Our So-Called Foreign Policy: Why Biden’s China Tariff Cutting Talk is So (Spectacularly) Ill-Timed

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Biden administration, CCP Virus, China, coronavirus, COVID 19, currency, currency manipulation, exports, Our So-Called Foreign Policy, tariffs, Trade, Trump administration, unemployment, Xi JInPing, yuan, Zero Covid

If the old adage is right and “timing is everything,” or even if it’s simply really important, then it’s clear from recent news out of China that the Biden administration’s public flirtation with cutting tariffs on U.S. imports from the People’s Republic is terribly timed.

The tariff-cutting hints have two sources. First, and worst, as I noted two weeks ago, two top Biden aides have publicly stated that the administration is considering reducing levies on Chinese-made goods they call non-strategic in order to cut inflation. As I explained, the idea that the specific cuts they floated can significantly slow inflation is laughable, and their definition of “non-strategic” could not be more off-base.

The second source is a review of the Trump administration China tariffs that’s required by law because the statute that authorizes their imposition limited their lifespan. The administration can choose to extend them, eliminate them entirely, reduce all of them, or take either or both of those actions selectively, Some tinkering around the edges may justified – for example, because certain industries simply can’t find any or available substitutes from someplace else. But more sweeping cuts or removals could signal a stealth tariff rollback campaign that would be just as ill-advised and ill-timed.

And why, specifically, ill-timed? Because this talk is taking place just as the Chinese economy is experiencing major stresses, and freer access to the U.S. market would give the hostile, aggressive dictatorship in Beijing a badly needed lifeline.

For example, China just reported that its goods exports rose in April at their lowest annual rate (3.9 percent) since June, 2020. Exports have always been a leading engine of Chinese economic expansion and their importance will likely increase as the regime struggles to deflate a massive property bubble that had become a major pillar of growth itself.

It’s true that dictator Xi Jinping’s wildly over-the-top Zero Covid policy, which has locked down or severely restricted the operations of much of China’s economy, deserve much of the blame. But Xi has recently doubled down on this anti-CCP Virus strategy, and low quality Chinese-made vaccines virtually ensure that case numbers will be surging. So don’t expect a significant export rebound anytime soon without some kind of external helping hand (like a Biden cave-in on tariffs).

Indeed, China seems so worried about the export slowdown that it’s resumed its practice of devaluing its currency to achieve trade advantages. All else equal, a weaker yuan makes Made in China products more competitively priced than U.S. and other foreign counterparts, for reasons having nothing to do with free trade or free markets.

And since March 1, China – which every day determines a “midpoint” around which its yuan and the dollar can trade in a very limited range (as opposed to most other major economies, which allow their currencies to trade freely) – has forced down the yuan’s value versus the greenback by an enormous 6.54 percent. The result is the cheapest yuan since early November 3, 2020.

It’s been widely observed that such currency manipulation policies can be a double-edged sword, as they by definition raise the cost of imports still needed by the Chinese manufacturing base. But the rapidly weakening yuan shows that this is a price that Beijing is willing to pay.       

Finally, for anyone doubting China’s need to maintain adequate levels of growth by stimulating exports, this past weekend, the country’ second-ranking leader called the current Chinese employment situation “complicated and grave.” His worries, moreover, aren’t simply economic. As CNN‘s Laura He reminded yesterday, Beijing is “particularly concerned about the risk of mass unemployment, which would shake the legitimacy of the Communist Party.”

For years, I’ve been part of a chorus of China policy critics urging Washington to stop “feeding the beast” with trade and broader economic policies that for decades have immensely increased China’s wealth, improved its technology prowess, and consequently strengthened its military power and potential. The clouds now gathering over China’s economy mustn’t lead to complacency and any easing of current American tariff, tech sanctions, or export control pressures. Instead, they’re all the more reason to keep the vise on this dangerous adversary and even tighten it at every sensible opportunity.

Our So-Called Foreign Policy: Will a Russian Victory Really Bring On a World at War?

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Antony J. Blinken, Biden, China, Council on Foreign Relations, East China Sea, globalism, Japan, Kim Jong Un, national interests, North Korea, Our So-Called Foreign Policy, Russia, South China Sea, South Korea, Taiwan, The Wall Street Journal, Ukraine, Ukraine-Russia war, Vladimir Putin, war, Xi JInPing

Not only do American leaders seem pretty united on the need for the nation to do much more to help Ukraine defend itself from Russian invaders. They and the (overwhelmingly globalist) American political and chattering classes seem largely in agreement on one of the main consequences either of permitting Russia to win, or permitting him to win without inflicting major, lasting damage on Russia’s economy – a return to a world in which aggressive dictators like Russia’s Vladimir Putin will feel much freer than they have for decades to attack their neighbors.

That fear definitely has a troubling ring of reasonableness – and all the more so since, unlike previous historical eras in which such attacks and invasions were much more common, some of the actors possess nuclear weapons.

But there’s something these warnings are overlooking. However vivid such dangers are in principle, it’s hard to identify actual places around the world where potential conquerors have been bidng their time until receiving just the kind of signal that a Russian success in Ukraine allegedly would send.

If you doubt the prominence of this argument for greater U.S. involvement in the conflict, you haven’t been paying attention. For example, in his first public remarks after the invasion, President Biden claimed that “Putin’s actions betray his sinister vision for the future of our world — one where nations take what they want by force.”

In a speech a month earlier, his Secretary of State, Antony J. Blinken, asserted that one of the post-World War II global order’s guiding principles was a rejection of

“the right of one country to change the borders of another by force; to dictate to another the policies it pursues or the choices it makes, including with whom to associate; or to exert a sphere of influence that would subjugate sovereign neighbors to its will.

“To allow Russia to violate those principles with impunity would…send a message to others around the world that these principles are expendable, and that, too, would have catastrophic results.”

The conservatives on the Wall Street Journal editorial board, who don’t agree with the Biden administration on much of anything, similarly contended that “Whether the West admits it or not, the invasion is setting a precedent for what the world will tolerate in the 21st century.”

But check out this assessment of worldwide hot spots from the Council on Foreign Relations, often called the seat of America’s globalist foreign policy establishment. Where exactly are the Putins of tomorrow whose will to international power would be even be sharpened by a Russian victory in Ukraine?

Certainly not on the Korean peninsula or in the East China Sea. North Korea no doubt has designs on neighboring South Korea, but they’ve existed for decades. Ditto for China and Taiwan. It’s true that Kim Jong Un and Xi Jinping might be emboldened by an inadequate U.S. and international response to Putin’s war. But not from any relief that global norms of behavior that had been holding them back had weakened, or that a Russian victory had set some a kind of precedent – with binding power? Because they take the idea of rule of law more seriously in their treatment of foreigners than they do in their treatment of their own people? Please.

Other than these Asian conflicts – which also include China’s expansionism in the South China Sea, but which also long predate the Ukraine war – where are the aggressors-in-waiting who may feel freer to attack their neighbors? Should we include the other East China Sea dispute, where China is involved, too – even though U.S. allies Japan and South Korea are also contesting each other’s claims to some miniscule islands?

More important, where are the global hot spots where current or potential territorial rivalries could explode into conflict that would imperil global peace and security – including America’s? Nagorno-Karabakh (on the border of Armenia and Azerbaijan, unless you’ve been following this tiff closely)? As Mr. Biden would say, “Come on, man.”

I’m sure that there are flashpoints in sub-Saharan Africa that could eventually embroil entire regions in warfare. But it’s as cold-blooded as it is true that these are regions so chronically dysfunctional (and therefore largely disconnected from the wider world) that even complete chaos has no potential to spread much further – or inspire conqueror wannabees in regions of greater concern.

Closer to home for the United States, according to the Congressionally founded U.S. Institute of Peace, some small countries in Latin America have been quarreling with neighbors over territory since 1990, and if they did ignite conflict, refugees would of course come streaming to U.S. borders. But only once – in 1995 – did one of these feuds result in war (between Ecuador and Peru). And I’m glad I don’t have to make the argument that revanchists in either country are chomping at the bit to get a symbolic green light from a Russian victory in Ukraine.

The big takeaways here clearly are (1) that the world isn’t a tinderbox likely to burst into a series of truly dangerous international conflicts depending on the outcome of Russia’s war on Ukraine; and (2) that the potential conflicts that can affect the United States consequentially are and have long been driven by their own dynamics (including current and longstanding American approaches to these situations).

So as has been the case since Russian policy toward its neighbors became more belligerent, what should be driving the U.S. response should be examinations concerning the nature of concrete, specific U.S. interests that are or are not at stake. Claims that Ukraine’s continued independence and full sovereignty are all that stand between today’s relative calm among countries (if not in terms of civil conflicts) and an entire globe engulfed in war deserve the same fate as previous alarmist concotions like the domino theory – getting tossed onto what former President Reagan memorably called the “ash heap of history.”

Our So-Called Foreign Policy: Biden’s Worrisome State of the Union Message to China

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alliances, allies, Biden, China, energy, inflation, Our So-Called Foreign Policy, Russia, sanctions, State of the Union, Taiwan, Ukraine, Ukraine invasion, Vladimir Putin, Xi JInPing

Let’s start with a confession: I’m one of the numerous viewers and listeners who has no idea what President Biden meant when he ended his State of the Union address last night with an ad-libbed “Go get him!” right after his usual closing, “May God protect our troops.”

This seemingly provocative placement notwithstanding, it probably wasn’t a suggestion that the U.S. military would be roaring into action to help Ukraine win its war with Russia – which segues nicely into today’s theme of what message China probably gleaned from the speech.

The subject matters greatly because Chinese leaders have been eyeing a takeover of Taiwan and threatening the island’s independence even longer than Vladimir Putin has been eyeing a takeover of Ukaine, and for similar stated reasons. Just as Putin insists that Ukraine historically has been part of Russia, Beijing views Taiwan as a renegade province of China. And although there’s no important connection I can see between Ukraine’s fate and America’s own security and prosperity, Taiwan is the world leader in semiconductor manufacturing technology – which is crucial to U.S. military power and economic well-being.

That’s why I’m concerned that too much of the Biden speech signaled to China that its increasingly aggressive moves against the island can continue and even intensify with impunity.

For not only did the President once again vow that “our forces are not engaged and will not engage in conflict with Russian forces in Ukraine.” He added that “I’m taking robust action to make sure the pain of our sanctions  is targeted at Russia’s economy. And I will use every tool at our disposal to protect American businesses and consumers.”

In other words, although “we the United States of America stand with the Ukrainian people,” that’s only true as long as Americans themselves don’t run any significant risks or pay any significant price.

Nor is this Biden qualification limited to words. It’s precisely to avoid boosting already lofty U.S. inflation rates even higher than the President has excluded energy from his anti-Russia sanctions package so far – even though Putin’s massive earnings from oil and gas exports clearly help finance his Ukraine war. 

Mr. Biden did repeat his pledge that “the United States and our Allies will defend every inch of territory of NATO countries with the full force of our collective power.” But like Ukraine, which is not a member of that North Atlantic Treaty Organization, Taiwan is not an official ally. Therefore, China could well conclude that the United States would stay out of a Taiwan conflict for similar reasons.

The State Department has warned that “We have an array of tools that we can deploy if we see foreign companies, including those in China, doing their best to backfill U.S. export control actions, to evade them, to get around them.”

But if the administration’s top Ukraine sanctions priority to date has been shielding the U.S. economy from their impact, you couldn’t blame Xi Jinping’s regime for not taking seriously the notion that Washington would punish China for propping up Putin.

After all, the United States (unforgivably) has become highly dependent on his economy for a wide range of products. China’s markets for U.S. goods and services simply dwarf Russia’s. And indeed, these links have become so broad and deep that nearly the entire American big business community has become an ardent and highly effective lobby for preventing any boat-rocking. .

None of the above is to say that U.S. rhetoric and moves on the Ukraine, or any other foreign policy fronts, will be the sole or even the main determinants of China’s Taiwan strategy. After all, Beijing has been ramping up pressure on the island long befor the conflict in Eastern Europe broke out – for reasons ranging from concerns about Taiwan declaring its formal independence and potentially exposing China as a paper tiger in the process to Xi’s decision to link “reunification” to his legacy.

But just as American leaders should never make threats they can’t or won’t back up (or make commitments that create many more dangers than they can prevent, which I believe to be the case with NATO’s expansion into Eastern Europe and years of talk about adding Ukraine and other Russian neighbors), they need to be careful about signaling weakness or timidity. And I fear that’s exactly what was conveyed to China by the sharp contrast between President Biden’s apocalyptic warnings about the need to resist Putin’s aggression and the tight limits he revealed to his willingness to do so.              

(What’s Left of) Our Economy: U.S.-China Decoupling Help…From China!

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China, decoupling, Didi, Didi Chuxing, finance, investing, IPOs, national security, privacy, stock markets, tech, Wall Street, Xi JInPing, {What's Left of) Our Economy

Here’s an absolutely stunning and potentially crucial development that I sure didn’t anticipate: The Chinese government is emerging as one of the most powerful forces working to decouple the American and Chinese economies.

In fact, Beijing’s recent crackdown on Chinese entities (remember: since China has no free market economic or financial system, these organizations shouldn’t be called “companies” or “businesses”) could rival the tariffs and the technology curbs imposed by the Trump administration and continued by President Biden as a means of (1) reducing America’s dangerous economic reliance on this increasingly hostile rival, and (2) cutting the long-time outflow of valuable U.S. capital and knowhow that inevitable enriches and strengthen the People’s Republic.

This turn of events is so unexpected, because, as I’ve written, finance looms as the one policy front on which decoupling had made the least progress.  Worse, despite the obvious and more subtle threats posed by this trend to individual investors (described insightfully here by investment analyst and friend Steven A. Schoenfeld), not to mention to American security, prosperity, and privacy, the flow of U.S. capital to the People’s Republic kept swelling. So far this year alone, a record $12.5 billion has been raised for Chinese entities on U.S. stock markets in 34 listings – way up from $1.9 billion worth of new listings in 14 deals during the same period last year. And many more seemed on the way.

But don’t think that these numbers come anywhere close to revealing China’s presence in U.S. finance. The kinds of initial public offerings (IPOs) mentioned just above have been appealing to Chinese entities and to the regime because with the U.S. exchanges the world’s biggest by far, passing muster with them is like a Good Housekeeping Seal of Approval. Therefore, it’s inevitably encouraged investors the nation and world over to pile in. As a result, the total market capitalization of these entities stood at no less than $2.1 trillion as of two months ago.

In recent days, however, China has made clear that some national security concerns of its own, along with dictator Xi Jinping’s determination to bring these gigantic, highly advanced organizations closer to heel, were now outweighing the prospect of continuing to attract more oceans of U.S. and other global investment. Just two days after ride-sharing giant Didi Chuxing raised a record $4.4 billion in a June 30 Wall Street debut, Beijing’s internet regulators ordered it to stop signing up users. This past Monday, China ordered that its app be removed from Chinese app stores (as recounted here).  The announced justifications: the need both to protect national security, and users’ personal data. 

But since China’s leaders are not exactly known as champions of personal privacy, the former was surely the real reason, along with the desire to reassert control. Last weekend, in messages presumably endorsed and even placed by Chinese authorities on the Twitter-like platform Weibo, Didi was actually accused of transferring the data it collected overseas.

Since then, moreover, the crackdown has gone beyond Didi. On Monday, China also announced a cyber-security review of two entities also listed in U.S. markets, and The Wall Street Journal reported that Chinese regulators had suggested that Didi postpone its IPO. The following day, Beijing “issued a sweeping warning to its biggest companies, vowing to tighten oversight of data security and overseas listings just days after Didi Global Inc.’s contentious decision to go public in the U.S.”

This news, along with the beatings taken by the share prices of these U.S. listed companies and major counterparts in trading worldwide, have prompted widespread speculation that the Chinese IPO wave in American finance is over, a least for the time being. And almost right on cue, reportedly today a Chinese entity decided to drop its own U.S. IPO plans because of Beijing’s new stance. 

Wall Street of course isn’t happy – huge underwriting and trading fees stand to be lost. But China’s evident change of priorities represents a golden opportunity for U.S. leaders to jump in and lend a helping hand. They should make the regulatory moves needed to keep Chinese entities out of U.S. markets for good going forward, and speed up efforts to kick out those remaining. And as is not the case with other decoupling policies, American officials seemingly can be certain that China’s powerful flunkies in the Washington, D.C. swamp won’t be trying to gum up the works.

Our So-Called Foreign Policy: The Unanswerable Question Driving Biden’s China Policy

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Antony J. Blinken, Asia-Pacific, China, foreign policy, globalism, Indo-Pacific, liberal global order, national security, Our So-Called Foreign Policy, rules-based global order, strategy, Taiwan, Xi JInPing

Two of the first maxims of strategy in world affairs (and probably in some other realms, too) are that (a) intentions and capabilities are fundamentally different and that (b) the former are much harder to gauge than the latter. These rules of the road in turn lead promptly to a key lesson: The greater the extent to which plans are based on intentions, the likelier they are to produce failure.  

The difference between measuring intentions and capabilities and the resulting policy implications matters crucially these days. For the evidence keeps mounting that the Biden administration is relying more on gauging China’s intentions in formulating its approach to the People’s Republic (PRC) and less on the much sounder foundations of assessing Beijing’s wherewithal and, most important, how this capacity’s dangers to specific U.S. interests are evolving – including over Taiwan, the newest and scariest bilateral flashpoint.  . 

The reason for focusing on capabilities is no great mystery. Figuring out how strong or weak a country’s military and economy are entails dealing with matters that are readily measurable to begin with. Although dictatorships like China’s in particular often go to great lengths to present misleading economic data, and misinformation about the state of their armed forces, the PRC’s competitiveness can be judged pretty dependably by tracking its interactions with other economies – e.g., its export performance, its attractiveness as a magnet for foreign investment. And U.S. intelligence is good enough to determine roughly how many soldiers and weapons, and the quality of the latter, that China could bring to bear in various contingencies.

Even more obvious – and important – is the case for deciding on U.S. interests. For whatever a potential adversary’s overall capabilities, why should Americans care about those that can’t plausibly affect whatever goals and missions that the United States decides it values?

Identifying what China’s leaders want is a qualitatively different and more formidable challenge. Good intelligence can provide some valuable information, as can face-to-face dealings with Beijing’s representatives. But ultimately, measuring intentions is an exercise in mind-reading, and it’s rendered all the tougher because of the secretiveness of China’s political system and the cultural gaps dividing East Asian countries like China’s and their western counterparts like the United States.

Which is exactly why the Biden administration’s strategy toward the PRC is so troubling. A heavy emphasis on intentions is clear from at least two of its features.

The first is its obsession with playing word games to define how it wants the relationship with China to develop, which in turn faithfully reflects the globalist position that achieving various types of relationships with allies, adversaries, and countries in between should be a high foreign policy priority. As I’ve written previously, that’s a great way to substitute form for substance, and to rationalize failure to achieve or preserve particular valued objectives in the here and now for the sake of payoffs stemming from a sense of mutual obligation that could be entirely unilateral and imaginary, over a time frame that tends to keep lengthening. Think of it this way – it’s easy to avoid rocking the boat if you don’t care who owns or controls the vessel.

The Biden administration, however, has taken relationship fetishizing to a whole new level. How else could one reasonably characterize all the time and effort it’s devoted to terming U.S. dealings with Beijing as a “competition,” or an “extreme competition,” or “a steep competition,” or a “stiff competition” (see here for the last two) or a relationship that will be, in Secretary of State Antony J. Blinken’s words, “competitive when it should be, collaborative when it can be, adversarial when it must be.”

Why do the Biden-ites think anyone cares or should care? In particular, why do they think China cares or should care? Do they have any evidence of much thinking in Beijing along these lines? Or that any Chinese definition of a desirable relationship relationship would be remotely acceptable to the United States?

If anything, the President’s declaration that Chinese dictator Xi Jinping “is deadly earnest on [China] becoming the most significant, consequential nation in the world. He and others, autocrats, think that democracy can’t compete in the 21st century” can only mean he thinks that win-win ties are the last things on Beijing’s mind. Unless Mr. Biden believes that Xi is just interested in purely verbal bragging rights?

The second feature of Biden foreign policy that reveals a potentially dangerous emphasis on intentions is the refusal of the President and his top aides to define U.S. interests with any specificity – or even to speak concretely about the very idea of purely U.S. interests.

Their rhetoric is peppered with phrases like Mr. Biden’s claim that during his first phone call with Xi, “I made absolutely clear that I will defend American interests across the board.” But you’ll search in vain for meaningful elaborations beyond “I also told President Xi that we’ll maintain a strong military presence in the Indo-Pacific, just as we do with NATO in Europe — not to start a conflict, but to prevent one” – which of course refers to American commitments that have been in place for decades, not to anything new, much less that reflects concerns heightened for any reason.

What you will find – ad nauseam – are statements like Blinken’s declaration that the United States is “committed to leading with diplomacy to advance the interests of the United States and to strengthen the rules-based international order. “That system is not an abstraction. It helps countries resolve differences peacefully, coordinate multilateral efforts effectively, and participate in global commerce with the assurance that everyone is following the same rules. The alternative to a rules-based order is a world in which might makes right and winners take all, and that would be a far more violent and unstable world for all of us.”

Blinken of course might be entirely right on the merits. But it was more than a little interesting that the Chinese response to his remarks – which took place at that confrontational bilateral March meeting in Anchorage, Alaska – emphasized that the rules-based order is nothing more than a system selfishly “advocated by a small number of countries”; that “The United States itself does not represent international public opinion, and neither does the Western world;” and no doubt most important, “the United States does not have the qualification to say that it wants to speak to China from a position of strength.”

In other words, as the Chinese see it, whatever Washington’s view of “right,” what matters is that it lacks the might to create or maintain it over China’s objections – which evidently are legion.

None of this is to say that specifying concrete interests is a guarantee of foreign policy success. But how else can that goal be achieved without setting out objectives considered vital to the nation’s security and prosperity, communicating them abroad in no uncertain terms, and ensuring that enough power is available to prevail when they’re threatened whether Americans guess correctly about potential adversaries’ intentions or not?

And these questions have moved to the forefront lately because Sino-American tensions are rising steadily over Taiwan – the world’s new leader in semiconductor manufacturing technology, which near neighbor China views as a renegade province. Worries are understandably rising that Washington and Beijing might stumble into a conflict that neither truly seeks. If the Biden administration could straighten out its own thinking about Taiwan and other U.S. interests in the Indo-Pacific region, the odds of such an unnecessary catastrophe could at least be considerably reduced.    

 

Following Up: A New Warning on U.S. Allies’ Reliability

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alliances, allies, Asia, Asia-Pacific, Biden, China, deterrence, Following Up, Indo-Pacific, infotech, multilateralism, national security, Nonproliferation Policy Education Center, semiconductors, Sheena Greitens, Taiwan, Taiwan Semiconductor Manufacturing Company, tech, TSMC, Xi JInPing, Zack Cooper

Well isn’t this a kick in the pants for the Biden administration – and by extension for all Americans?. No sooner did the President give a major speech to U.S. allies on his plans to return them to the center of American foreign policy-making because they’ll be such crucial assets in vital efforts to achieve essential goals like coping with China’s rise, than a new study comes out reporting that these hopes could be in vain. 

Specifically, the United States’ allies in Asia could well stay on the sidelines in what’s arguably become the most important potential showdown with China of all: ensuring Taiwan’s independence.

As known by RealityChek regulars, keeping Taiwan free of Beijing’s control has become so pressing for two reasons. First, Chinese dictator Xi Jinping is sounding and acting more determined than ever to “reunify” what he and his predecessors have regarded as a breakaway province by whatever means necessary – including using force. And second, a Taiwanese firm, Taiwan Semiconductor Manufacturing Corporation (TSMC), has recently grabbed the global lead in actually producing (as opposed to designing) the world’s most advanced semiconductors. If China manages to control TSMC’s capabilities, it could use them to build the electronic devices and defense systems that would secure substantial technological and military superiority over the United States.

President Biden is of course correct in arguing that the more allies the United States can mobilize, the easier it will be to handle China’s increased aggression and economic predation. But that claim inevitably assumes that these allies will actually join with America to push back against China, and especially that Washington can count on their assistance if heaven forbid the missiles and bullets start flying.

And this assumption is exactly what’s questioned in a paper recently published by the Washington, D.C.-based Nonproliferation Policy Education Center. According to authors Zack Cooper and Sheena Greitens, there’s not a single country in the Asia-Pacific (or, as it’s now officially called by the U.S. government, the Indo-Pacific) region that’s sure to stand shoulder to shoulder with American forces as they seek to actually repel either a Chinese attack on Taiwan, or an effort by Beijing to turn the island into a satellite through coercive means short of full invasion, like limited military strikes, cyber-attacks, or an embargo.

In fact, write Cooper and Greitens, these allies not only would likely balk at sending their own ships, plans, and troops to buttress American forces. To varying degrees, they’d be reluctant to allow the United States the kind of access to their military bases needed to prevail over China in any of the above contingencies.

The authors believe that sufficient allied cooperation can be generated if the United States begins (ASAP!) “a series of detailed discussions with key allies about their roles in different contingency scenarios involving China and Taiwan (and for some, the South China Sea).” That advice sounds fine as far as it goes.

But the need in the first place for “detailed discussions” on such dangerous and perhaps rapidly growing threats – which would leave all countries in the region far less prosperous and prosperous if not deterred or beaten back – makes appallingly clear just how dysfunctional these alliance relationships have become. Moreover, you can be sure that the longer and more detailed these discussions become, the more allied doubts they’ll reflect, and the less likely they’ll be to produce the kind of certainty when push comes to shove that the United States or Taiwan will need.

I don’t view Cooper and Greitens analysis as gospel. But in my experience, the Nonproliferation Policy Education Center has done serious work on Asian security issues in the past, and the larger project of which this essay is a part has had support from sponsors across the political spectrum. So its warning is worth taking seriously, and if its arguments are on target, the problem they describe will resist easy solution – and not just because truly worthwhile agreements with the allies could take years to negotiate, but because the U.S.-based semiconductor production capacity needed to reduce Taiwan’s importance will take just as long to create.

Luckily, as indicated in the piece linked just above, both Congress and the new administration claim to recognize the need – at least rhetorically – to restore cutting-edge U.S. competitiveness in this and other information technology manufacturing. In the meantime, the Biden administration should of course try maintaining enough of a semblance of allied unity vis-a-vis China to give Beijing pause over Taiwan. Hopefully, Washington  can even inspire some genuine support for preserving the island’s independence.

But as I’ve written previously (in the afore-linked National Interest piece), the greater the emphasis placed on resolving the semiconductor challenge via the homegrown solution of reviving the domestic industry, instead of relying mainly on protecting Taiwan’s security militarily, the better the odds of maintaining American security and prosperity. And in any necessary negotiations with the allies, the sooner President Biden abandons his globalist faith in apologetics and gauzy preaching, and acknowledges the need for at least some of the hard-bargaining Trump-ian “transactionalism” he’s decried, the better.  

Our So-Called Foreign Policy: “Anonymous” Inanity on China

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Atlantic Council, Biden, China, China Strateg Group, decoupling, Donald Trump, Foreign Affairs, George F. Kennan, globalism, Iran, Our So-Called Foreign Policy, The Long Telegram, The Longer Telegram, X Article, Xi JInPing

How lucky for President Biden that, just as he’s announced a wide-ranging review of U.S. China policy (after he and his supposedly fellow foreign policy mavens spent the entire presidential campaign lambasting Donald Trump’s initiatives and clearly conveying that they knew exactly how to fix these alleged blunders), a wavelet of advice has appeared offering answers, at least at the broad brush level.

How unfortunate for the United States, though, that so little of this advice has any prospect of advancing and defending American interests vis-a-vis China, much less improving on the Trump efforts to neutralize the China threat. In fact, if Mr. Biden follows his longstanding Beijing-coddling instincts and generally heeds the authors, the United States is bound to become more vulnerable and more beholden to the People’s Republic than ever.

Two blueprints for the President to follow have emerged in recent weeks: a memo from an anonymous author who clearly views him or herself as a latter day George F. Kennan; and a collective effort from a “China Strategy Group” dominated by Silicon Valley figures (and co-chaired by Google co-founder Eric Schmidt). The first is the most easily disposed of, and will be the subject of today’s post. Tomorrow I’ll discuss the Group’s China grope.

Kennan, in case you’ve forgotten, was the mid-twentieth century American diplomat whose analyses of Soviet power and behavior (including an early 1946 memo written during his stint in Moscow that became known as “The Long Telegram”) powerfully shaped the Cold War strategy of containment adopted by Washington. He was by no means perfect, but in my view amply deserves his reputation as one of the most incisive foreign policy analysts in American history – which is why if he read the new and arrogantly titled “The Longer Telegram,” he’d probably be hard-pressed to decide whether to laugh or cry.

The most eye-catching proposal made by the author (whose desire for anonymity apes that displayed Kennan in a 1947 article that grew out of “The Long Telegram” that he published in the journal Foreign Affairs as “X”): urging that rather than focus on broadly changing China’s totalitarian system of government and control over the economy, or targeting the Chinese Communist Party (CCP) in particular as Public Enemy Number One, U.S. policy recognize Chinese leader Xi Jinping and his inner circle as the dominant game changer that has turned the People’s Republic and its practices from a “manageable” challenge into today’s mortal danger not only to the United States but to the entire world.

I actually agree with the author that prompting Chinese reform of any kind is a fool’s quest – a prime reason that I regard substantially decoupling America’s economy from China’s as the best way to ensure that the nation can handle whatever problems Beijing creates. It was also heartening to see “Anonymous” recognize that dealing with China successfully will be that much harder for Washington if it keeps going out of its way to demonize Russia – which has clearly become a Democratic Party staple.

But concentrating U.S. China policy “through the principal lens of Xi himself” and seeking to capitalize on “significant” opposition within the CCP to “Xi’s leadership and its vast ambitions” in order to “return [China] to its pre-2013 path—i.e., the pre-Xi strategic status quo” suffers from at least two glaringly obvious flaws.

The first is Anonymous’ belief that however numerous China’s challenges to U.S. interests before Xi gained control, “they were manageable and did not represent a serious violation of the US-led international order.” In fact, even the author him/herself doesn’t seem to believe this.

If he or she did, why admit that the current Chinese challenge, “to some extent, has been gradually emerging over the last two decades”? And that that “China has long had an integrated internal strategy for handling the United States….” And that pursuing its goals “nationally, bilaterally, regionally, multilaterally, and globally….has been China’s approach for decades.” And that “What links” today’s China threat and that posed by the Soviet Union in particular during the early Cold War is that “the CCP, like the former CPSU [Communist Party of the Soviet Union], is an avowedly Leninist party with a profoundly Marxist worldview”?

Have Xi’s ambitions magnified the threat? Of course. But – as Anonymous also admits – not because Chinese leaders’ goals have fundamentally changed, but because growing economic and therefore military strength have brought them within reach.

In the author’s own words,

“China has undergone a dramatic economic rise in recent decades, and it is using its economic power to engage in coercive practices and to become the center of global innovation….China is transforming its economic heft into military strength, modernizing its military and developing capabilities to counter the United States’ ability to project power in the western Pacific.”

And although China has generated much of this impressive progress through its own devices, it’s also indisputable that its closely related economic, technological, and military advances stem from the U.S. and other free world resources and knowhow that flooded into China precisely when the bipartisan Washington consensus viewed any possible dangers emanating from Beijing as “manageable.” In other words, whether knowingly or not, Anonymous in effect is arguing for a return to the policies that helped create the problem he’s (correctly) identified. And P.S. Since he or she is described as “a former senior government official with deep expertise and experience dealing with China,” chances are the author had more than a minor hand in crafting this failed approach.

The second fatal flaw in “The Longer Telegram” is its assumption that American foreign policymakers understand enough “about the fault lines of internal Chinese politics” to manipulate them into bringing back those allegedly manageable pre-Xi leaders. To which anyone with even the skimpiest knowledge of American diplomacy should be responding, “Remember Iran.”

For since that country’s 1979 revolution replaced a generally pro-American monarch with a zealously anti-American Shiite Islamic theocracy, U.S. leaders have tried repeatedly to find influential moderates that would help reshape the new regime’s behavior. Because the United States knew so little about the internal politics and fault lines of this leadership, all these efforts have failed. Does Anonymous really believe that Washington’s knowledge of China’s even more secretive leadership is any better?

The Atlantic Council, the globalist Washington, D.C. think tank that published “The Longer Telegram,” calls it “one of the most insightful and rigorous examinations to date of Chinese geopolitical strategy and how an informed American strategy would address the challenges of China’s own strategic ambitions.”

Actually, its signature recommendation is so internally contradictory and naive that I don’t blame the author for wanting to stay Anonymous.

Im-Politic: New Signs that Biden Will Lift the China Tariffs – & That Beijing is Counting on It

Tags

China, China tariffs, currency, election 2020, exchange rates, Im-Politic, Joe Biden, Kamala Harris, Mike Pence, Susan Page, tariffs, Trade, trade war, Vice Presidential debate, Xi JInPing, yuan

Between wall-to-wall coverage of the fly and the smirks, it was easy to lose sight of one of the most important reveals of Wednesday’s vice presidential debate: There’s now more reason than ever to believe that if Joe Biden becomes President, he’ll lift President Trump’s tariffs on China. And just as important, there’s now more reason than ever to believe that this is exactly what China is expecting.

Whether you believe that Trump-type China trade policies have been needed and/or have worked (two closely related but not identical matters), the likelihood that the tariffs would be toast is incredibly important because it begs the questions of whether the Democratic nominee has a coherent alternative China trade poicy in mind that can adequately serve U.S. interests (along with alternative investment and tech policies) and whether he’s capable of developing one.

As known by RealityChek regulars, I believe that on both scores, the answer is an emphatic “No.” But what’s more important right now is making clear that Biden running mate Kamala Harris’ debate performance strongly indicated that a major course change is coming.

First, though, a deserved swipe at moderator Susan Page’s China question. Page, the Washington Bureau Chief of USA Today, inadvertently reminded viewers (and should have reminded the Commission on Presidential Debates that organizes such events) why veteran campaign and White House reporters are almost uniquely unqualified to serve in these roles – at least if you’re looking for some minimally satisfactory discussion of issues.

For these journalists tend to be preoccupied with politics, not policy – and with the most superficial horse race or gossipy dimensions of politics at that. As a result, their substantive background is even less impressive than that usually boasted by colleagues who are supposed to know something about the issues they cover (a low bar).

So although Page deserves some credit for even bringing up the topic of China policy, no one should have been surprised by the Happy Talk nature of her question. I mean, here’s a country that’s been blamed across the American political spectrum for destroying huge numbers of American jobs with its wide-ranging trade predation, whose tech companies have been just as widely deemed as dangers to U.S. national security and American’s privacy rights, which increasingly is threatening U.S. allies and other countries in the “Indo-Pacific” region (foreign policy mavens’ latest name for the Asia-Pacific region, due to India’s, and which is treating its own population ever more brutally.

And Page’s question was dominated by claims that China is “a huge market for American agricultural goods” and “a potential partner in dealing with climate change and North Korea”? Not to mention suggesting that its role in bringing the coronavirus to the nation and world is nothing more than a charge leveled by President Trump?

All the same, Harris’ answer was what counted:

“Susan, the Trump administration’s perspective, and approach to China has resulted in the loss of American lives, American jobs and America’s standing. There is a weird obsession that President Trump has had with getting rid of whatever accomplishment was achieved by President Obama and Vice President Biden. For example, they created, within the White House, and office that basically was just responsible for monitoring pandemics. They got away, they got rid of it.”

Previously that evening, she argued that:

“You, [Vice President Mike Pence] earlier referred to, as part of what he thinks is an accomplishment, the President’s trade war with China. You lost that trade war. You lost it. What ended up happening is, because of a so called trade war with China, America lost 300,000 manufacturing jobs. Farmers have experienced bankruptcy, because of it. We are in a manufacturing recession, because of it. And when we look at this administration has been, there are estimates that by the end of the term of this administration, they will have lost more jobs than almost any other presidential administration.”

Let’s leave aside the accuracy or relevance of any of these points – like the 300,000 manufacturing jobs claim loss claim that apparently comes from an economist who admits his 2016 predictions about economy’s performance during the Trump era were completely off-base; or the plainly nutty insistence that the Trump China policy cost American lives.

If Harris believes any of this, and especially that the trade war has been “lost,” then clearly the only important question about the China tariffs isn’t whether they’ll be lifted by a President Biden, but how fast.

Moreover, there’s abundant evidence that Biden fully agrees that these Trump measures have been seriously counter-productive. When asked in August if he’d “keep the tariffs,” he responded, “No. Hey, look, who said Trump’s idea’s a good one?” said Biden. “Manufacturing has gone into a recession. Agriculture lost billions of dollars that taxpayers had to pay.” In other words, most of the main anti-tariff arguments in two pithy sentences.

An aide to the former vice president tried to walk back these remarks, shortly afterwards, but Biden’s words perfectly fit journalist Michael Kinsley’s epic definition of what’s usually mischaracterized in American politics as a “gaffe”: an instance “when a politician tells the truth—some obvious truth he isn’t supposed to say.”

Equally interesting and important with regard to the Biden-Harris China policies – one clear and one possible new sign that Beijing is actively rooting for their success, and assuming the tariffs’ removal. The first came during the vice presidential debate, when Chinese authorities censored some of Pence’s critical comments on China just as Chinese audiences were about to hear them, and then restored the signal in time for Harris’ rejoinder.

The second came last night, when in its first announcement since the end of its Golden Week holiday of a new exchange rate for China’s currency, the yuan, versus the U.S. dollar, Beijing revalued (i.e., made it more expensive compared with the greenback) by the greatest amount in four and a half years. The main reason – at least as I see it: China believes that Biden will win, and is permitting its currency to strengthen because any competitiveness loss by its exports resulting from this and even significant further revaluation will be more than offset by the removal of U.S. levies that have typically hit 25 percent.

Of course, I could be wrong about Biden. So could China. But keep in mind that the former Vice President boasts that he knows Chinese dictator Xi Jinping well because of all the time he’s spent with him. Does anyone seriously think that, by the same token, Xi hasn’t learned a thing or two about Biden as well?

Glad I Didn’t Say That: The Voice of Experience on China?

Tags

China, election 2020, Glad I Didn't Say That!, Joe Biden, Xi JInPing

“I’ve spent more time with in private meetings with Xi Jinping than any world leader.”

— Democratic Presidential candidate and former Vice President Joe Biden, quoted on May 2, 2020

Xi Jinping “is a guy who wants to feel it and taste it, and he’s prepared to show another side of the Chinese leadership.”

— Democratic Presidential candidate and former Vice President Joe Biden, 2012

Xi Jinping “is a guy who doesn’t have a democratic — with a small d — bone in his body. This is a guy who is a thug.”

–– Democratic Presidential candidate and former Vice President Joe Biden, February, 2020

(Sources: “Biden Aims to Out-Tough Trump on China While Invoking His Obama Experience,” by Warren P. Strobel and Sabrina Siddiqui, The Wall Street Journal, May 2, 2020, https://www.wsj.com/articles/biden-aims-to-out-tough-trump-on-china-while-invoking-his-obama-experience-11588420801 and “‘This is a guy who is a thug’: how the US elite became hawks on Xi’s China,” by Demitri Sevastopulo, Financial Times, October 8, 2020, https://www.ft.com/content/75ce186e-41f7-4a9c-bff9-0f502c81e456)

Im-Politic: Bloomberg in China’s Pocket?

Tags

China, election 2020, Financial Times, Im-Politic, Ivanka Trump, Laura Ingraham, Michael Bloomberg, Michael Kranish, Trump, Washington Post, Xi JInPing

Boy! I thought Michael Bloomberg’s business’ dependence on China was worrisome when I first read this early January Financial Times report on the billionaire Democratic presidential candidate’s lucrative conference-holding business in the People’s Republic!

Then thanks to a segment last week on Laura Ingraham’s Fox News cable talk show, I checked out this Washington Post piece on the same subject – which I somehow missed – and I’ve gotten even more worried. And since Bloomberg has been rising steadily in the polls in recent weeks, and is spending a big chunk of his fortune on the campaign, you should be worried, too.

Now I know what at least some of you are thinking: President Trump and his family have done a lot of business with China, too. So why single out the former New York City mayor?

Here’s why: First, I strongly agreed that it was unacceptable for presidential daughter Ivanka Trump to stay involved in any way with her fashion business after her father’s election, especially since it sourced products from China and sought to sell in the Chinese market. She finally agreed with this (widespread) view and shut down the brand in mid-2018. So that’s one big difference between the Trumps and Bloomberg, since the latter is still making big bucks in China.

More important, though – with Trump tariffs still in place on literally hundreds of billions of dollars worth of prospective Chinese exports to the United States, and the President having made life tough for China in numerous other major ways ranging from prosecuting telecommunications giant Huawei to strongly supporting Taiwan in word and deed, can anyone seriously believe that Mr. Trump has been soft on Beijing?

Bloomberg, by contrast, clearly has, and his record of panda-hugging is not only several years old, but has continued unabated during his run for the White House. The aforementioned Post article spells out in detail the pro-China positions he’s taken, which include opposition to the Trump tariffs (without explaining how he’d deal with Chinese trade abuses he’s acknowledged) and the insistence that China’s communist leader Xi Jinping “is not a dictator” (made as Beijing was cracking down on Hong Kong’s democracy protests and imprisoning on a massive, concentration camp-like scale members of the country’s Muslim Uighur minority group.

And when his ongoing business dealings with the Chinese are examined in detail, it’s easy to see why Bloomberg has worked so hard to remain in Beijing’s good graces. For example, as the Post reported, Bloomberg ”expanded one of his company’s financial indexes, which could steer $150 billion into China while earning his firm an undisclosed amount in fees.”

In effect, this move awarded the Chinese government and the various commercial and financial entities it controls a Good Housekeeping Seal of Approval valued immensely by big institutional investors who control trillions of dollars worth of savings around the world.

Moreover, according to Post reporter Michael Kranish, “mainland China accounts for 1 percent of Bloomberg LP’s [$10 billion in annual] revenue and Hong Kong for another 4 percent.”

As for those China conferences, the Financial Times revealed that

“live events now make up nearly 15 per cent of all revenues for the news division that sits within the billionaire’s financial data company.

“This has grown from less than 1 per cent in 2014, thanks largely to the success of one event: the New Economy Forum. Mr Bloomberg launched the conference last year, aimed at connecting global business leaders with the Chinese elite.

“Only in its second year, the NEF already makes up about 65 per cent of all live events revenue for Bloomberg Media, according to a spokesperson.”

And if you still doubt China’s importance to Bloomberg’s coffers, consider that, as Kranish wrote, Bloomberg “has led efforts since 2015 to make it easier for U.S. companies to trade in Chinese currency, a move embraced by China’s largest banks” – which are of course all run by the state.

Bloomberg’s successes in public opinion surveys anyway has led to charges that he’s trying to buy the presidency. At least equally important to ask is whether the Chinese have bought Bloomberg.