Last week, Daniel Russel, Assistant Secretary of State for East Asian and Pacific Affairs, came to speak at the Stanford event, “America’s Pacific Future Is Happening Now,” on the administration’s rebalance to Asia policy.
Mr. Russel began the talk by saying that the relationship between the U.S. and the Asia Pacific “has changed in a big way” in the last seven years. President Obama is determined to use diplomacy to advance American interests in the region.
Russel discussed four aspects of the “rebalance” strategy. First, to increase trade and investments in Asia Pacific. The world’s economic gravity has shifted significantly to the Asia Pacific. The region represents nearly half of the world’s population with a burgeoning middle class. America recognizes that its future is critically linked to that part of the world.
In a recent Commonwealth Club event in Silicon Valley, two prominent China experts, Martin Jacques, author of When China Rules the World, and Susan Shirk, author of China: Fragile Superpower, had a fascinating exchange of opinions about China’s relationship with the West.
Photo Credit: Frank Jang of the Committee 100.
The premise of the discussion was that the United Kingdom is the U.S.’s closest ally, but it has adopted a very different policy toward China. As I wrote here, the British now call themselves “China’s best partner in the West.” Last March, the U.K. decided to join China-led Asian Infrastructure Investment Bank (AIIB) despite the strong opposition from the U.S. When the Chinese President Xi Jinping visited the U.K. in November, the British government showered him with an extraordinary pageantry – a startling contrast to his treatment from the U.S. where President Obama threatened to sanction China.
“This is a symptom of the rise of China,” Mr. Jacques said. “It represents a shift in [global] geopolitics.”
The New York Times has a fascinating article about the birth of the China-led Asia Infrastructure Investment Bank (AIIB), and how Washington’s lack of leadership and bad judgment resulted in its humiliating defeat.
Apparently, China first lobbied the U. S. to join the AIIB in 2014 when the bank was still a concept. But a skeptical Washington worried “that China will use the bank to set the global economic agenda on its own terms.”
The Treasury secretary, Jacob J. Lew, the person who would normally be in charge of a matter like this, did not even call for a meeting to discuss whether the United States should consider joining or not. In addition, the administration sought to discourage its allies from joining, and advised G-7 countries that “the United States wanted a united front.”
However, America’s most steadfast ally, the United Kingdom, ignored the American request. The British government only gave Washington 24 hours’ notice after deciding to join the bank this March. Other US allies rushed in. This was an embarrassing diplomatic defeat for the United States. Continue reading America’s Self-inflicted Defeat in AIIB
At last week’s APEC summit in Manila, President Barack Obama sharply criticized China for building artificial islands in the disputed waters of the South China Sea. But instead of calling out China, Obama should have taken the opportunity to reconsider Chinese President Xi Jinping’s proposal for a “new type of major-power relationship.”
The Obama administration was concerned when Xi first raised this concept in 2012 when he was still China’s vice president. Does that mean that China expects to share power equally with the United States? What signal would that send to U.S. allies?
In his 2013 meeting with Obama, Xi Jinping defined the “new type of major-power relationship” as “no confrontation, mutual respect, and win-win cooperation.” This proposition marks a break away from the zero-sum game mentality, and serves American interests as well as the interests of the world.
However, all Xi Jinping’s benevolent messages such as “win-win,” “shared future,” and “interdependence” are falling on deaf ears. Americans tend to view anything the Chinese say with suspicion, perhaps for good reason. China has repeatedly claimed that it will never pursue hegemony. Yet, the Communist Party itself is the hegemon within China. Beijing has a lot of work to do in order to convince the international community that it would behave differently on the world stage.
For the U.S., however, embracing the “new type of major-power relationship” does not diminish American leadership, nor does it mean that the U.S. needs to share power with China equally.
A recent NYTimes article “Can the U.S. and China Get Along?” by Orville Schell, a longtime China observer and director of the Center of U.S.-China Relations at Asia Society, is an interesting read.
The author lists a range of old and new challenges in dealing with China, from Taiwan, to human rights, to disputes in the South China Sea, to cyberattacks, and more. At the center of these problems is China’s new leader Xi Jinping’s increasing assertiveness. He has called for a “China Dream” to restore China’s pre-eminence in the world with a focus on prosperity, national unity, and greater global influence.
That is a departure from what America had hoped for: with economic reforms and social exchanges, China will eventually become a country of “greater openness and constitutionalism.” In another words, it will become more like America. Now, America finds it’s hard to deal with a country that has a very different political system, history, and values.
What are the solutions moving forward? Letting the US-China relationship fall into an abyss like the US-Russia relationship is not an option. Schell proposes a number of hard choices that America must make Continue reading What Is the Future of U.S. – China Relations?
I was on KTSF Channel 26, a San Francisco Chinese TV station, on Sept. 5, to talk about my book The Chinese Dream and the impact of the Chinese middle class on the U.S. economy.
When China’s president Hu Jintao visits the U. S. this week, he will see a nervous America that seems to have lost its confidence. I have been on many radio talk shows recently to discuss my new book The Chinese Dream, the most common question I was asked is “Is China going to take over this country as our economy collapses?”
Americans today have become scared and paranoid. Such sentiments are not helped by doomsayers who have predicted America’s decline. In a recent article in Foreign Policy, Gideon Rachman, a foreign affairs columnist for the Financial Times, tells Americans that in the fable of the boy crying wolf the boy was eventually right: “The wolf did arrive – and China is the wolf.”
Rachman cited China’s population, its economic prowess, and its holding of $2.5 trillion in foreign reserves as evidence that China will replace the U.S. as a global hegemony. He lamented “America will never again experience the global dominance … those days are over.”
I disagree with Rachman’s assessment that growing Chinese economic clout will necessarily pose a threat to America. I have written about the myths of China as a superpower and global manufacturing power here and here. Today, however, I’d like to focus on what makes America a great country to begin with. Continue reading Think Again: America’s Best Days Are Still Ahead
Many people in the U. S. believe that the Chinese currency yuan is undervalued by 25-40 percent, which causes large trade deficits between the U. S. and China and costs hundreds of thousands of American jobs. Last month, the House of Representatives passed a bill that would allow the Commerce Department to impose tariffs on Chinese goods.
While there are many debates about the pros and cons of forcing the yuan to appreciate, few have paid attention to the root cause of America’s trade deficits. Stephen Roach pointed out that the United States has trade deficits with 90 countries around the world. The reason is that Americans don’t save. In 2009, America’s net saving rate was negative 2.3 percent. The United States has been borrowing from China and other countries to make up the gap.
To examine how America got itself into indebtedness, Nobel prize-winning economist Joseph Stiglitz argues that the current global financial system causes money to flow uphill from poor countries to rich countries, and it’s self-defeating. Continue reading What Happens When Money Flows Uphill
Geng Xiao, director of the Brookings-Tsinghua Center for Public Policy, discusses how divergent growth rates of the Chinese and US economies will erode the hegemony of dollar—but not right away.
Mr. Russel began the talk by saying that the relationship between the U.S. and the Asia Pacific “has changed in a big way” in the last seven years. President Obama is determined to use diplomacy to advance American interests in the region.
