Our So-Called Foreign Policy: The Main Threat to U.S. Alliances Sure isn’t Trump

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alliances, allies, America First, Angela Merkel, Belarus, Blob, China, David Brin, free-riding, Germany, globalism, natural gas, Nord Stream 2, Our So-Called Foreign Policy, Philippines, Russia, science fiction, South China Sea, Trump, Ukraine, Vladimir Putin

Here’s how widespread the charge is that President Trump has been destroying America’s longstanding foreign policy alliances – and for no good reason: I just saw it made on Facebook by David Brin. (I hope this link works.)

In case you’re not a science fiction fan like me, Brin is one of the truly great modern masters of this genre. A few years ago, I read his novel of the near future Kiln People, and was just blown away. And his achievements are hardly limited to literature, as this bio makes clear. In other words, he can’t be written off as some hysterically virtue-signaling, Never Trumper know-nothing celebrity. And even if he was, he has every right to express these or any other views. But clearly foreign policy isn’t his wheelhouse.

But here’s how deeply ignorant this comment is: It, and others like it from sources with more than a passing familiarity with U.S. foreign policy and world affairs, keep ignoring just how feckless the countries America’s allied with – and to whose defense the United States is pledged – have long been, and remain. For anyone who cares about The Facts, two major examples of their cynicism and unreliability have appeared in the last month alone.

The first came from the Philippines, whose president, Rodrigo Duterte, is no decent person’s ideal of a national leader. But his island archipelago country is located on the eastern edge of the South China Sea, which has turned into a major regional hotspot and theater of U.S.-China rivalry due to Beijing’s efforts over the last decade or so to assert more and more control over its economically and strategically important sea lanes. So as with decades of pre-Trump presidents and their relations with authoritarian allies, the current administration has overlooked Duterte’s domestic record for the sake of national security.

Duterte, however, hasn’t exactly reciprocated. As a foreign policy realist, I can’t blame him for trying to placate China (which is right in his neighborhood) while continuing to enjoy the protection of the United States (which is far away). But as an America Firster, my main concern is whether the United States has any reason to feel confident about counting on Duterte when the chips are down and shooting starts, and the Filipino leader’s fence-sitting clearly shows that the answer is “No.”

In fact, in February, Duterte went so far as to announce the ending of one of the deals in the web of official U.S.-Philippine defense ties that regulates exactly what American forces can and can’t do on Filipino territory. Because of the Philippines’ location, this so-called Visiting Forces Agreement inevitably impacts how effectively the U.S. military can operate to counter China – and defend the Philippines itself. But Duterte’s spokesman boasted that it was time that Filipino’s “rely on ourselves” and “strengthen our own defenses and not rely on any other country.”

Funny thing, though. In the six-and-a-half months since, Duterte’s confidence seems to have evaporated. Because late last week, his foreign secretary announced that if China attacks, “say a Filipino naval vessel … [that] means then I call up Washington DC.” So maybe there’s some merit to Trump’s insistence that these relationships be reexamined from head to toe?

But in case you think that double-dealing and hypocrisy is limited to “our bastard” types like Duterte…stop. For the second such instance comes courtesy of no less than Germany’s Angela Merkel, who has been anointed as the current champion of the global liberal order by much of the globalist U.S. foreign policy Blob and the Mainstream Media journalists who drink its Kool-Aid.

This lionizing of Merkel, however, is mocked mercilessly by Germany’s continued refusal to make serious military contributions to the defense of Europe, by its huge, global growth-killing trade surpluses, and by its rush to ban exports of crucial medical equipment as soon as the CCP Virus hit the continent.

But Merkel-worship seems to be just as devoted – and unjustified – as ever judging from this report in yesterday’s Financial Times. “Angela Merkel warns Vladimir Putin against intervention in Belarus,” the headline declared.

The article itself, however, made clear that nothing of the kind happened. The German Chancellor simply expressed the “hope” that the Russian leader wouldn’t send troops to quell pro-democracy protests that threaten to topple the longtime leader of this compliant Russian neighbor.

Just as worrisome, earlier this month, Germany reacted with indignation to U.S. attempts to punish and therefore give pause to an increasingly aggressive Russia by ending a pipeline deal that would bring natural gas directly from Russia to Germany.

This Nord Stream 2 project would greatly enrich Putin’s regime (and make more resources available to his military) – and at the expense of alternative gas supplier Ukraine, another Putin target. German companies, however, are heavily invested in the project. So Merkel has responded to suggestions that the country pull out of the deal to protest what looks like Putin’s latest attempt to assassinate a political rival by arguing that the two matters should be “decoupled” because linking an “economically driven project” to the alleged assassination wouldn’t be “appropriate.”

Again, I’m a realist, and won’t criticize these allied leaders for wanting their cake and eat it, too. Their job is to protect and advance their countries’ interests. So if they judge that accomplishing this mission requires fence-sitting and free-riding – and thereby increasing risks to the United States – (especially the risks of rushing to their defense and even of nuclear attack on the U.S.homeland) – they should go ahead,

But by the same token, an American chief executive’s job is protecting advancing and protecting U.S. interests. And the charge – whether by the Brins or the Blobbers of the world – that Mr. Trump is gratuitously endangering venerable relationships that unquestionably make America safer and stronger – belongs in the realms of science fiction and fantasy, not fact..

Our So-Called Foreign Policy: Did Obama Embolden Beijing in the South China Sea?

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Barack Obama, China, East Asia-Pacific, Jonathan W. Greenert, National Bureau of Asian Research, Our So-Called Foreign Policy, pivot to Asia, PLA Navy, South China Sea, The National Bureau of Asian Research, Trump, U.S. Navy, Wu Shengli

Here’s a shorty but a goody that I read about recently but haven’t been able to post on due to the rush of Kavanaugh-related news. And I can’t write about it tomorrow because both the new monthly U.S. jobs and trade figures come out. So without further ado here’s the gist: China’s aggressive efforts lately to expand its control over the South China Sea – whose waters and key shipping lanes the rest of the world consider to be international – may have been encouraged by the Obama administration’s feeble responses to its initial moves in the area.

Where’s the evidence? An August report written for the well-regarded National Bureau of Asian Research (NBR) by no less than a recently retired U.S. Chief of Naval Operations – the Navy’s senior-most officer – Jonathan W. Greenert.

Greenert never explicitly blamed the former President for coddling China in the region – which also boasts abundant energy resources. But he did write that at the start of the latest phase in China’s campaign to interfere with freedom of navigation in the South China Sea – turning a series of reefs and other geological features into small-scale but full-fledged islands that could host military facilities – other regional countries:

“perceived the United States’ slow and politicized response to Chinese activities as having been insufficient to address the challenge. Indeed, there is evidence that Chinese leaders were prepared for a more robust reaction from the United States and might have recalibrated their activities as a consequence. When there was no such response, the island-building campaign continued apace.”

And his evidence was first-hand:

“In my interactions as U.S. chief of naval operations with the PLA Navy commander, Admiral Wu Shengli, Admiral Wu made clear that he thought the United States would have a more forceful reaction when China began its island-building.”

Since Greenert served as CNO from 2011 to 2015, these interactions obviously took place during the Obama years.

As RealityChek readers should know, I favor a change in U.S. strategy in the East Asia-Pacific region that would feature a military pull-back (mainly because of the increasingly dangerous nuclear threats from China and North Korea), and a reliance instead on America’s economic power to defend and advance the United States’ essential interests in the region – which are economic. Here’s a recent, comprehensive statement of this position.

But of course, I’m not in charge of America’s Asia policy! And since President Obama stated his determination to keep U.S. Asia strategy on course – even announcing a “pivot” of American military forces and broader strategic focus to the region from the Middle East that turned out to be far more bark than bite – that strategy’s viability demanded that China’s adventurism meet a much stronger U.S. rebuff. Indeed, the results of the “talk loudly but carry a small stick” Obama strategy are becoming alarmingly clear – increasingly brazen challenges by China to the American position in East Asia that could easily trigger a conflict.

President Trump has (rightly) complained that Mr. Obama’s neglect of the North Korea nuclear threat wound up dumping that mounting crisis into his lap. Before too long, he may be making equally justified complaints about his predecessor’s record in the South China Sea.

Our So-Called Foreign Policy: The Establishment’s Hypocritical China Cassandras

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allies, cabinet, China, confirmation hearings, East Asia, island building, national security, Our So-Called Foreign Policy, Rex Tillerson, Secretary of State, South China Sea, tech transfer, Trade, Trump

Since Donald Trump’s cabinet choices appeared at their Senate confirmation hearings last week, critics have rightly observed that the president-elect and his picks to run his foreign and national security policies seem to disagree sharply on some major issues.

Less noticed is how the Trump nominees’ statements have revealed worse incoherence in the ranks of most critics – who sit overwhelmingly in the nation’s bipartisan foreign policy establishment. An unusually worrisome example has been the near-firestorm over Secretary of State-designate Rex Tillerson’s statement that “We’re going to have to send China a clear signal that, first, the island-building stops, and second, your access to those islands also is not going to be allowed.”

Tillerson’s remarks referred to an especially brazen aspect of Beijing’s expansionism in the South China Sea – centered on territorial claims that no one else in the region accepts. In an apparent effort to create irreversible realities “on the ground,” China has been capitalizing on the local topography literally to turn existing rocks and similar features into mini islands. Beijing has gone on to place various kinds of facilities – including some with military capabilities – on them, and to declare the immediately surrounding waters to be Chinese territory.

As widely noted, there’s at best considerable tension between Tillerson’s warning and several suggestions made by the president-elect during the campaign that he’s worried that America’s security relationships in the East Asia/Pacific region have become too dangerous militarily (since its adversaries are developing increasingly potent nuclear forces) and too one-sided economically (since the United States runs huge trade deficits with most regional countries).

Also completely weird, however, have been the alarm bells set off in establishment ranks to the effect that Tillerson had suddenly moved America dramatically closer to war with China over the South China Sea. For many of these voices have thoroughly upbraided Mr. Trump for failing to appreciate the crucial importance of U.S. alliances for safeguarding American and global security.

Establishment voice FOREIGN POLICY magazine ran a piece ominously asking, “Is Tillerson Ready to Go to War Over the South China Sea?” Only slightly less melodramatic was this Wall Street Journal sub-headline: “If carried out, Tillerson’s proposal to bar Beijing from some South China Sea islands would likely trigger military battle, experts say.”

A Christian Science Monitor headline sounded a similar alarm, and its article reported that “[T]he policy would dramatically reshape US thinking on Chinese expansionism, drawing a hard new territorial line in China’s backyard and, experts say, invite a military confrontation with Beijing.”

And even though they weren’t predicting imminent conflict, the experts interviewed by The Los Angeles Times still apparently fretted that Tillerson, “without diplomatic experience, had engaged in a flight of hyperbole in keeping with the tough rhetoric about China favored by Trump.”

These would all be defensible views except for one consideration: The American security strategy in the East Asia/Pacific region that all these experts have endorsed as a group for decades depends first and foremost on a credible threat to use military force to deter the kind of aggression in which China is engaged.

It is completely legitimate to question whether or not China’s island-building is the best casus belli, or circumstance for drawing a “red line.” But it is the height of hypocrisy to condemn – or even tut-tut over – a statement emphasizing that the United States has long considered maintaining freedom of the seas in East Asia to be a vital security interest (including by the Obama administration), and that China is on a course that will require U.S. military responses unless Beijing stops or changes direction sharply.

Or are all these American Asia experts confident that China will even slow its land and sea grab at some point down the road without firmer U.S. counter-moves than have been seen to date? If so, it’s time that they explained their reasons why – and how these rationales relate to their long-time insistence that major American military deployments in this region are essential to maintain peace and stability.

So the incoming administration looks to be a house divided on dealing with China’s strategic ambitions in Asia. That’s disturbing, but at least from the little known so far, the leading factions will be internally consistent (though the hawks still need to show that they understand the need to stop adding to China’s wealth and power through dangerously shortsighted trade and tech transfer policies, and Mr. Trump needs to understand more completely that even greater defense burden-sharing by the Asians could still leave America with unacceptable nuclear risks).

But the outside critics have just about disqualified themselves from any role in this debate – unless they can offer something more than hopelessly scattershot whining.

Our So-Called Foreign Policy: Asia Nuclear Dangers Remain a U.S. Policy Blind Spot

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alliances, allies, Asia, China, deterrence, extended deterrence, Japan, Matthew Kroenig, North Korea, nuclear weapons, Obama, Our So-Called Foreign Policy, public opinion, South China Sea, South Korea, Syria, The National Bureau of Asian Research

Eagle-eye RealityChek followers may have noticed the lack of a post Wednesday. Here’s my “note from home.” I spent much of the day doing something I hadn’t done for quite a while: attend a policy conference in downtown Washington, D.C.

I’ve been avoiding such events lately (unless I’m invited to speak) because usually I know ahead of time what all the participants are certain to say. (Yes, the policy scene in the nation’s capitol is indeed that stale, at least in the fields I know best.) So why waste time at such utterly predictable, formulaic exercises?

But last Wednesday’s event, sponsored by the private The National Bureau of Asian Research, was a little different. It dealt in large part with a subject I’ve posted on several times: the dramatic improvement in Chinese and North Korean nuclear weapons capabilities and what it could mean for American alliance strategy in the region and America’s own security. I wasn’t familiar with the speakers. And the foreign policy establishment has been pretty silent on this issue so far, so it was a chance to sample some representative views.

I’m glad to report that the presentations, especially by the lead speaker, Georgetown University political scientist Matthew Kroenig, helped me refine my thinking on these matters further. But they didn’t prompt any significant changes and, if anything, further convinced me that the nation’s foreign policy professionals still need a major wake-up call on how U.S. strategy in Asia is increasing the nation’s vulnerability to nuclear attack.

To review quickly: Since the end of World War II, the United States has promised to use nuclear weapons if necessary defend allies in Asia – specifically Japan and South Korea – from aggression. That strategy arguably made lots of sense when America possessed the world’s only nuclear weapons, and when, even after this monopoly was lost, it enjoyed a major nuclear edge over regional rivals. After all, Washington could not only hope to prevail in any conflict. It could reasonably hope to deter any such confrontation through the ability to threaten adversaries with nuclear destruction while keeping the American homeland completely safe.

Today, the strategic situation in Asia is substantially different. The United States retains substantial nuclear superiority over China and especially North Korea. But in addition to continuing to close the gap, as I’ve been reporting for years, both China and North Korea have made important strides towards developing what the specialists call secure retaliatory capabilities. That is, they’re developing forces that can be mobile enough, or easily enough hidden (mainly by putting them on submarines), to make sure that Beijing or Pyongyang can hit American targets with nuclear-tipped missiles as soon as Washington brings its own nuclear forces into play. As a result, U.S. leaders could (understandably) be deterred from intervening in Asian conflicts for fear literally of losing Los Angeles, or Denver, or….

At the conference, the presentations did deal with these developments, but they were unmistakably treated largely as abstract, long-range hypotheticals – not as concrete challenges bearing down on America very quickly. Just look at the event’s title: “Approaching Critical Mass: Asia’s Multipolar Nuclear Future.” Nothing in it about the United States. I tried to bring the discussion closer to earth by asking whether they thought that any American president would defend Asian allies knowing that the explosion of even a single nuclear warhead over a major U.S. city was a live possibility.

Georgetown’s Kroenig responded and made some strong points. First, he noted, American leaders have continued the policy of “extended deterrence” in Asia despite the Chinese and North Korean improvements, and the peace has been kept, meaning that Beijing and Pyongyang apparently remain deterred. Second, he pointed out, it’s not beyond America’s capacity to strengthen its own nuclear forces, and at least restore some of its diminished nuclear margin – even to the point of restoring high confidence of taking out rival nuclear forces in a preemptive strike.

Third, as Kroenig correctly observed, deterrence calculations are usually not black and white, either-or propositions. In America’s case, once it lost that monopoly on delivering nuclear weapons across oceans, it’s experienced some vulnerability to nuclear attack. As a result, the real challenge U.S. leaders face is continuing to convince potential enemies that nothing they could conceivably hope to gain from attacking American allies could approach what they could conceivably lose.

But if I’d had the chance to follow up aggressively (which is considered bad form at such events – another reason I’ve been passing them up), I would have made the following responses:

First, although both China and North Korea have so refrained from making dramatic military moves in Asia, that’s not to say that they’ve been deterred. After all, the North keeps conducting nuclear weapons tests. And with increasing boldness, the Chinese keep asserting territorial claims in the East and especially the South China Sea. Moreover, as I’ve reported, the Japanese and South Koreans seem less and less impressed with the credibility of America’s commitments, and seem increasingly eager to acquire nuclear weapons themselves.

Second, even if abundant resources suddenly became available, it’s far from certain that more and better U.S. nuclear forces will restore enough American superiority to offset Chinese and North Korean gains – much less be able to threaten their nuclear forces adequately. As I reported in May, a highly regarded defense consulting firm has recently contended that “the United States and its allies are already at a point where they cannot guarantee the complete removal of the threat of a North Korean nuclear attack.” And without “complete removal,” Pyongyang could still have Washington over a barrel.   

Third, precisely because of this risk, and precisely because Washington has never leveled with the American people about the (growing) dangers of its Asia strategy, there’s a real chance that U.S. leaders could find themselves in a showdown with Asian adversaries without the full support of the public. President Obama found out how painful that experience could be – and the kind of hit American credibility could suffer – when he backed down from his threat to destroy Syria’s chemical weapons.  Imagine the impact of an Asian nuclear crisis taking this turn.  

In fact, as I remarked to some fellow conference attendees as we were filing out, if Americans were fully aware of their leaders’ Asia intentions, they’d probably get angry enough to vote cast their presidential ballots for a rank political and policy amateur with an apparently hot-headed personality. I was only half-kidding.

Making News: Podcast of Last Night’s John Batchelor Show Appearance

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ASEAN, Asia, China, Gordon Chang, Making News, Obama, South China Sea, Southeast Asia, The John Batchelor Show

I’m pleased to present this link to the podcast of my appearance last night on John Batchelor’s nationally syndicated radio show.  Click it for a great debate between me and co-host Gordon Chang on whether President Obama’s summit this week with the leaders of ten Southeast Asian countries was a roaring success or a dismal failure.  The debate starts about halfway through this roughly 39-minute segment.

Following Up: How Intel May Wind Up Inside China’s Military

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China, cyber-security, Digitimes, Following Up, hacking, Intel, multinational corporations, national security, Obama, Office of Personnel Management, South China Sea, technology transfer, The New York Times, The Wall Street Journal

China keeps challenging American security interests, notably by staging damaging cyber attacks on key U.S. strategic and commercial targets, and by asserting territorial claims in Asian waters that could threaten global shipping and air traffic. And evidence keeps pouring in of U.S. technology companies showering China with valuable capital and defense-related know-how – and of a decided “What, me worry?” attitude taken by the Obama administration.

Last week, a post of mine summarized two recent New York Times articles reporting the beginnings of some concerns in the national security community about these dangerous corporate activities, along with a Wall Street Journal piece that summarized some especially troubling recent tie-ups involving entities part of or clearly controlled by the Chinese government.

This week, the Taiwanese publication Digitimes shed major new light on the American tech sector’s role in beefing up China’s capabilities in a piece focusing on Intel’s operations. According to Digitimes, by the end of this year, the world’s biggest semiconductor company will have committed nearly $1.80 billion to helping Chinese companies develop advanced new products and services. Just as alarming as the scale of this investment are some of the specific recipients.

Digitimes correspondents Monica Chen and Joseph Tsai report that the company now owns part of a Hong Kong company that makes unmanned aerial vehicles, and parts of firms in China proper involved in smart devices, robotics, cloud computing services, artificial intelligence, machine vision, three-dimensional modeling, virtual reality technologies, and advanced optics.

Every single one of these investments could easily find its way into Chinese weapons – which could easily wind up using them against the American military. But although tensions in the South China Sea may be rising, and the files of tens of millions of federal employees may have been hacked earlier this year, don’t tell any of Intel’s top executives or anyone making China policy for President Obama. For them, it’s clearly business as usual with Beijing.

Our So-Called Foreign Policy: How to Stop China’s Maritime Expansionism

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12-mile limit, allies, Asia, asymmetric warfare, China, cyber-security, cyber-war, export-led growth, forced technology transfer, free-riding, freedom of navigation, hacking, international law, multinational companies, Our So-Called Foreign Policy, South China Sea, territorial waters, Trade, trade barriers, U.S. Navy

It’s too early to say that President Obama’s decision to use the U.S. Navy to challenge China’s expansionism in the South China Sea shows he’s grown a backbone. But maybe a vertebra or two? At the same time, it’s clear that this story is far from ended, that there may be less than meets the eye to Beijing’s apparent acquiescence in the administration’s clear dissing of Chinese unilateral claims to East Asian waters, and that the United States needs to explore new types of responses if it wants to maintain its leading position in the Asia Pacific region.

To recap, in recent years, China has put muscle behind its long-stated insistence that many of the seas to its east and south, along with various tiny islands and island chains, are Chinese territory. As with similar longstanding claims made by other Asian countries ranging from Japan and South Korea to the Philippines and Vietnam, these positions aren’t recognized by international law.

For literally decades, all of these countries generally agreed to disagree (despite testing each others’ resolve from time to time).  Yet nearly two years ago, China began upping the ante by creating large physical presences on some of the (mainly uninhabited) islands in the South China Sea, and then by literally enlarging some of the smallest ones (which are so tiny that they literally sink below the waves on a regular basis), and creating new ones through various land reclamation techniques. (Other countries have made similar efforts, but they’ve been much smaller and far more sporadic.) China has also claimed exclusive air rights over many of the disputed regions.

In addition, China has unilaterally declared sovereignty over the waters surrounding all these locations out to 12 miles – the normal allowed by international law, but a standard that doesn’t always apply to the kinds of artificial creations produced by China. Moreover, Beijing went even further, stating that foreign naval vessels needed to notify Chinese authorities whenever they wanted to enter such waters.

This decision apparently convinced Washington that China’s actions unacceptably threatened freedom of navigation in the South China Sea. That’s a huge deal, since trillions of dollars worth of U.S. and other international commerce sail through these waters annually, and since they’re rich in natural resources as well. And incidentally, all other regional powers seem to agree.

So the president finally authorized an American guided missile destroyer to sail close enough to one of the disputed islets to violate Chinese claims – and without asking permission. The administration has also made clear that the kind of mission carried out by the U.S.S. Lassen would be repeated frequently. Even better would be participation by regional allies, whose historic specialty so far has been free-riding on American defense guarantees.  But except for Japan, they don’t seem to be even actively considering such assistance, and the United States bizarrely hasn’t even officially sought it.

China has protested strongly, but don’t dismiss it as a paper tiger just yet. Despite America’s continuing military edge in East Asia, Beijing is hardly devoid of options. For instance, China could create significant military presences on some of the islands. In addition, and more worrisome, according to a tweet from China-watcher Patrick Chovanec, Beijing could escalate its cyber-attacks on American businesses and government agencies.

The United States would be hard-pressed to respond in kind, as I’ve noted, because it lacks clear-cut (and perhaps any) cyber-war superiority, and because such hacking could be much more damaging to America’s more advanced economy and society than to China’s.  And in fact, capitalizing on such disparities would be fully consistent with the notion of waging “asymmetric war” developed by Chinese strategists. 

A much better means of retaliation would be economic. China’s economy, which depends heavily on exporting, and especially to the United States, is slowing. And that growth threatens Communist Party rule because it’s hold on power has for decades depended heavily on its success in boosting living standards throughout Chinese society.

Of course, erecting major barriers to Chinese imports would be condemned, especially by offshoring interests, as shortsighted and even dangerous protectionism that could plunge the two countries, and the larger world, into a “trade war.” But as always, such warnings ignore the long-term net damage inflicted on the U.S. economy – and especially its invaluable productive sectors – by the huge expansion of bilateral commerce since the early 1990s.

They also ignore the clear message being sent by the persistence of the American recovery (however inadequate) in the face of a weakening global economy, and by the reemergence once that recovery began of overall U.S. trade deficits (including of course with China) as major drags on American growth: The United States needs the rest of the world economy even less than ever, and certainly much less than trade-dependent countries like China need the United States.

Would wielding this kind of economic stick against China be cost-free for Americans? Of course not, especially in the short- and even medium-term, before supply chains got restructured. Yet tariffs and other curbs could always be phased in. Nor need they cover all Chinese products (although the more, the merrier). And other means of economic retaliation could be employed as well. How about cutting off all or at least some of the defense-related technology and capital that U.S. multinational companies are still recklessly transferring to China, either voluntarily or under threat of being shut out of the Chinese market?

More important, whatever the resulting costs, they look a lot less intimidating than those that could result from even a brief military conflict (which logically would trigger even greater and costlier economic adjustments), or from massive Chinese cyber-attacks. And don’t forget the flip side of passivity: An America that failed to use its biggest advantage over China for fear of experiencing any pain at all inevitably would be an America that flashed a big, fat green light to Beijing’s expansionists.

(What’s Left of) Our Economy: If Washington Was Serious About the China Economic Challenge….

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aerospace, allies, Boeing, China, Cisco, cyber-security, Edward Snowden, forced technology transfer, imports, investment, lobbying, manufacturing, multinational companies, national security, offsets, offshoring, South China Sea, subsidies, telecommunications, Trade, Xi JInPing, {What's Left of) Our Economy

However understandable, the intense administration and media focus during Chinese leader Xi Jinping’s U.S. visit on Beijing’s cyber-hacking has overshadowed several other major Chinese threats to American national security and economic well-being – and the need to fix U.S. strategies that are failing badly to cope with them. High on the list is China’s widespread practice of extorting corporate investment and technology transfer by threatening to shut uncooperative companies out of its large and potentially bigger market. And this blackmail deserves special attention this week because two big examples of it have made it into the news recently.

The first involves Boeing, which apparently will build its first foreign factory in China – a move that not so coincidentally coincided with China’s announcement that it would buy 300 Boeing jets. The second was Cisco Systems’ decision to start cooperating with a Chinese server company on projects that reportedly could include developing new telecommunications hardware products. This deal has followed several years in which Cisco has encountered big trouble in China due to fall-out from Edward Snowden’s techno-spying revelations and charges, and to Beijing’s policy of punishing American companies after Congress in effect froze China’s version of Cisco out of the U.S. market due to espionage concerns.

Since aerospace and telecommunications are clearly central to military strength, these American corporate cave-ins could easily endanger national security – unless you believe that they’ll forever remain in their current limited form. So more effective responses are urgently needed – unless Washington wants to face ever more harmful Chinese cyber-hacking (see this article of mine on how American firms have undoubtedly shared advanced cyber-war-related technologies with China), or ever better armed Chinese forces in possible future military showdowns in the South China Sea and other disputed Asian waters.

The companies themselves explain their agreement to China’s trade and investment conditions with the “half-a-loaf” argument, and it’s not completely unreasonable. They’re obviously not thrilled to be helping create likely new competitors (whether they care about American security is another matter entirely), but they point out that any China business they preserve or gain via their cooperation is more than they’d have without the China market. In fact, Beijing has used its leverage to string them along effectively enough that they’re reluctant even to complain about their China troubles to Washington – for fear of becoming targets for Chinese retaliation, and of excessively rocking the boat of bilateral economic relations generally.

But although the companies’ behavior may be justifiable from their own individual standpoints, their unavoidably narrow, self-interested perspectives make clear why they can’t be relied to protect or advance broader U.S. interests. Washington needs to take the lead. But can it do so without imposing heavy costs on these firms? To me, the answer clearly is “Yes” – and not just because China’s economy is slowing down. The key to success is understanding that a case-by-case approach inevitably leaves China in the driver’s seat, and that the United States can and should capitalize on position as an export market desperately needed by China to ensure adequate growth.

Severely restricting China’s access to this American market would grab Beijing’s attention not only for economic reasons. Chinese leaders would begin worrying about their political futures – and their own personal well-being – since their hold on power depends so strongly on delivering jobs and rising incomes to the country’s increasingly restive population. Moreover, even keeping in mind that short-term costs for the U.S. economy are inevitable – because policy shifts of this magnitude are always disruptive, and because it may take Beijing a while to get the message – the most obvious objections are surprisingly easy to dismiss.

Where will affected companies find customers to replace those they may temporarily lose in China? In many cases, in the American market, because the smaller U.S. trade deficit with China that would result from import curbs would spur more American growth overall. Moreover, so much U.S.-China trade nowadays is “head-to-head,” (in which the same goods compete with each other), that many American firms could fill the gap left by missing Chinese imports. And when it comes to U.S. companies that can’t make up China losses this way, government compensation seems appropriate.

Given Washington’s willingness to bail out Wall Street and auto-makers for blunders largely of their own making, subsidies look defensible for firms in the line of fire of whatever trade conflict develops. (One possible caveat: Many larger, multinational companies rely on China business heavily because they lobbied so effectively for the U.S. China trade policies that have created their vulnerabilities – and other major damage to the American economy – in the first place. So there’s also a case for letting them take their lumps, at least to some extent.)

If such subsidies don’t pass muster politically in the United States, another alternative is available to Washington: using the power of the American market to dissuade non-Chinese competitors to U.S. firms from seizing the opportunities created by these new American policies to boost their own China sales. Although the American firms’ China sales would remain lost, they at least wouldn’t lose competitve ground to foreign rivals.

Further, giving these third-party companies and countries the choice of doing business with China, or with the far bigger – and more reliable – United States would have the added benefit of adding international support to American efforts to fight Chinese protectionism and economic predation.  Working with Washington would also aid foreign governments and companies by reducing China’s scope to play trade partners off against one another. 

Finally, it’s true that the kind of jobs and even technology extortion used by China are standard operating procedures – especially in aerospace and in military aerospace – for many foreign governments, including those of U.S. allies. So how could Washington justify singling out China for counter-measures? Yet when it comes to allies and their policies (called offsets), the answer couldn’t be more evident: They’re allies and China manifestly is not. It makes no sense whatever to treat all foreign governments and economies the same when their relationships with the United States are so dramatically different, and this kind of foolish consistency certainly shouldn’t hamstring America’s approach to China’s economic transgressions.

There is, however, one obstacle to this kind of revamp of U.S.-China economic relations that I don’t see being overcome anytime soon – the continued domination of China policy-making in Washington by those aforementioned multinational, offshoring-happy business interests. The China policy status quo has undermined the American economy’s productive core, and increasingly threatens national security. But the offshoring lobby believes it’s worked well enough for its members. So until a critical mass of national political leaders decides to reject their lavish campaign contributions, expect China to keep taking America to the cleaners. And when Chinese actions sting enough, expect a few grumbles from the multinationals – no doubt mainly for show.

Im-Politic: Walker and Rubio Continue Republican China Pseudo-Hawk Tradition

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2016 elections, Asia, Asia-Pacific, China, cyber-war, defense spending, Im-Politic, Marco Rubio, Obama, offshoring, offshoring lobby, RealClearPolitics.com, Republicans, Scott Walker, South China Sea, technology transfer, The Wall Street Journal, TPP, Trade, Trans-Pacific Partnership

Two of the Republican party’s establishment presidential candidates have now spoken out in detail about America’s China policy; if timing is everything, they’d deserve A’s, given how Beijing’s erratic recent economic moves lie behind so much of this week’s tumult in world financial markets. Sadly, everything else about these statements simply repeats what’s become boilerplate for the Republican mainstream, and especially its Washington, D.C.-based Congressional leadership: (a) ringing calls to stand up more forcefully to increasingly aggressive Chinese behavior in East Asia and on the cyber-hacking front; and (b) thinly disguised excuses for coddling the ongoing predatory economic policies that have immensely strengthened China both economically and militarily.

Wisconsin Governor Scott Walker at least has an excuse. He has no significant foreign policy or international business experience other than hitting up Beijing for Chinese investments for his state and markets for its products and services (which, to be fair, is Standard Operating Procedure for governors).

Not surprisingly, he’s parroting the Boehner-McConnell – and, ironically, Obama – line that responding to China-related challenges (and opportunities) in Asia requires first and foremost approving the Trans- Pacific Partnership (TPP) trade deal.

At least in an article today on the RealClearPolitics.com website, Walker intriguingly left himself some Clinton-ian wiggle room on trade, calling for a TPP “that puts American workers first and levels the playing field. A deal that genuinely opens markets and ensures high standards for an area covering almost 40 percent of the world’s GDP….” In other words, he’s (reasonably) reserved himself the option of rejecting a final agreement if campaign considerations so dictate by claiming that it’s failed these litmus tests.

Nonetheless, Walker’s equation of concluding the TPP on the one hand, and restoring American “leadership” in Asia on the other – a staple of pro-TPP rhetoric – signals that he won’t be a terribly hard sell. Meanwhile, his reference to “high standards” suggests that he buys the bogus contention that the TPP can ensure that the Chinese and other Asians will wind up structuring their economies, and regional trade and commerce, along U.S.-style lines – even though even American allies in the region keep emphatically rejecting these norms.

More fundamentally, just like Washington’s Republican China pseudo-hawks, Walker would beef up America’s military response to Beijing’s regional muscle-flexing while apparently leaving intact its access to the global resources and technology that powers it. Thus, Walker would “rebuild our military strength in Asia. Defense sequestration must end, and our defense budget must return, at a minimum, to the level [at which] we can once again field a military that is fully equipped to keep the peace. We also need a vigorous shipbuilding program that puts Americans to work in service of our safety.” And he’d reinvigorate regional defense alliances that President Obama has allegedly permitted to decay.

But would Walker stand up to the mercantilism that has paid for so much of China’s military power, including cyberhacking capabilities that have resulted in “brazen attacks against the United States”? Not exactly. Walker declares that “we cannot allow [China], or any other nation, a free pass on unfair trade practices and the theft of our intellectual property.” But all he’ll say about his approach to these transgressions is “These are not insurmountable issues, and the more we can work together through difficult issues, the more people from both countries will benefit.”

But at least his article said something about the subject – as opposed to its treatment of corporate technology transfers. These practices, which have given China such formidable defense-related knowhow, were completely ignored.

Florida Senator Marco Rubio has no Walker-like excuses, but his Wall Street Journal op-ed today duplicates the shortcomings of Walker’s strategy almost to a tee. It’s true that, although Rubio actually voted for the TPP in the Senate, he doesn’t regurgitate the blather about the deal demonstrating America’s strategic commitment to and credibility in East Asia. In this piece, he portrays the agreement’s main benefits as economic, embodying “firmer insistence on free markets and free trade.”

But like Walker, Rubio would restore “America’s strategic advantage in the Pacific” with higher defense spending that would “allow us to neutralize China’s rapidly growing capabilities in every strategic realm, including air, sea, ground, cyber space and even outer space.” Also like Walker, Rubio would reinforce America’s ties with its Asia-Pacific allies.

Yet although Rubio promises that “if China continues to use military force to advance its illegitimate territorial claims…I will not hesitate to take action,” and even notes that Beijing’s military spending has been surging for years, like Walker, he says nothing serious about crimping China’s revenue and technology streams. On the one hand, Rubio accuses China of numerous major violations of global trade and economic standards. On the other, he would respond “not through aggressive retaliation, which would hurt the U.S. as much as China, but by greater commitment and firmer insistence on free markets and free trade” – i.e., the TPP. Apparently, despite his experience on the Senate Foreign Relations Committee, Rubio has yet to learn that export-dependent China has much more to fear from trade conflict than the still-largely self-sufficient United States.

For decades, America’s China policy has been sabotaged by leaders more dedicated to fronting for corporate offshoring interests and their profits-first approach to Beijing rather than promoting national interests. Their combination of military bluster and economic pablum makes clear that Walker and Rubio are offering more of the same.

Im-Politic: How Carly Fiorina Helped Feed the China Beast

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Asia, Carly Fiorina, China, Hewlett-Packard, Im-Politic, South China Sea, technology, technology transfer

Although I doubt that Carly Fiorina has as much of a chance of winning the Republican presidential nomination as even Donald Trump, her remarks today on America’s China policy deserve attention. For she unwittingly highlighted – in unwittingly personal terms – one of the biggest blind spots in America’s approach to the PRC: its long-time “see no evil” record on utterly reckless and apparently voluntary corporate transfers of defense-related technologies to China.

As I’ve repeatedly written, the United States will never satisfactorily deal with Beijing’s growing military might, its determination to become East Asia’s kingpin, or its cyber-hacking, as long as it continues permitting U.S.-owned companies to set up research labs in China, share much of their best knowhow with Chinese partners (all of which are controlled one way or another by the Chinese government), and train legions of Chinese scientists and technicians. And it’s a lesson that Fiorina evidently needs to learn, too.

In an interview with “Meet the Press” host Chuck Todd today, Fiorina made what’s by now an increasingly standard Republican and conservative call for a tougher policy towards these Chinese provocations. Specifically, the former Hewlett-Packard CEO stated “We ought to make it very painful for the Chinese to be aggressive in cyber-warfare.” She added that she would “begin to provide our allies in the South China Sea with some of the technology they’ve asked for. Be very aggressive about insuring that China does not control the South China trade route.”

But what Fiorina didn’t mention, and what Todd apparently didn’t know about, was HP’s own record of feeding this beast while she ran that tech giant. According to Hewlett-Packard itself, under Fiorina’s leadership (mid-1999 to early 2005) alone:

“In 2002, HP instituted the Software Solutions Center in Shanghai, which is dedicated to developing enterprise-class solutions for customers in China and throughout Asia Pacific.

“In 2004, also in Shanghai, HP established the Industry Innovation Center with Intel to showcase technology and business solutions for the finance, manufacturing, public sector and telecommunications industries.

“HP Labs China was established in 2005 to collaborate with public and private sectors to research and develop future information management systems.”

And a year later, the company “developed the HP IT R&D Center in Shanghai,” which presumably was planned during Fiorina’s tenure.

HP is hardly the only American company that has bolstered China’s innovation capabilities, or even the worst offender. But it clearly has been part of the problem. Here’s hoping that reporters – and voters – start asking Fiorina whether she’s going to pursue a genuinely comprehensive, strategic China policy, or whether she’s just another pseudo-hawk.