a historic commitment to Taiwan, whose people have built a liberal society. Yet America has much at stake with its relationship with the PRC. Everyone would lose from a battle over what Beijing views as a ‘renegade province’.”

Washington should congratulate President-elect Tsai, but counsel Taipei to step carefully. Taiwan’s new government shouldn’t give the PRC any reason (or excuse) to react forcefully.

The U.S. should accelerate efforts to expand economic ties with Taiwan. Doing so would affirm America’s commitment to a free (if not exactly independent) Taiwan by other than military means.

America should continue to provide Taipei with weapons to enable it to deter if not defeat the PRC. At the same time, the new government should make good on the DPP’s pledge to make “large investments” in the military. It makes little sense for the U.S. to anger Beijing with new arms sales if Taipei is unwilling to spend enough to make a difference.

Washington should press friendly states throughout Asia, Europe, and elsewhere to communicate a consistent message to China: military action against Taiwan would trigger a costly reaction around the world. The mainland would pay a particularly high economic and political price in East Asia, where any remaining illusions of a “peaceful rise” would be laid to rest.

Finally, American officials should explore ideas for a peaceful modus vivendi. One possibility is for Washington to repeat its acceptance of “one China” and eschew any military commitment to Taiwan.

Taipei would accept its ambiguous national status and announce its neutrality in any conflicts which might arise in East Asia, including involving America and Japan. The PRC would forswear military means to resolve Taiwan’s status and reduce the number of missiles in Fujian targeting the island.

The objective would be to make it easier for both China and Taiwan to “kick the can down the road.” A final resolution of their relationship would be put off well into the future.

 The ROC’s people have modeled democracy with Chinese characteristics. Hopefully someday the PRC’s people will be able to do the same.

In the meantime, President-elect Tsai is set to govern a nation which has decisively voted for change. However, if the PRC’s leaders fear they are about to “lose” the island—and perhaps even power at home—they may feel forced to act decisively and coercively. International ambiguity remains a small price to pay to avoid a cross-strait war.

Reduce Expectations and Withdraw Troops in Dealing with North Korea

Kim Jong-un’s gift to the world is North Korea’s fourth nuclear test. Washington should respond by backing away from a potential conflict that is not its own.

Although Western intelligence widely disbelieves the DPRK’s claim to have tested a thermonuclear device, or H-bomb, Kim Jong-un has clearly demonstrated that nothing will dissuade the regime from expanding and improving its nuclear arsenal.

The North’s action has led to widespread demands for action. Alas, no one has good ideas about what to do.

Pyongyang again ignored “the international community” because “the international community” has no cost-effective means to restrain the DPRK. Although as assistant secretary of defense Ashton Carter advocated military strikes against North Korean nuclear facilities, most people on and off the Korean peninsula don’t believe the answer to a potential war is to start an almost certain war.

Sanctions long have been the West’s go-to answer. Congress already was considering three different enhanced sanctions bills and the UN Security Council is planning new economic penalties.

But the North has never let public hardship get in the way of its political objectives. So far the People’s Republic of China has refused to encourage regime collapse by cutting economic ties and eliminating energy and food support. Moreover, Russia, with a newly revived relationship with the DPRK, insisted that any response be “appropriate” and “proportionate.”

Whether there ever was a chance to negotiate away the North’s nascent nuclear program may be impossible to know. But virtually no one believes the Kim regime is willing to eliminate existing weapons developed at high cost.

So what to do?

  1. Recognize that not every problem is America’s problem. North Korea matters a lot more to its neighbors than to the U.S. Indeed, Pyongyang wouldn’t be constantly tossing imprecations and threats toward Washington, if the U.S. didn’t have troops on its border and abundant air and naval forces pointed the DPRK’s way.
  2. Withdraw American conventional forces from the peninsula. The Republic of Korea, with twice the population and upwards of 40 times the economic strength, of the North, is well able to provide for its own defense. U.S. troops act as nuclear hostages, unnecessarily put in harm’s way without constraining North Korean nuclear activities.
  3. Seek to persuade Beijing to pressure the North out of the former’s own interest. Washington’s only chance of enlisting China’s help is by addressing its concerns—impact of potentially violent implosion spurring conflict and refugees across the Yalu, loss of economically advantageous position in the North, creation of united Korea allied with America aiding Washington efforts at containment. This requires negotiating with the PRC.
  4. Offer to establish diplomatic relations with North Korea. Engagement might not change anything, but then, we can be certain that nothing will change if we maintain the same policy toward the North.
  5. Indicate that continuing expansion of Pyongyang’s nuclear arsenal would force Washington to reconsider its position on proliferation. After all, the U.S. does not want to be left extending a nuclear umbrella over South Korea, Japan, Taiwan, Australia, and who knows else against nuclear-armed North Korea, China, and Russia. Better to extricate America from such a miasma and allow its allies to create their own nuclear deterrents. If that prospect bothers the PRC, then it should do more to prevent the DPRK from continuing its present course.

North Korea has become a seemingly insoluble problem for Washington. Nothing the U.S. can do, at least at reasonable cost, is likely to create a democratic, friendly, non-nuclear DPRK.

But as I point out on National Interest: “Washington can share the nightmare, turning South Korea’s defense over to Seoul and nuclear proliferation over to the North’s neighbors, particularly China. Moreover, Washington can diminish North Korean fear and hostility by establishing diplomatic ties, just as America had official relations with the Soviet Union and its Eastern European allies during the Cold War.”

The geopolitics still would be messy. But no longer would it be America’s responsibility to clean up.

China Has Chosen Instability

The plunging Shanghai Stock Exchange and the sudden reversal in the yuan’s appreciation have caused fears to spread beyond China’s borders. Is something wrong with the world’s growth locomotive? In a word, yes.

Indeed, China’s leadership has chosen instability. They have forgotten my golden rule: stability might not be everything, but everything is nothing without stability.

How did China arrive at this point — a point of high uncertainty and potential economic instability? A look at China’s exchange-rate regimes provides a window into these troubled waters. Since China embraced Deng Xiaoping’s reforms on 22 December 1978, China has experimented with different exchange-rate regimes. Until 1994, the yuan was in an ever-depreciating phase against the U.S. dollar. Relative volatile readings for China’s GDP growth and inflation rate were encountered during this phase.

After the maxi yuan depreciation of 1994 and until 2005, exchange-rate fixity was the order of the day, with little movement in the CNY/USD rate. In consequence, the volatility of China’s GDP and inflation rate declined, and with the yuan firmly anchored to the U.S. dollar, China’s inflation rates began to shadow those in America (see the accompanying exchange-rate table). Then, China entered a gradual yuan appreciation phase (when the CNY/ USD rate declined in the 2005-14 period). In 2015, the yuan began to experience weakness. In terms of volatility, economic growth and inflation rates, China’s performance has deteriorated ever since it dropped exchange-rate fixity.


So, why did China drop exchange-rate fixity in 2005? After all, China’s fixed-rate regime had performed very well. Pressure from the U.S. and many nonsensical mercantilist’s arguments, emanating from Washington, D.C., caused China to abandon fixity. Little did Beijing realize that it had chosen instability.

North Korea’s Nuclear Challenge to the West and China

North Korea has grabbed international headlines. Again. Pyongyang staged its 4th nuclear test, supposedly a thermonuclear device.

Proposals for more sanctions and further isolation likely will grow. However, the test dramatically demonstrated that the U.S. attempt to build a cordon sanitaire around the Democratic People’s Republic of Korea has failed.

Washington instead should develop a new policy focused on engagement, not denuclearization. The latter should remain an objective, but even if it remains out of reach the U.S. might be able to reduce military threats on the peninsula.

As always, North Korean foreign policy reflects domestic politics. The test also gives Pyongyang greater leverage in its attempt to engage both South Korea and the U.S.

Talks with the Republic of Korea recently ended without result. The North also long has sought to draw the U.S. into bilateral discussions. However, the Obama administration set as a precondition for any talks that Pyongyang take steps toward dismantling its nuclear program, a non-starter.

In dealing with the North there are only second-best options which might ameliorate the threat otherwise posed by a famously enigmatic, persistently paranoid, and potentially unstable nuclear-armed state viewing itself in a perpetual state of war with America and its allies, South Korea and Japan.

Winning in Africa Might Not Be Worth the Cost to China

Nowhere is China’s growing reach more obvious than in Africa. President Xi Jinping just returned from a trip during which he promised African officials $60 billion in new investment. Beijing also has grown more active culturally, educationally, and even militarily.

The PRC’s increasing role has created unease in Washington. But China has run into many of the same sort of problems which faced America in the past.

The U.S. obviously fears losing business: African trade with China surpassed that with America in 2009. Beijing undermines Western pressure to improve democracy and human rights.

Yet the ultimate results of President Xi’s visit remain to be seen. The photo ops were impressive, but both the pictures and promises may fade over time.

Did Top North Korean Official Die by Accident or Assassination?

Yet another top North Korean official has met a violent and untimely death. No one knows if it was a tragic accident or political assassination.

Kim Yang-gon was in charge of negotiations with South, where he was respected. He supposedly died in an early morning car accident. A surprising number of North Korea’s high officials appear to leave the world this way; yet defectors say accidents are common given the poor streets and tendency of top officials to drive drunk.

Still, it looks suspicious. But it doesn’t appear to be a state-sanctioned hit. Dictator Kim Jong-un praised his “close comrade-at-arms” and showed emotion at the state funeral. 

Perhaps a rival took out Kim Yang-gon. However, while he was well-connected, having served “Dear Leader” Kim Jong-il too, it’s not apparent that he is the sort of rival worth killing.

Which leaves everyone outside again looking through the mirror darkly, as the Bible puts it.

The Korean status quo obviously is unsatisfactory. Indeed, it is positively dangerous. While everyone discounts North Korea’s endless threats against both South Korea and the U.S., as the North’s military capabilities grow people are more likely to treat them as warnings to be taken seriously. Proposals for military action against the Democratic People’s Republic of Korea might enjoy a revival.

Of course, the more dangerous Pyongyang perceives the international environment, the more committed it likely will become to building a sizeable nuclear arsenal and missile force. And to the extent that the North can argue that it is responding defensively to America, the less likely Beijing will be to apply more pressure on the DPRK.

An intrepid few have forthrightly proposed military action. But that would be a wild gamble, risking thousands of lives, mostly Korean, on both sides.

Enhanced sanctions look pretty good compared to war. And tighter financial controls would make it much harder for the Kim regime to do business with the world. However, Sudan gets by despite strict financial controls.

Moreover, without Beijing’s acquiescence, the U.S. won’t be able to cut the North’s lifeline. Forcing a national implosion would have unpredictable and potentially violent consequences.

For some the People’s Republic of China is the preferred option. Just get the PRC to force the North into line. That presumes Beijing has the ability to do so.

Moreover, the PRC has good reason to choose the status quo over creating the possibility of chaos and war on China’s southern border. Moreover, Beijing is unlikely to do any favors for the U.S., which would use a united Korea as part of a containment strategy against China.

If none of these, then what?

Some form of engagement with the objectives of moderating regime behavior, easing the threat environment, constraining arms development, encouraging domestic reform, and improving human development. Not because the chances of success seem great, but because there is no better option.

That means the South should continue talks despite Kim Yang-gon’s death. In fact, in his New Year’s Day address, Kim Jong-un expressed his desire to improve bilateral relations.

And as I argue on National Interest online: “the U.S. should open a dialogue, with the objective of initiating official though low-key relations. A diplomatic presence in Pyongyang would provide a small keyhole for peering into this mysterious country. Although expectations should be low, tempering hostilities could lead to additional benefits, especially if Kim Jong-un uses next year’s party congress to modernize.”

Winston Churchill once said of the Soviet Union that it was “a riddle wrapped in a mystery inside an enigma.” That certainly describes the DPRK for the West. Kim Yang-gon’s death only makes the puzzle more complex. Increasing contact with Pyongyang is the best way to begin to understand the North and influence its future.

Is Reconciliation for Japan and South Korea a Warning for China?

History weighs heavily on East Asia. To Washington’s enduring frustration, its two most important democratic allies, Japan and the Republic of Korea, have been at odds for decades.

The divergence between the two grew especially sharp over the last couple of years, during which ties between Seoul and the People’s Republic of China notably warmed while those between Japan and the PRC sharply deteriorated, driven by the dispute over the Senkaku/Diaoyu Islands. Moreover, South Korea had its own contentious territorial contretemps with Tokyo.

Both parties deserved blame. The South was determined to hang onto emotional grievances—serious and real, but long past. Japan insisted on justifying indefensible actions whose perpetrators were long dead. Destructive domestic politics ruled.

At the end of December, however, the two countries tried to put the issue of the “comfort women” behind them. Beginning in 1931, with Japanese military operations in China, Tokyo created brothels for its soldiers. For years Japanese officials insisted that the women were prostitute voluntarily engaged, despite evident coercion.

Now Japan has apologized and agreed to create a compensation fund. In return, the ROK promised to drop the matter and “address” the issue of the private statue of a young girl, representing the comfort women, facing the Japanese embassy in Seoul.