Hong Kong, as the freest economy in the world, is an ideal place for global capital to enter the mainland. With the further opening of China’s capital account, Shanghai could one day outshine Hong Kong, but only if property rights are protected under the rule of law understood as a meta-legal principle whereby all individuals are guided by what F. A Hayek called “rules of just conduct.”
In all of our excitement about what this might mean for the finance industry, let us keep in mind that there are as many good reasons for staying out of Chinese investments right now than there are for getting in.
Professor Seiichiro Takagi of the Japan Institute of International Affairs (JIAA) explains how Xi Jinping’s “New Asian Security Concept,” introduced by the Chinese president in May, is designed to place China in the dominant position in Asia, not only from a security standpint, but on political and economic bases as well.
Reading between the lines (Japanese scholars are not always as blunt as they could be), Takagi is suggesting that the NASC is little more than a Chinese version of the Warsaw Pact, brought to Asia. It suggests, therefore, that China is attempting to stake out a share of the world over which it exercises dominance, if not control.
As a Japanese scholar, Takagi is hardly a disinterested third party: Japan and China have been squaring off with increasing regularity, and Tokyo is seen by many in Beijing as America’s running dog. At the same time, Takagi’s point is worth noting, and it invites closer scrutiny of exactly what Xi Jinping is trying to accmplish with his NASC.
“Re-Think Chinese Policy Toward DPRK“
Bonnie S. Glaser
Issue 7, February 2013
In this short paper, Bonnie Glaser at the CSIS presents a cogent, well-framed case for China to cut its assistance to North Korea as a means of getting the DPRK to stop its rogue behavior. As much sense as the paper will make on Capitol Hill, it is unlikely to change China’s stance. This is because the paper does not consider the internal logic that drives Beijing’s calculus on North Korea.
While Beijing’s “dog” on the Korean peninsula enjoys biting the hand that feeds it, the dog still guards China’s back door. It remains a buffer designed to ensure that neither the US nor South Korea have forces crouched on the Yalu frontier. Its rogue behavior diverts the heat of international opprobrium as China begins to assert its own strategic posture and build its military. The loyalty Beijing continues to extend to the DPRK is a demonstration to all other allies and prospective allies that Beijing is a reliable friend, even when the going gets tough. Finally, Beijing would hate to have somebody else – Russia, for example – step in and become Pyongyang’s patron.
So Beijing cutting off Pyongyang is probably not in the cards. What is likely to be in the cards, however, is a careful effort by China to prove the the mercurial Kim Family Regime that there are wiser courses of action to pursue, and that China continues to be its best possible benefactor. Whether that will yield any worthwhile results is anyone’s guess.
“China’s Strategic Capabilities and Intent,” Rebeccah Heinrichs, Issue Brief, No. 4111, The Heritage Foundation, December 18, 2013. Heinrichs summarizes the changes taking place in China’s nuclear defense posture, noting that rather than engage in bursts of effort and spending, China has been slowly and steadily improving its offensive nuclear capabilities for years now. She also lays out a policy program that responds to these developments and reminds us that the US has ignored its own strategic forces for far too long.
Toward a Safer and More Secure Cyberspace
Seymour E. Goodman and Herbert S. Lin, Editors,
Committee on Improving Cybersecurity Research in the United States
National Research Council
On a day during which many of us are rushing about trying to secure our servers and our identities from the ravages of Heartbleed, we cannot help but wonder how the issue of cybersecurity can be addressed at a macro level.
The National Academies Press has just sent out a reminder that in 2007 it published Seymour Goodman, Herbert Lin’s and the National Research Council’s superb Toward a Safer and More Secure Cyberspace. The book, available free to download if you register, seems only a little dated: most of the fundamental concerns it identifies and addresses are more relevant now than they were seven years ago.
All of this is a bleak reminder that there are a lot of folks out there who are in a position to say “I told you so.” No doubt a few of them are probably having the busiest week of their lives.
Recent revelations from the Snowden-Industrial Complex (SIC) appear to offer evidence that the U.S. National Security Agency hacked into one or more corporate computer systems at Chinese telephone giant Huawei. This was done, ostensibly, to search for evidence to support the suspicion that Huawei was operating in cahoots with the Chinese government to the detriment of US interests.
All of these revelations are fascinating, but there is an elephant in the room that we’re missing amid the outrage. What, if anything, did the NSA find in Huawei’s computers? Was the US, in retrospect, looking for a chimera, or did they find evidence of the complicity for which they were searching?
The fact that the latter has not been addressed suggests that the SIC is being selective about its disclosures, either because of an implicit agenda, or, perhaps, because Snowden has new masters.