Glad I Didn’t Say That! Did Yellen Just Swing and Miss on China?

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Biden adminstration, China, Glad I Didn't Say That!, Janet Yellen, Xi JInPing

“Yellen Calls for ‘Constructive’ China Relationship. The Treasury secretary struck a more conciliatory note in a speech Thursday.”

– New York Times headline, April 20, 2023

“As Xi Befriends World Leaders, He Hardens His Stance on the U.S.”

– New York Times headline, April 20, 2023

(Sources: “Yellen Calls for ‘Constructive’ China Relationship,” by Ana Swanson, The New York Times, April 20, 2023, https://www.nytimes.com/2023/04/20/business/economy/yellen-us-china-relationship.html and “As Xi Befriends World Leaders, He Hardens His Stance on the U.S.” by David Pierson, Ibid., April 20, 2023)

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Our So-Called Foreign Policy: China’s Not Getting Biden’s (Vague) Message

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Asia-Pacific, Biden, Biden administration, China, Indo-Pacific, Japan, national interests, Our So-Called Foreign Policy, Russia, Taiwan, Taiwan Strait, Vladimir Putin, Xi JInPing

Everyone old enough to read this post is way more than old enough to remember all the optimism that emanated from the last summit between President Biden and Chinese dictator Xi Jinping – because it took place just under two months ago.

In particular, as the White House stated, Mr. Biden

“reiterated that [the bilateral] competition should not veer into conflict and underscored that the United States and China must manage the competition responsibly and maintain open lines of communication. The two leaders discussed the importance of developing principles that would advance these goals and tasked their teams to discuss them further. “

In other words, Xi said that he bought in to this idea of a responsibly managed Great Power competition. And this conclusion quickly became the conventiona wisdom about the summit. As The New York Times argued, despite

“the deeply divergent views behind their disagreements, including over the future of Taiwan, military rivalry, technology restrictions and China’s mass detentions of its citizens….with the stakes so high, both Mr. Biden’s and Mr. Xi’s language represented a choice not to gamble on unrestricted conflict but to bet that personal diplomacy and more than a decade of contacts could stave off worsening disputes.”

And the U.S. Institute of Peace, a Congressionally-sponsored “independent” think tank, closely paraphased the President’s main claim: “Despite the differences between both countries, there appears to be a growing openness to the use of diplomacy to manage the relationship.”

Yet it’s already clear – from China – that these contentions aren’t aging so welll. Just consider what’s happened in the last month alone:

>In mid-December, China began stepping up naval and air drills near a chain of southern Japanese islands, including sending a carrier battle group that simulated an attack on this Japanese territory.

>Several days later, the Chinese teamed up with Russia’s Pacific fleet for a week of joint exercises that Moscow said [quoting Reuters here] “included practising how to capture an enemy submarine with depth charges and firing artillery at a warship.”

>On December 21, a Chinese fighter jet flew within 20 feet of a U.S. Air Force reconnaisance plane flying over the South China Sea.

>On Christmas Day, 47 Chinese military aircraft flew across the median line over the Taiwan Strait and into air space claimed by the island. Reportedly, the incursion was the largest in months.

>And on December 30, Xi and his Russian counterpart, Vladimir Putin, held a videoconference in which Xi promised “in the face of a difficult and far from straightforward international situation,” Beijing was ready “to increase strategic cooperation with Russia, provide each other with development opportunities, be global partners for the benefit of the peoples of our countries and in the interests of stability around the world.”

China predictably blamed U.S. provocations and Japan’s recently announced and dramatic military buildup for this dangerous sequence of events, but the more important point by far is this: The Biden administration continues its long-time habit (see, e.g., here) of speaking in terms of processes and procedures that can only reenforce the impression of America defining its interests in the Asia-Pacific region in dangerously vague ways, and China obviously keeps thinking of its objectives in much more specific, concrete ways. In other words, it’s time for much straighter talk from the United States.   

Our So-Called Foreign Policy: Will China Dupe Washington Again?

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Biden, China, energy, Our So-Called Foreign Policy, Paracells, Russia, South China Sea, Spratlys, The New York Times, U.S. Navy, Ukraine, Xi JInPing

Well, that didn’t take long. Just two weeks after President Biden’s face-to-face meeting with Chinese dictator Xi Jinping in Bali, Indonesia raised hopes of improved Sino-American relations, Beijing is acting like it’s determined to dash them.

Not that the expressed hopes were especially high. Mr. Biden himself said he aimed “to ensure that the competition between our countries does not veer into conflict, whether intended or unintended.  Just simple, straightforward competition. It seems to me we need to establish some commonsense guardrails” to “manage the competition responsibly” (as the White House put it in post-meeting statement).

But this morning EST, the Chinese military announced that it had “Organised sea and air forces to follow, monitor, warn and drive away” a U.S. warship that had sailed into waters Beijing claims near a group of islands in the South China Sea.

China’s claim has been rejected by international legal authorities, and the United States Navy regularly sends ships into the area to reflect its “continued commitment to….every nation’s right to fly, sail, and operate wherever international law allow.” The Navy added that “At the conclusion of the operation,” the destroyer “exited [China’s] excessive claim area and continued operations in the South China Sea.”

The point here is that China’s reactions to what the United States calls “Freedom of Navigation Operations” represent exactly the kind of opportunity for a conflict-igniting accident or miscalculation that President Biden’s guard rails idea seeks to avoid – and that China isn’t especially interested.

Also today, China declared its readiness to “forge a closer partnership” on energy with Russia – surely a sign of Beijing’s continued defiance of U.S. and European efforts to deny Moscow resources for financing its invasion of Ukraine.

As also reported by the Associated Press, President Biden “has warned Xi of unspecified consequences if Beijing helps [Russia] evade sanctions,” but this announcement indicates that any “Spirit of Bali” doesn’t extend in Xi Jinping’s eyes to helping end this dangerous conflict. In fact, I suspect it reflects China’s ongoing happiness that Washington is tying up so many military resources to aid Ukraine’s resistance that it’s degrading America’s ability to counter China’s ambitions in Asia – and especially a possible invasion of Taiwan, the global leader in manufacturing the world’s most advanced semiconductors.

Early during the Cold War, then Chinese dictator Mao Zedong devised a strategy called “fight fight talk talk.” As explained by the New York Times,

“The idea was that even as you seek opportunities to make gains on the battlefield, to expand your territory and gain in strength, you keep on negotiating even though you have no interest in a compromise solution and intend to win complete victory. The talk-talk part of the strategy gives mediators the sense that they are doing something useful, while, by holding theoretically to the possibility of a negotiated solution, you deter great- power military intervention in support of your adversary.”

As Times reporter Richard Bernstein explained, when it came to U.S. efforts to negotiate a deal between China’s nationalist forces and the Communists, the strategy was “a brilliant success.” Here’s hoping that President Biden doesn’t ignore the new hints that China is following the same course today – and that Beijing isn’t interested in conducting a “responsible competition.” It’s interested in winning.

Im-Politic: So Fauci Finally Gets It on Lockdowns?

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Anthony S. Fauci, Biden administration, CCP Virus, China, coronavirus, COVID 19, facemasks, Im-Politic, lockdowns, social distancing, Wuhan virus, Xi JInPing, Zero Covid

Retiring U.S. chief infectious disease specialist Dr. Anthony S. Fauci told us over the weekend that he’s just shocked by what he calls China’s pointlessly “draconian” Zero Covid policy to defeat the CCP Virus. And the Biden administration has been critical, too. To which the only reasonable response is, “Seriously?”

Not that Zero Covid hasn’t been an epic fail by Chinese dictator Xi Jinping. But the criticism from Fauci and the Biden presidency sure looks like the pot calling the kettle black.

If you’re skeptical, here’s Fauci’s response to a question noting perceptively that “you’re seeing things that we saw in this country when people didn’t like how Covid response — What is going on in China, and why do they seem to be in a worse place than anyone else in the world?”

“[T]heir approach has been very, very severe and rather draconian in the kinds of shutdowns without a seeming purpose. I mean, if you’re having a situation, if you can recall, you know, almost three years ago when we were having our hospitals overrun, you remember the situation in New York City, you had to do something immediately to shut down that flow. So remember we were talking about flattening the curve and the social distancing and restrictions and shutdown, which was never really complete, is done for a temporary period of time for the purpose of regrouping, getting more personal protective equipment, getting people vaccinated. It seems that in China it was just a very, very strict extraordinary lockdown where you lock people in the house but without any seemingly endgame to it.”

No one can reasonably criticize any public official for urging extreme and sweeping anti-virus measures during the pandemic’s early days – before its nature and especially its highly granular lethality (overwhelmingly concentrated in seniors and others with major health problems) were understood. For it could have been like the Black Death.

But of course Fauci, the rest of the official public health establishment, and left-of-center leaders like Biden, were championing these policies long after these patterns became known.

And more important, when it comes to comparing U.S. policies during his tenure with Chinese policies today, Fauci’s claim that he was only urging “social distancing and restrictions and shutdown” essentially until vaccination was widespread ignores his stated belief in March, 2020 that “It will take at least a year to a year in a half to have a vaccine we can use.” And of course getting enough arms jabbed to turn the CCP Virus tide was always going to take months more even if the rollout went perfectly (which was far from the case). And what if the vaccines were major flops?

So Fauci himself clearly felt that pretty draconian policies – despite their devastating impact on the economy, on education, and on Americans’ mental health – would be needed over a very long haul. Therefore, when it counted, his differences with the approach taken recently by China (which lacks vaccines even as effective as America’s imperfect – especially against transmission – versions) was one of degree, not of kind.

Just as bad, as with Xi Jinping, this conviction of Fauci’s didn’t seem to be greatly affected by the proven potential of natural immunity per se to help end the pandemic (especially as variants, predictably, became more infectious but less lethal), or by the emerging evidence of sharp limits (to put it diplomatically) to the utility of social distancing in and of itself, and masking – and even of widespread lockdowns themselves.

Fauci’s declaration that “a prolonged lockdown without any seeming purpose or end game to it…really doesn’t make public health sense” comes way too late to impact America’s strategy during the pandemic era.  But hopefully it will dissuade both politicians and the public health establishment from repeating these grave mistakes when the next pandemic – inevitably – comes the nation’s way.

Following Up: Podcast Now On-Line of National Radio Interview on U.S.-China Economic & Tech Relations

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Biden administration, CBS Eye on the World with John Batchelor, China, export controls, Following Up, Gordon G. Chang, microchips, nationalsecurity, Party Congress, tech, Trade, Xi JInPing

I’m pleased to announce that the podcast of my interview last night on the nationally syndicated “CBS Eye on the World” with John Batchelor is now on-line.

Click here for a timely discussion, with co-host Gordon G. Chang, of how the results of the just-concluded Chinese Communist Party’s annual congress will impact U.S. trade with the People’s Republic, and whether the Biden administration’s major new measures will adequately slow China’s drive to achieve global technology leadership..

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Making News: Back on National Radio Tonight and Another Award!

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business, CBS Eye on the World with John Batchelor, China, Chinese Communist Party, economics, Feedspot.com, Gordon G. Chang, Making News, Party Congress, recession, Xi JInPing

I’m pleased to announce that I’m scheduled to return tonight to the nationally syndicated “CBS Eye on the World with John Batchelor” to discuss China’s future and the outlook for Sino-America relations. 

At links like this, you can listen live to a discussion with me, John, and co-host Gordon G. Chang that will be especially timely given the conclusion of China’s latest Communist Party Congress and dictator Xi Jinping’s doubling down on his repression at home and expansionism abroad.

I don’t yet know exactly what time the segment will air, but John is on between 9 PM and midnight EST, and the entire show is always compelling. If you can’t tune in, as usual, I’ll post a link to the podcast as soon as one’s available.

In addition, RealityChek has just copped a second award from the widely followed Feedspot.com website! On the heels of being named one of its “45 Best Chemical Weapon Blogs and Websites,” RealityChek has been ranked as one of its “60 Best Recession Blogs and Websites” (coming in 29^th, and ahead of other economics and business news sources like the PBS NewsHour, Benzinga.com, and Quartz.com).

The criteria used buy Feedspot? “[T]raffic, social media followers, domain authority & freshness.”

And of course keep on checking in with RealityChek for news of upcoming media appearances and other developments.

Following Up: Podcast Now On-Line of National Radio Interview on the Biden-Xi Jinping Phone Call

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Asia-Pacific, Biden, CBS Eye on the World with John Batchelor, China, Following Up, Gordon Chang, Indo-Pacific, innovation, national security, semiconductors, Taiwan, tech, Xi JInPing

I’m pleased to announce that the podcast is now on-line of my interview last night on the nationally syndicated “CBS Eye on the World with John Batchelor.”

Click here for a timely discussion, with co-host Gordon G. Chang, of what President Biden should have said today in his telephone conversation with Chinese dictator Xi Jinping, and whether or not the United States can avoid going to war with the People’s Republic to keep Taiwan’s world-leading semiconductor manufacturing prowess out of Beijing’s hands.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Making News: Back on National Radio Tonight on the Biden-Xi Jinping Phone Summit

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Biden, CBS Eye on the World with John Batchelor, China, Gordon G. Chang, Making News, semiconductors, Taiwan, Xi JInPing

I’m pleased to announce that I’m scheduled to return tonight to “CBS Eye on the World with John Batchelor.” I’m told that the segment we just finished taping will probably air at either 10:15 PM or 11:15 PM EST. But you’ll surely want to listen to the entire program, which is on weeknights between 10 PM and midnight EST for two reasons: first, because the content is always compelling;  and second, because this particular conversation (which will also include co-host Gordon G. Chang) deals with President Biden’s upcoming telephone call with Chinese dictator Xi Jinping just when a Taiwan-related crisis seems to be brewing.

You can listen live at links like this one, and as always, if you can’t, I’ll post a link to the podcast as soon as it’s available.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Our So-Called Foreign Policy: What Biden Should Say to China on Taiwan on his Call with Xi

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Biden, China, Indo-Pacific, Our So-Called Foreign Policy, semiconductors, Shanghai Communique, South China Sea, Taiwan, Taiwan Relations Act, Taiwan Semiconductor Manufacturing Company, Xi JInPing

President Biden says he’s likely to talk to Chinese dictator Xi Jinping by phone within a week, and no doubt there’ll be no shortage of advice from both inside and outside his administration about what he should say. Here’s my two cents for the text of a private letter that Mr. Biden should send to Xi in advance of the call. Its purpose would be to prepare Beijing for his agenda:

“Dear Mr. President,

First of all, thank you again for your wishes for my speedy and complete recovery from Covid. I’m glad to report that I’m feeling just fine.

“Second, if we are indeed to converse person-to-person soon, I need to make something clear. If your plan for our call is simply to repeat the kinds of talking points that keep coming out of Beijing, then we might as well call the telephone call off. That kind of approach has gotten us nowhere at best to date, and will get us nowhere now and in the future.

“My main focus, and the reason I wanted to speak with you directly, concerns our differences regarding Taiwan. I believe there’s a clearcut way for us to avoid a war over this issue that would serve no one’s interest, and indeed threaten disaster for all parties concerned.

“My administration has said before that it remains U.S. policy to abide by the Shanghai Communique approved by our two governments in 1972, which states that ‘The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain that there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position.’

“As a result, I can tell you categorically that the United States opposes Taiwan declaring independence, and will continue to do so. The United States has supported increased Taiwanese participation in international organizations and other fora strictly for practical reasons – mainly, the island is undoubtedly a major regional and global economic actor. In fact, that’s of course why the People’s Republic has permitted trade and investment ties between your two economies to grow so robustly.

“For as long as I’m President, the United States will continue to pursue this approach. I also reserve the right, claimed and acted upon by all of my predecessors since Congress’ passage of the Taiwan Relations Act in 1979, and consistent with the Shanghai Communique’s reference to America’s support for ‘a peaceful settlement of the Taiwan question by the Chinese themselves’ to ‘provide Taiwan with arms of a defensive character’ and ‘to maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.’

“I also want to emphasize that preserving and enhancing peace and stability in the Taiwan neighborhood has recently become an objective of paramount importance to the United States because of the island’s world leadership in semiconductor manufacturing technology. That is, my country’s commitment to Taiwan now stems from concrete, specific considerations that are absolutely vital to U.S. national security, and I am determined that this prowess will not become available to the People’s Republic.

“This conclusion should come as no surprise to you. For many years, including under my administration, U.S. export control policy has aimed to deny China the ability to make the world’s most advanced microchips. So I’m certainly not going to stand by and see the full suite of advanced semiconductor production technologies, materials, and equipment possessed by Taiwan Semiconductor Manufacturing Company in particular fall into your country’s hands.

“At the same time, I recognize Taiwan’s special importance to the population of the People’s Republic and to your government. So in the interests of peace and stability, I am willing to declare the United States’ opposition to Taiwanese independence in public, along with its continued opposition to Taiwan joining organizations and arrangements in which its voice lacks any special importance – such as the United Nations. I am also willing to make these points forcefully in private to Taiwan’s leaders.

“In addition, I will privately pressure U.S. legislators not to visit the island. And although I lack the authority to ban those trips, I will publicly announce that executive branch visits to Taiwan will be limited to those needed to address specific issues in bilateral commercial relations and other non-political spheres. Further, I will publicly urge other countries not to take any actions that could encourage Taiwan’s leaders to try to change the political status quo unilaterally. Finally, for now, I will reduce the number of annual U.S. Navy vessel trips through the Taiwan Strait in half, back to 2017 and 2018 levels as well.

“But I will not take any of these new steps unless China immediately reduces flights by its military aircraft over Taiwan’s air defense identification zone back below mid-2020 levels, and halts all effots to interfere with those U.S. Navy transits of the Taiwan Straits.

“Moreover, if China does not agree to this quid pro quo, which will unmistakably shrink the odds of an accidental outbreak of hostilities that I trust you would like to avoid as much as I, I will have no choice but to respond to China’s overflights and other provocations with ever more supplies of increasingly advanced defensive weapons to Taiwan. I will also see to it that any other regional countries alarmed by China’s more aggressive actions toward Taiwan receive all the conventional arms they believe they need to ensure their own security. Further, I will encourage these countries to increase their military cooperation programs with the United States and each other. Finally, I will make sure that the United States military’s regional presence will be sufficient to contribute decisively to Taiwan’s successful defense should I decide such action is needed.

“In other words, Mr. President, I am presenting you with a choice. You can either lower the military temperature in Taiwan’s vicinity, and benefit both from the considerable help I can provide in damping down Taiwan’s independence impulses, and from the maintenance of peace and stability in the Indo-Pacific region that has been so crucial to your own country’s impressive economic development and rise to great power status. Or you can keep increasing tensions, and find yourself not only faced with a more militarily powerful Taiwan, but increasingly encircled by much warier but better armed neighbors as well.

“Incidentally, China faces much the same choice due to its recent expansive territorial claims and follow-up actions in the South China Sea more generally. But because the Taiwan situation is currently more dangerous now, my intention is to defuse that situation first if possible.

“As I stated at the outset, if you plan to respond to these positions with longstanding talking points, then our converation will serve no purpose. If, however, you’re willing to respond substantively and constructively, I’ll be all ears, as a popular English expression goes. I look forward to your reply. And please accept my sincere hope that you and those near and dear can stay Covid-free.

Sincerely,

Joe Biden

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.