Why the PLA is Playing Chicken off of Hainan

For those looking for a reason that the People’s Liberation Army (PLA) is playing such an aggressive game of cat-and-mouse with US patrol planes in the South China Sea, Bloomberg’s Ting Shi provides some clarity in “China Seeks to Protect South China Sea Submarine Gateway.

 

China and the Limits of History

Some things we used to know about china’s past and present but, now, not so much” 
Alice Lyman Miller
Proceedings of the USC US-China Institute Symposium, “History and China’s Foreign Relations: The Achievements and Contradictions of American Scholarship”,
Feb. 16-17, 2008

Stanford’s Alice Miller is one of those China scholars who prefers not to mince words. Whether it was her sixteen years with the CIA or the cumulative effect of four decades studying China, she is direct and still unfailingly scholarly in her assessments and, as a result is, a joy to read.

Her paper at a USC symposium above is an excellent example. There is a school of China scholarship that attempts to parse Beijing’s politics and foreign policy through a prism of China’s imperial past. To those scholars, the CCP is just another dynasty in China dynastic cycle, its current leaders just emperors in new clothes, and China wants to turn the rest of the world into tributary powers.  As a history buff with late-life aspirations to historianship, these parallels are appealing to me, and they are clearly appealing to others, else Miller would not feel the need to debunk the approach.

And debunk she does. Offering ample examples from current scholarship and public discourse, she makes a convincing case that while the history has some general value as background in understanding Chinese strategic thinking, past behavior is no template for current or future action.

A must-read for any China-watcher, it surprises me that this paper has not received more attention, but perhaps it shouldn’t: as a longtime purveyor of the “China is more nuanced than that” approach, I know that people are not looking for nuance: they’re looking for easy. Miller makes it clear that this sort of intellectual laziness is a hazard to be avoided.

History, however, is not the bunk that Henry Ford thought. I side with Cicero: ignorance of history is the hallmark of intellectual immaturity. Miller is correct in saying that we should not rely on history too much. It is important to caution that we ignore it at our peril.

Mincing Words on Chinese FDI

China Invests (Somewhat) More in the World
Derek M. Scissors
American Enterprise Institute 
January 2014

In a deep-dive based on the data produced by the American Enterprise Institute and Heritage Foundation in their China Global Investment Tracker, Derek Scissors shows us how large China’s foreign direct investment effort has become and how fast it is growing. By the end of 2015, if all things go as expected, China will surpass $100 billion per year in funds invested overseas.

The numbers are large, but when measured against other capital flows in the past, not yet at a level which should concern average Americans. Indeed, there are significant benefits from such investments. Nonetheless, Scissors suggests, we should not assume all Chinese FDI is a good thing. He joins a growing chorus of voids suggesting that national security, the growing role of China’s state-owned enterprises, and genuine reciprocity should guide policymaker approaches to Chinese FDI as much as economic benefit.

Scissors does a superb job at laying out the key issues, and I especially liked his nuanced approach to SOEs. Disappointingly, he stops short of suggesting a framework that would allow us to distinguish Chinese investments that should be welcomed, and those that should be rejected. Reading between the lines (and in keeping with AEI’s economic approach), Scissors is more concerned about debating the laissez-faire end of the business community who would prefer that government simply got out of the business of regulating Chinese foreign investment.

A worthy roundup of the issue.

India Looks at Xi

“Taking Stock of Chinese Leader Xi Jinping’s One Year Rule,” R.S. Kalha, IDSA Comment, December 20, 2013. Kalha, of the Institute of Defense Studies and Analysis in India, takes a look at the first year of Xi Jinping’s rule from a security policy perspective. His takeaway: by focusing on Japan, Xi picked the right nemesis, managing to demonstrate the real limits to the US commitment to the security of its allies in the region. More adventurism can be expected as a result.

To Fix China, Fix Her Cities

“The Urbanization Solution”
Lu Mai
Government Designed for New Times
McKinsey & Co.

2012

China is on the back end of the largest and most rapid urbanization in the history of mankind. In the past 30 years, the nation’s population has gone from being 80% rural to over 60% urban. Lu Mai, Secretary General of the China Development Research Foundation and an expert on rural affairs, pens a forthright essay saying that China should stay the course: the more people you move to the cities, the more manageable China’s problems will be.

At the same time, Lu doesn’t want forced relocations. The market is the best mechanism to drive the process, he says. The appropriate role for the government is to serve as an enabler, making the process of integration into the cities as smooth as possible, and ensuring that migrants are provided the necessary services and statuses to make their shift from the countryside as smooth as possible.

Lu is wise enough not to call for the outright elimination of China’s hukou household registration system. Doing so would touch politically sensitive nerves, come across as slightly wild-eyed, and anyway would miss the point. Lu’s focus is on outcomes: get people into the cities, and anticipate and address the challenges this is going to create for municipal governments and the migrants themselves.

A quick read, but a good one.

Is China a Revisionist Power?

“Understanding Chinese Revisionism in International Affairs”
Matthew Stinson
April 2, 2014

Whenever I start to think I know something about international relations (my major in school three decades ago, and my predilection ever since), I need only read something by Matthew Stinson to send me, humbled and chastened, back to the library.

Stinson, who is on the faculty at Tianjin Polytechnic University in China, is not a paid political scientist, but he writes like one, albeit rather more clearly than most. It pains me to note that much of his output is in the form of Facebook posts, a fine way to engage his friends, but not so much to give him the profile he deserves.

The most recent entry in his blog Like Cooking a Small Fish is a happy exception. In an wide-ranging and highly erudite article, Stinson explains in detail how China is changing the rules of international relations simply by refusing to play by those established by the U.S. and European powers over the last two centuries. He concludes:

In 1996, the popular Chinese nationalist book China Can Say No advanced the concept that China should no longer follow America’s lead in world affairs. Roughly twenty years later, we may be reaching a point where, thanks to Chinese power, authoritarian regimes of the Global South can also “say no” to the West and pay no penalties for it.

Thought-provoking, and for those of us who place value in the international system as it currently stands. What Stinson suggests that we face is not a future of bad actors, but one in which we will have two systems operating by separate rulesets operating side-by-side. It is the perfect recipe for global conflict.

Towards a New Model of Major Power Relations

Towards a New Model of Major Power Relations
John Podesta, C.H. Tung, Sandy Berger, Wang Jisi
CHINA US Focus
Center for American Progress

February 2014

Growing concern about the state of the US-China relationship is bringing the pundits out in force. Former Clinton Administration officials John Podesta and Sandy Berger got together with former Hong Kong Chief Executive C.H. Tung and Peking University’s Wang Jisi to try to figure out a new framework for the relationship.

In Towards a New Model of Major Power Relations, published by the Center for American Progress, they have produced a list of recommendations for US and Chinese diplomats to follow in an effort to stabilize the relationship.

The report makes for thoughtful reading, and offers hope for those who despair of the current state of play between the two countries. It will no doubt attract its share of criticism.

The most obvious problem is that the report gives but passing acknowledgement to the importance of domestic politics in both countries in setting the tone of the bi-lateral relationship. This is unrealistic What we need is a framework that is not based on domestic politics the way we wish they would be and that treats them as an afterthought, but that begins with our respective domestic challenges and mutual misperceptions and grows from there.

The second problem is that there seems to be an implicit assumption in the document that China actually wants a positive relationship with the US, and vice-versa. That remains unclear. China appears to be moving beyond the era of the “Peaceful Rise” to what I wild call “Assertive Breakout.” It is based in part on a perception of a declining US that recent US actions would appear to support.

As such, these recommendations are premature. Until both sides signal that they are really ready to sit down, we need a path to get to where Podesta, Tung, Berger, and Wang seem to think we are.

China and the Money Diversion

China After Tian’anmen
Perry Link
The New York Review of Books
31 March 2014

Those among us who watch these sorts of things, but who don’t talk about them, share a quiet understanding that 2014 is one of those little anniversary years in China.

The fourth of May marks the 95th anniversary of the May Fourth Movement, a 1919 grassroots nationalist campaign protesting the Chinese government’s handling of the Versailles treaty, a key event in the history of the Chinese revolution. The first of October marks the 65th anniversary of the founding of the People’s Republic of China; and the fourth of June marks the 25th anniversary of the incident in Beijing’s main public square in 1989.

It is perhaps this latter milestone that inspired Rowena He to pen her new Tiananmen Exilesand that inspired Perry Link to write the foreword to that book. The foreword is excerpted in Link’s NYRB essay.

In his article, Link takes us through the background of China’s modern social contract: the shock of the June 4th incident was followed by a concerted effort on the part of the Party to shift the nation’s focus away from politics and toward prosperity. Commerce, opportunity, rising living standards and the social stability that made all of them possible absorbed the attention of the nation for the next two decades. The quid pro quo, of course, was that the people would not ask hard questions of their leaders.

For a generation, this approach has yielded great success as China’s economy continued to rise on the back of consistent and high economic growth. But the number of people enjoying consistently rising standards of living is falling, and the nation faces simultaneous crises in both the environment and ethics. As Link notes:

At a deeper level, though, Chinese people (like any) do not feel secure in a system built on lies. The wealthy send their money abroad—and their children, too, for education. In 2013 several surveys and reports showed sharp increases in the plans of whole families, especially among the wealthy, to emigrate, and there is no reason to think that poorer people would not follow this trend if they had the means.

The nation’s most prosperous are turning into a quiet flood of refugees to societies with rule of law, strong ethical systems, and who place limits on opportunity in favor of a better lifestyle.

Link summarizes a narrative familiar to many of us. It does more than simply justify the current silent exodus: it sets the stage for the next act in China’s economic and political evolution.

China is Not Ready for a Short, Sharp War

“Is China Preparing for a “Short, Sharp War” Against Japan?” Brookings Institution. Jonathan Pollack and Dennis Blasko name the elephant in the room in Asia. Their call: the alarm bells sounding at the US Pacific Fleet are premature because China lacks either the doctrine or preparedness to conduct such an operation. The conclusion is debatable, but it is interesting to note that the issue in debate is neither motive nor opportunity, but capability.

Op/Ed: Our Ally in Tokyo

“Stand With Our Ally in Tokyo”
Rep. Randy Forbes

The Diplomat
18 February 2014

Representative J. Randy Forbes, (R-VA), writes this editorial in The Diplomat urging us to stand behind our ally in Tokyo. He makes some good points.

But this is a piece of political advocacy, not a balanced treatise. Forbes needs to be both the political leader and the strong diplomat. While we should stand behind all of our alliances, we should also make clear to our allies that there are conditions.

If Japan provokes China, we will not back them. If Japan fails to negotiate settlements with China in good faith, we will not back them.

And if Japan seeks our backing, they must publicly own up to, and apologize to the Chinese people for the atrocities committed against them in the name of the Chrysanthemum Throne prior to 1945. Failure to do any of that undermines our legitimacy in the eyes of not just the people of China, but of the people in Asia as a whole.

There are no white hats in Northeast Asia. We cannot ignore China’s creeping hegemony, but we cannot ignore the slow-motion effort of Japan’s militant right wing to rewrite history, either. Before we decide to throw our full weight behind one side or the other in this conflict, let us make certain we are acting in accordance with all of our values, not just one.

Understanding China’s NSC

Decoding China’s New “National Security Commission”
Joel Wuthnow, Ph.D.
CNA

November 27, 2013

In the wake of the meetings of the Congress of the Chinese Communist Party in November, the government announced the creation of a new body to unify and oversee China’s national security apparatus.

At first blush, the body looks a lot like the US National Security Council. Even though details are scant, dissection of the announcement by CNA’s China specialists suggest that there are subtle yet important differences, and some real bureaucratic challenges. CNA’s Joel Wuthnow pulls together those opinions to begin to add some clarity to the enigma that is China’s NSC.

This is a great read, if for no other reason than to get a glimpse at the birth of a body that will become an important force in global politics going forward.

On November 12, 2013, the People’s Republic of China (PRC) announced the creation of a new “National Security Commission.” Although few details were offered, PRC official sources and commentary by senior PRC security experts provide insight into its purpose and expected achievements. – See more at: http://www.cna.org/research/2013/decoding-chinas-new-national-security-commission#sthash.3D22PgnL.dpuf
On November 12, 2013, the People’s Republic of China (PRC) announced the creation of a new “National Security Commission.” Although few details were offered, PRC official sources and commentary by senior PRC security experts provide insight into its purpose and expected achievements. – See more at: http://www.cna.org/research/2013/decoding-chinas-new-national-security-commission#sthash.3D22PgnL.dpuf

Pharma’s Next Billion Patients

bcg.perspectives – Pharma’s Next-Billion Patients

BCG offers a fascinating look at what is at stake for big pharma in China. For that reason alone it is worth reading if you have even the least interest in healthcare in the PRC.

The report’s omissions are glaring, however. Perhaps because it would be impolitic to mention, the report avoids the really tricky questions around pharma in China today. One glaring example: it fails to mention the industry’s long-standing dependence on unsavory practices to get drugs prescribed, and how such behavior places the entire pharmaceuticals industry at risk of heavy-handed government intervention.

As the GSK case proved last summer, the growing focus on healthcare at the highest levels in China’s policy-making apparatus means that the pharma business needs to clean up its act, lest it become a victim of China’s healthcare boom rather than a beneficiary.

BCG’s researchers and consultants almost certainly knew this was a danger long before the GSK case came to light. That they did not bring this out in the report – that they pulled their punches – reduces what deserves to be an industry primer to the level of little more than marketing collateral.

BCG’s report is an essential piece in understanding the pharmaceutical business in China today. It should be read with an ample dip into the news that has come out since its publication.

Figuring Out Chinese Travelers

Winning the Next Billion Asian Travelers—Starting with China
Frank Budde, et al.
bcg.perspectives
December 5, 2013

We are not shy to criticize the conclusions of the major consulting houses when they get it wrong on China, so it is only fair that when we catch them doing something right, we say as much. Such is the case with the Boston Consulting Group’s report on China’s outbound travelers.

The report gets it right in some important areas, most notably on the importance of segmenting the market. Not all Chinese tourists are created equal, and those segments will evolve as more tourists spend more time overseas. Mr. Budde and his fellows then go one better: they offer nine strategies for companies to follow when chasing the Chinese consumer.

As with all general prescriptions, it is easy to quibble on particulars, but in our experience the BCG report provides a great starting point for building 1-3 year strategies for addresing this evolving – and lucrative – market.

China’s Assertiveness: Seven Years in the Making (At least)

Imperialism with Chinese Characteristics? Reading and Re-Reading China’s 2006 Defense White Paper
Mike Metcalf
NI Press
September 2011

Flag ~ China - People's Liberation Army

Flag ~ China – People’s Liberation Army (Photo credit: e r j k p r u n c z y k)

Mike Metcalf, a member of the faculty at the National Intelligence University in the US, has spent a lot of time parsing China’s seminal 2006 Defense White Paper. China has issued such signalling documents in the past. What distinguishes this one, according to Metcalf, is that it points Beijing toward a national security posture that goes beyond territorial defense.

In the publication, Metcalf provides his own overview of the white paper, then offers two translations of the analysis of the paper by the man considered its pricipal drafter, Dr. Chen Zhou of the PLA Academy of Military Sciences, as well as Metcalf’s own analyses of Dr. Chen’s point of view.

It is a rare treat to have an informed and scholarly discussion on Chinese source material made available in a format the rest of us can digest. All the more so given that the import of this book is to prove that China’s assertive nationalism is not a product of Xi Jinping’s making, but something that has been in the works for nearly a decade. As such, it is hard to expect this direction to be fleeting: we are looking at what is likely to be a lasting trend in Chinese international relations.

Prospects for the Shanghai FTZ

The Role of Economic Development Zones in National Development Strategies: The Case of China by Wang Xiao is a doctoral dissertation submitted to the Pardee Rand Graduate School. The author takes a methodical, data-driven approach to determine the extent to which economic development zones actually helped China’s development, when they did so, when they were less helpful, and what makes for more effective zones. The conclusions offer a hint as to the prospects for Shanghai’s much-ballyhooed Free Trade Zone to help in China’s search for an economic second wind.

For the PLA, Has War Already Begun?

“China’s ‘Three Warfares’ and India”
Abhijit Singh
Journal of Defence Studies
October-December 2013
pp. 27-46

Cymraeg: Sun Tzu. mwl: Sun Tzu. Português: Sun...

Sun Tzu (Photo credit: Wikipedia)

The author, who is a research fellow at India’s Institute for Defence Studies and Analyses, offers up a highly readable paper with a fascinating proposition: China is already at war with India.

Singh calls out what he calls China’s “Three Warfares” (3Ws) strategy, by which China wages war against an adversary by influencing public opinion, conducting psychological operations, and laying the legal groundwork to support its territorial claims. The PLA, through “work regulations” issued in 2010, is now focusing that effort on India.

It does not demand much effort to see that China is pursuing the same approach in the South China Sea and the East China Sea. What is disturbing is that this effort is not directed by the Ministry of Foreign Affairs, but by the PLA. This is not diplomacy as far as the Party is concerned: this is asymmetrical warfare.

The paper is a fascinating, short, and essential read for those looking to understand China’s near-abroad foreign policy, and who inside of Beijing’s guarded compounds is actually running the show.

The PLA’s Political War

The People’s Liberation Army General Political Department: Political Warfare with Chinese Characteristics, by Mark Stokes and Russell Hsiao, offers look at how the PLA has updated its doctrine of political warfare to target not just Taiwan, but countries all around the world. The book also examines how the PLA’s General Political Department/Liaison Department engages in political warfare, and why the GPD/LD should not be lumped together with China’s intelligence apparatus.

China’s Cloud

We have made the point often and publicly that China wants to create its own, separate cloud for both commercial and security reasons. The United States – China Economic and Security Review Commission gets that, and commissioned Defense Group, Inc. to study why China is creating its own cloud and how it is doing it. The result is Red Cloud Rising: Cloud Computing in China. Much to my personal pleasure, the study vindicates my point of view, but it goes further, assessing the impacts to US security and the economy, and making recommendations as to what th US needs to do about it. As with many such efforts, it is not a casual read, but a scan of the text offers interesting nuggets aplenty.

Not Enough for the Navy

Retired Naval War College professor Marshall Hoyler reviews Aaron Friedberg‘s A Contest for Supremacy; China America, and the Struggle for Supremacy in Asia, seeing the work as an extended case to support long-range procurement of expensive Navy and Air Force weapons programs. Hoyler, a navalist, acknowledges that Friedberg makes some good points. However, he suggests that if this is all the technical services have to offer for an argument to defund the ground-pounders in favor of jets and ships, then both services are in trouble.

Lies and Damned Lies

In “How to Make China More Honest,The Heritage Foundation‘s Derek Scissors contends that Chinese statistics are little more than politically-motiviated lies. He suggests that this means that the “Chinese miracle” could be part of the grand fib. More to the point, though, he says that the only way to keep China honest is to collect enough data about China to give lie to its own prevarications, and use that data to undermine China’s propaganda. The challenge, of course, is how to collect that data if China really doesn’t want you to do so.

How Deep are China’s Investments in the Carribbean?

English: Map of the Caribbean by the CIA World...

Map of the Caribbean from the CIA World Factbook (Photo credit: Wikipedia)

China’s Rising Investment Profile in the Caribbean:
Richard L. Bernal
Inter American Dialogue Economics Brief
October 2013

While we hear a lot about China’s focus on Latin America, especially Peru, Chile, Venezuela, and Cuba, you don’t read quite as much about China’s efforts in the Caribbean Basin at large. that is starting to change.

In this paper, Richard Bernal, former Jamaican ambassador to the United States and a permanent representative to the Organization of American States, is largely symathetic to China. He notes that investing in small island republics is probably not as attractive to China as plays on the Latin American Mainland, and statistics back him up. Chinese mining companies have already pledged over $7 billion in direct investment to Per, but total investment in the 13 nations in the Caribbean, including Cuba, has been a comparatively paltry $2.6 billion since 2003.

Bernal admonishes regional leaders that they must work harder to make their countries more attractive to Chinese investment. He’s right, of course, but one wonders whether state leaders in the Caribbean all share Bernal’s implicit optimism about the upside of Chinese FDI.

Hardball on the Water

“How the U.S. Should Respond to the Chinese Naval Challenge,” Dean Cheng’s policy brief for the Heritage Foundation, offers few original policy recommendations, (“fully fund the Navy’s shipbuilding program, invest in strong R&D, strengthen ties with allies, and uninvite China to RIMPAC“) and does not even begin to address the fiscal or diplomatic impacts of the ideas it offers. It does, however, present a clear case for playing a game in the region that the Chinese will understand – and respect. The soft approach won’t work with China, Cheng asserts. Time to play hardball. Tell that to the crew of the USS Cowpens – they’ll say that’s exactly what they’re doing.

Africa Three-Way

A Trilateral Dialogue on the United States, Africa and China is the proceedings of a private conference organized in Beijing by the Africa Growth Initiative and the John L. Thornton China Center at Brookings, with the Institute for Statistical, Social and Economic Research at the University of Ghana and the Chinese Academy of Social Sciences. The question was whether there was room for cooperation between the three sides to address Africa’s challenges. The conference identified common interests. Will that be enough to drive cooperation?