Our So-Called Foreign Policy: America Caves at the China Dialogue

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China, currency manipulation, Obama, Our So-Called Foreign Policy, pivot, Strategic and Economic Dialogue, Trade, yuan

The latest U.S.-China Strategic & Economic Dialogue ended today, and both sides are acting as pleased as punch. I can see why Chinese Vice Premier Wang Yang pronounced this session of the biannual high level talks as a “complete success.” Why the U.S. delegation agreed is beyond me, if you believe that Washington’s main purpose is to advance and protect critical American interests.

On the strategic side, the Americans insist that they’ve responded to China’s more aggressive assertion of territorial claims by reminding Beijing that the U.S. defense commitment to allies threatened by this muscle-flexing remains “deep.” But those allies will be forgiven for doubting American will because in his official closing statement to the press, Secretary of State John Kerry barely even glossed over the issue.

Even more important, these Obama administration officials gave no indication of any determination to change 20 years of U.S. trade and investment policies that (a) have given China so much of the financial wherewithal needed to launch a worrisome military buildup and (b) ensured that so much of China’s new weaponry would be so high tech. For good measure, years of reckless American corporate technology transfers unmistakably have helped create the Chinese cyberhacking capabilities that have attacked U.S. business, government, and even military computer systems. Which means that Obama policy will keep enriching and arming the very power against which it’s ostensibly pivoting.

On the economic side as such, Treasury Secretary Jack Lew disgracefully hailed as a “big change” some Chinese statements about scaling back their currency manipulation operations as conditions permit, even though close observers were quick to point out that this phrasing simply repeated current Chinese policy. That is, Beijing can now feel even freer to keep the yuan artificially undervalued as long as it views boosting exports as crucial to maintaining an acceptable pace of growth. With China now showing signs of backtracking from previously announced GDP targets, it’s clear that underselling its American and other competition for reasons having nothing to do with market forces will be necessary in Chinese eyes for many more months at least.

Moreover, even though China’s reputation as the world’s most corrupt major economy looks more richly deserved by the day, the United States renewed its determination to conclude a bilateral investment treaty with Beijing. The result can only be to expand this kleptocratic system’s economic footprint in America. Like the nation doesn’t have enough homegrown crony capitalism?

In fact, the U.S. cave-in was so complete that it’s easy to conclude that, from Washington’s standpoint, the Dialogue’s main purpose is not to advance or protect American interests. It’s to pull the wool over the American public’s eyes. And judging by the continued apathy from – and often outright enabling by – that public’s representatives in Congress, it keeps succeeding.

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Our So-Called Foreign Policy: Why America’s China Strategy Would Have Dismayed the Founders

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China, Kerry. Asia, Obama, Our So-Called Foreign Policy, pivot, Strategic and Economic Dialogue, Trade

Although it’s been tough to access real-time coverage of the high level talks between the United States and China currently underway in Beijing, the opening remarks by American Secretary of State John Kerry and his Treasury counterpart, Jack Lew, make abundantly clear one prime reason that Washington keeps failing to promote or defend essential U.S. interests affected by China.

In my article yesterday for Fortune, I explained why the fundamental China strategy carried out by Washington since the 1970s is becoming dangerously out of date. The Kerry and Lew remarks, however, both perpetuate a specific, longstanding American myth about its approach to China and to diplomacy in general that’s a proven recipe for unnecessary foreign policy troubles.

The myth places maintaining relationships at or nearly at the center of U.S. foreign policy. Not that American diplomatic boilerplate never emphasizes the importance of shared specific interests among countries and building on them. It does. But it also so frequently stresses the importance of ongoing contacts, and the forms and processes that comprise them, that it often veers into mistakenly assuming that the mere declared existence of relationships per se creates the sense of mutual obligation that potentially represents their real value. As a result, the focus on relationships can obscure the paramount imperative of achieving vital specific U.S. objectives no matter their effect on a given relationship – and can result in their neglect.

Thus Kerry’s reference to a letter sent by President Obama to the two delegations urging them “to demonstrate to the world that even in a relationship as complex as ours we remain determined to ensure that cooperation defines the overall relationship.” At least as worrisome: Kerry’s attempts to reassure China of Washington’s benign intentions with his plea that Beijing recognize “[W]e may differ on one issue or another. But when we make that difference, do not interpret it as an overall strategy. It is a difference of a particular choice. And we need to be able to continue to put the importance of this relationship, the world’s two largest economies, we need to be able to understand the importance that we will play in choices for countries all across this planet.” Perhaps most disturbing of all was Kerry’s view that Sino-American differences must continue to be “constructively managed” (a phrase also used by Lew).

No one is urging the United States to respond coercively whenever it disagrees with allies or others, or to resort to coercion quickly or by a certain preset time. Instead, the challenge is making sure that “constructive management” doesn’t turn into excuse-making or enabling for the sake of broader benefits that may be wholly imaginary. Both current U.S. security and economic policies toward China indicate that this challenge has gone unmet.

For example, the temptation to maintain the relationship no matter the cost seems to be at least one major factor behind Washington’s failure to respond vigorously to China’s predatory trade practices – which have been conducted literally for decades to America’s economic detriment, and which have arguably worsened. America’s relatively timid reactions to China’s renewed belligerence in the South and East China Seas also appear to reflect U.S. leaders’ inability to sense when a supposed partner’s actions justify the diplomatic equivalent of divorce or even separation. It’s awfully difficult, moreover, to see how this relationship-based approach to China has resulted in payoffs America could not have reaped with a less touchy-feely strategy.

Successful diplomacy undoubtedly entails some degree of psychoanalysis, and can be aided by policymakers’ people skills and knack for reading counterparts. But national governments are not individuals. Indeed, since George Washington’s Farewell Address, American foreign policy realists have been warning their countrymen not entangle themselves in permanent foreign alliances (read “relationships”) and to avoid looking for “disinterested favors” from other nations – because their motivations are predominantly self-interested, and because they’ll therefore never be enduringly grateful. It was great advice for an age of imperialistic European monarchs and “Little Corporals” and it’s equally appropriate for dealing with 21st century Chinese revanchists.

In the News: My New Fortune Article on America’s Failing China Strategy

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Asia, China, In the News, pivot, Strategic and Economic Dialogue, Trade

Tomorrow, a high level U.S. delegation will sit down with Chinese counterparts in Beijing for the latest installment of a biannual “Strategic and Economic Dialogue.” That’s why I’m especially pleased that Fortune magazine just published a new column of mine explaining why the China grand strategy pursued by Washington since the 1970s is showing signs of dangerous obsolescence.