Lower Temperature of Chinese Relations with Japan and the U.S. from "Nippy" to "Chilly"

China's Assistant Foreign Minister, Hu Zhengyue--who seems hold the bash-Japan brief--expressed umbrage that some Japanese officials somewhere had made inappropriate statements to the media concerning the Diaoyutai/Senkaku dispute,

Apparently there will be no fence-mending meeting between Wen Jiabao and Naoto Kan at the ASEAN get-together in Hanoi

What China is probably really angry about is this exchange at a press availability featuring Japanese Foreign Minister Seiji Maehara and U.S. Secretary of State Hillary Clinton in Hawaii a day or so earlier:

QUESTION: (Via interpreter) (Inaudible) Deguchi with Kyodo News Service. First a question for Secretary Clinton, and this is about security. Recently – this is about Senkaku Islands, which has (inaudible) spat between Japan and China. And I wonder if the security treaty between Japan and the United States will be applied.

...
SECRETARY CLINTON: Well, first let me say clearly again that the Senkakus fall within the scope of Article 5 of the 1960 U.S.-Japan Treaty of Mutual Cooperation and Security. This is part of the larger commitment that the United States has made to Japan’s security. We consider the Japanese-U.S. alliance one of the most important alliance partnerships we have anywhere in the world and we are committed to our obligations to protect the Japanese people.



It provides the context for Hu's sputtering in Hanoi and the rare deployment of the word "cahoots" in Chinese diplomatic discourse:

However, the truth was that the diplomatic authority of Japan, in cahoots with other nations, tried to create noises on the issue of the Diaoyu Islands in the East China Sea in the lead-up to the summits between ASEAN and its partners. On top of that, during the summits, the Japanese side frequently made use of media outlets to make statements and comments that violated the sovereignty and territorial integrity of China, Hu said.

The Chinese probably considered the statement a double slap in the face because only one day previously Maehara had been in Hanoi making happy talk with Chinese Foreign Minister Yang Jiechi.

After the meeting with Yang, Maehara told reporters:

"I believe it is likely that the leaders of China and Japan will hold a meeting here in Hanoi."

Amid the diplomatic rubble, the Chinese presumably took some satisfaction in demonstrating that Maehara--a China hawk detested by Beijing--has nonexistent powers of diplomatic prognostication vis a vis China.

What has the Chinese really upset, I would imagine, is that China was hoping that Sino-Japanese relations could tend toward normalization on a bilateral basis.

"Bilateral", of course, always has a whiff of "divide and conquer" in Chinese diplomacy, as in China trying to convince Japan its best interests lie in occupying a middle ground in Asia, rather than lining up as a U.S. strategic ally against China.

Clinton's statement formally multilateralized the Diaoyutai/Senkaku issue by explicitly placing the Senkakus in the scope of Article 5--something that the Obama administration was previously loath to do.


Also, Clinton's statement may perhaps embolden Vietnam to cobble together a united front to confront China over the Paracels.

From the Chinese point of view, perhaps there seemed to be little point in meeting with Prime Minister Kan--whose enthusiasm for confrontation over the Diaoyutai/Senkakus is apparently somewhat more tepid than Maehara's--and having their nose rubbed in the fact that the U.S. had chosen to line itself up with Japan formally on the issue.

Also, China is trying industriously to drive a wedge between moderates and China hawks in Japan.

Their efforts might get some purchase as Kan reflects that, in a remarkable coincidence, Foreign Minister Maehara managed to make the most important Japanese foreign policy statement over in Hawaii just in time to scupper Kan's get-together with Wen Jiabao in Hanoi.

Photographs of Kan and Wen and Maehara and Clinton shown at the top of the post provide an interesting juxtaposition of images.

As is a common Chinese practice, Japan served as a target of intemperate Chinese remarks, while the U.S.--obviously a nation that Japan was cahooting with--was treated somewhat more gently:

China Friday voiced concern over and strong dissatisfaction with U.S. Secretary of State Hillary Clinton's recent remarks concerning China's Diaoyu Islands.

"The Chinese government and people will never accept any word or deed that includes the Diaoyu Islands within the scope of the U.S.-Japan Treaty of Mutual Cooperation and Security," said Foreign Ministry spokesman Ma Zhaoxu.

It is hard to imagine any magical emollient oil that Hillary Clinton will be able to apply to Sino-American relations during her visit with Dai Bingguo in Hainan.

It is probably clear to Beijing that Chinese opinions on matters of equity and interest, and the possibility of Chinese economic or military retaliation, apparently do not concern the United States very much.

For the Chinese leadership, which has seen the PRC's international standing drop from respected superpower to virtual pariah in less than a year--and the diplomatic environment for sanctioning China on its currency becoming ever more favorable--the U.S. willingness to go to the mat for Japan on the Senkaku/Diaoyutai islands provides a lot of food for thought.

Expect a chilly winter.

Also, I wish to issue a mea culpa.

I am willing to grant that China disrupted rare earth shipments to Japan over the Diaoyutai/Senkaku incident.

That's a distinction I should have made in my Asia Times article, Japan spins the anti-China merry-go-round, and I regret not doing so.

Given the quota system/smuggling structure of China's rare earth trade, it would be easy to slow or stop exports simply by ordering heightened vigilance by customs, perhaps with the instruction that the validity and authenticity of export documentation such as licenses had to be reconfirmed at a higher level.  Keith Bradsher's article in the October 28 New York Times provides a detailed and plausible picture of a slowdown in Chinese rare earth exports.

The purpose would have been to send a pointed rebuke to Maehara, point out to Japan's business community that Maehara is not the best steward of Japan's relationship with China, and remind Japan that business with China is as important as Japan's security relationship with the United States.

In other words, a discrete use of enforcement power to send a message of dissatisfaction, not an embargo that could be construed as a violation of WTO regulations, damage China's image as an exporter, or threaten Japanese industry (given the significant stockpiles it holds), let alone a declaration of economic war against the West using rare earths as a weapon (considering the inevitable and expected entry of non-Chinese producers into the market as most of Chinese rare earths disappear into Chinese end-uses and exports dry up).

Of course, the effect was the exact opposite.

Maehara skillfully parried an attack on his brinkmanship over Diaoyutai/Senkaku and repurposed and escalated it into declarations of a Chinese attack on Japan, Europe, and the United States; and the U.S. government and the Western media dove in.

The point of my article--that the rare earths issue has been knowingly, dishonestly, and cynically inflated into an incident of anti-Chinese hysteria--still stands.

But it would have been a better article if I had addressed the Chinese action that probably triggered the firestorm.

My apologies.

Photo of Maehara and Clinton in Hawaii from the U.S. State Department website
Photo of Wen Jiabao and Naoto Kan in Hanoi from AP 

Maybe It’s Time to Stop Listening to David Shambaugh on China

Update:

I am willing to grant that China disrupted rare earth shipments to Japan over the Diaoyutai/Senkaku incident.

That's a distinction I should have made in the Asia Times article, and I regret not doing so.

Given the quota system/smuggling structure of China's rare earth trade, it would be easy to slow or stop exports simply by ordering heightened vigilance by customs, perhaps with the instruction that the validity and authenticity of export documentation such as licenses had to be reconfirmed at a higher level.  Keith Bradsher's article in the October 28 New York Times provides a detailed and plausible picture of a slowdown in Chinese rare earth exports.

The purpose would have been to send a pointed rebuke to Maehara, point out to Japan's business community that Maehara is not the best steward of Japan's relationship with China, and remind Japan that business with China is as important as Japan's security relationship with the United States.

In other words, a discrete use of enforcement power to send a message of dissatisfaction, not an embargo that could be construed as a violation of WTO regulations, damage China's image as an exporter, or threaten Japanese industry (given the significant stockpiles it holds), let alone a declaration of economic war against the West using rare earths as a weapon (considering the inevitable and expected entry of non-Chinese producers into the market as most of Chinese rare earths disappear into Chinese end-uses and exports dry up).

Of course, the effect was the exact opposite.

Maehara skillfully parried an attack on his brinkmanship over Diaoyutai/Senkaku and repurposed and escalated it into declarations of a Chinese attack on Japan, Europe, and the United States; and the U.S. government and the Western media dove in.

The point of my article--that the rare earths issue has been knowingly, dishonestly, and cynically inflated into an incident of anti-Chinese hysteria--still stands.

But it would have been a better article if I had addressed the Chinese action that probably triggered the firestorm.

My apologies.



CH 10/29/10


I usually discount China-bashing rhetoric pretty heavily.

But then I read a quote from David Shambaugh in the New York Times.

“This administration came in with one dominant idea: make China a global partner in facing global challenges,” said David Shambaugh, director of the China policy program at George Washington University. “China failed to step up and play that role. Now, they realize they’re dealing with an increasingly narrow-minded, self-interested, truculent, hyper-nationalist and powerful country.”

When Dr. Shambaugh says something like that, one has to think about it.

Shambaugh is one of the deans of modern China political studies.  I have appended his gigantic resume to the end of this post because it’s too long to include here.

Dr.Shambaugh definitely has the ear of the media, and I assume his counsels hold sway in the White House as well.  Jeffrey Bader, the administration’s China man, and Shambaugh share membership in the same Brookings Institute boffin brotherhood.

And if the Chinese have lost David Shambaugh, the U.S. China policy is headed for the deep freeze.

The issue, as I see it, is that Shambaugh is a serious “responsible stakeholder” proponent and analyzes Chinese foreign policy in terms of its difficulties in conforming to the “responsible stakeholder” paradigm.

In June 2010, as China’s foreign policy problems snowballed, he wrote:

Another reason for Beijing’s tentativeness likely derives from China’s not sharing the liberal values and norms that underpin most international institutions and system, although China has benefited enormously from them. It is difficult to be a “responsible stakeholder” – to use Robert Zoellick’s famous phrase – in an international system with which one does not share and practice the operating values at home and was not “present at the creation” to shape the system in the first place.

Meaning that China is finding it difficult to live up to certain norms in order to be recognized as a member in good standing of the international system win the approval and active support of the United States for its geopolitical goals, playing  ball on human rights, global warming, nuclear non-proliferation, trade, Iran…you get the picture.

Basically every area of U.S.-China disagreement.

Chinese editorial pages tend to harp on the deficiencies of the international system—two big wars and a global financial collapse in the last decade—and  pontificate furiously on the subject of whether insisting that the Chinese acknowledge the universal validity of Western values and liberal democracy is borderline racist or maybe even misguided.

These arguments are usually dismissed in the West under the “Commies are afraid of democracy” rubric.

Let’s leave that question to the philosophers.

As a practical matter,  Dr. Shambaugh’s ire towards China can, I think, be traced to his preference for “responsible stakeholderism” as the desirable alternative to a U.S. foreign policy of containment.

There is a significant military, national security, and political constituency for containment, especially within the United States.

I think Dr. Shambaugh is upset at China’s obstreperous non-stakeholderism because it is empowering the backwards-looking and destabilizing containment narrative.

His disappointment may be exacerbated if he himself was promoting that "one dominant idea” of responsible stakeholderism to the incoming Obama administration and takes its unraveling as a personal reproach.

The biggest problem is that some of our key allies don’t really follow these values either.

Again, I will leave the question of whether an idealist Hegelian construct like a global norm merely masks the continual and ineluctable pursuit of material interests to the philosophers.

Let’s just talk about the nitty-gritty of some of what’s been going on in the last year.

Narrow-minded? Self-interested? Truculent? Hyper-nationalist?

Pretty good descriptions of President Lee Myung-bak of South Korea and Foreign Minister Seiji Maehara of Japan.

You can also call them “aggressive, resourceful, and determined in advancing their national interests using the tools at hand”.

For Japan and South Korea to stand up to China to pursue their national interests, U.S. support is needed, whether it comes in the guise of anti-Communism, democratic solidarity, or “responsible stakeholderism”.

So, whatever the United States is selling this geopolitical season, Japan and South Korea have to be buying.

South Korea cares about reunification with North Korea on the most favorable terms possible.

Japan cares about having the United States as a credible and committed ally to counter China’s growing economic and military influence in East Asia.

In fact, I would argue that, especially for Japan, the U.S.-ally dynamic doesn’t represent shared commitment to advancing universal norms.

I think it’s just the opposite: national particularism on the model of Israel’s relations with the United States.

In 2009, the Obama administration  tried to leverage a post-Bush perception of the United States as an honest broker with the Muslim world to deal directly with Tehran and craft a win-win resolution to the Iran stand-off.

However, the U.S. government was outmaneuvered by Israel and its allies inside the United States.

 Instead, the U.S. has acquiesced to a narrative of the existential threat to Israel from Iran and its nuclear program, so nothing gets done in Middle East diplomacy without the a priori requirement of allaying Tel Aviv’s insatiable security concerns.

As a result, the Obama administration’s signature foreign policy initiative, its bedrock norm, if you will, nuclear non-proliferation, has been forced to take a back seat to Israel’s insistence that its nuclear arsenal not be acknowledged, let alone regularized within the structure of the Non-Proliferation Treaty.

U.S. relations with Japan incorporate a similar dynamic.

The United States argues that its presence in the western Pacific is a necessary and highly desirable pre-emption of the Japanese government’s willingness to restore a regional role to its military and trigger an arms race with China.

Japan, like Israel, is deeply suspicious of U.S. staying power in the region and doesn’t want to be the helpless victim stuck holding the bag  if Washington decides to cut a deal with its enemy for the sake of the global good.

So, this year, East Asia has seen a string of incidents that have forced the United States to acknowledge Japanese security concerns, while pitching China relations in the deep freeze.

On the issue of the Daioyutai/Senkaku Islands, the Obama administration notified Japan in August that it was not interested in explicitly supporting Japanese sovereignty over the islands.

One month later, Seiji Maehara took the deliberately provocative step of ordering the arrest and trial of a Chinese trawler captain under Japanese law for a collision in Diaoyutai territorial waters—over the reservations of his cabinet—and triggered an epic row with China.

The United States had no alternative but to stand with its main Pacific ally--albeit in ambiguous and unenthusiastic terms whose significance escaped the Western press.

 It is safe to say that engagement with China by the United States on the Diaoyutai/Senkaku issue—and any possibility that the U.S. could be recognized by China as an honest broker on the other island issues, such as the Paracels—is dead as a doornail.

Also in 2010, South Korea’s Lee Myung-bak used the Cheonan outrage to reset the North Korea issue away from the China/Six Party Talks track onto a West vs. Kim Jung-il and China track.

To be fair, if North Korea did sink the Cheonan, as appears likely, Lee was responding to an identical Nork tactic: generating a polarizing incident that would force reluctant ally China to stand by Pyongyang.

In any event, after the U.S. backed South Korea’s desire to wave the Cheonan bloody shirt at the Security Council, Beijing doubled down on its support of Kim Jung Il.

The chances for the U.S. and China to get together, great-power style, to negotiate a North Korean endgame on terms that might please Beijing more than Seoul have presumably diminished significantly as a result.

Maybe the Obama administration entered office with the idea of “win-win” international system accommodating Chinese interests and aspirations but its allies have driven it into “zero-sum” territory.

It’s not just China.

The lesson is, national interest always trumps universal norms, for our allies as well as our enemies.

China, Japan, and South Korea are all “responsible stakeholders” in terms of their national interests…and “irresponsible stakeholders” in terms of the global norms that the Obama administration wants the world to uphold.

And the Obama administration is, I would assert, guilty of the same vice.

I think the Obama administration realizes it got punked by Maehara on Diaoyutai/Senkaku…but that didn’t prevent a repeat of the same pattern of Japanese provocation and U.S. escalation on the manufactured issue of China’s rare earth exports.

The criticisms of China may be unfair and hypocritical but Gosh, it is an election year in the United States and China-bashing sure is popular…

So I would say that to understand what’s going on, we should stop listening to the norms-based criticisms championed by David Shambaugh…and actually watch the national-interest related antics of the various parties involved.

Perhaps we should recognize that a foreign policy that primarily serves the national interests of the U.S. and its allies while using the rhetoric of global norms to deny China the same right to advance its interests is unlikely to be productive of anything except continued friction.

Actually, Dr. Shambaugh obliquely conceded the point in a thoughtful op-ed he wrote for China Daily in March 2010.  Just substitute “United States” for “China”.  And for “abroad”,  “Many countries” and “world”, substitute “China”.

Does Chinese diplomacy offer a unique "model" in international affairs? Here, the answer is yes-at least rhetorically. ..Unfortunately, despite years - even decades -of promoting these concepts, they mainly fall on deaf ears abroad. Many countries do not wish to emulate and practice these concepts. The world is now more interested in what China does on the world stage, not what it says.

Speaking of what people do, I go after Japan’s Foreign Minister Seiji Maehara in two articles.

One digs into the Diaoyutai/Senkaku dustup at The Asia-Pacific Journal: High Stakes Gamble as Japan, China and the U.S. Spar in the East and South China Seas,The Asia-Pacific Journal, 43-1-10, October 25, 2010.

The other addresses the rare earth ruckus at Asia Times: Japan Spins Anti-China Merry-Go-Round.

On a less contentious note, I use Xie Chaoping’s history of the San Men Xia Dam fiasco, The Great Relocation, to explore the convoluted modern history of Yellow River hydrology in an article for the upcoming print edition of Counterpunch.  The subscribe link is here.

Dr. David Shambaugh’s cv:

Professor of Political Science and International Affairs
Director, China Policy Program, Elliott School of International Affairs
George Washington University

Professor Shambaugh is recognized internationally as an authority on contemporary Chinese affairs and the international politics and security of the Asia-Pacific region. He is a widely published author of numerous books, articles, book chapters and newspaper editorials. He has previously authored six and edited sixteen volumes. His newest books are China's Communist Party: Atrophy & Adaptation; American and European Relations with China; and The International Relations of Asia (all published in 2008). Other recent books include Power Shift: China & Asia's New Dynamics (2005); China Watching: Perspectives from Europe, Japan, and the United States (2007); China-Europe Relations (2007); Modernizing China's Military (2003); The Odyssey of China's Imperial Art Treasures (2005); and The Modern Chinese State (2000). Professor Shambaugh is a frequent commentator in international media, and has contributed to leading scholarly journals such as International Security, Foreign Affairs, The China Quarterly, and The China Journal.

Before joining the faculty at George Washington, he taught at the University of London, School of Oriental and African Studies, where he also served as Editor of The China Quarterly (the world's leading scholarly journal of contemporary Chinese studies). He also served as Director of the Asia Program at the Woodrow Wilson International Center for Scholars (1985-86), as an analyst in the Department of State Bureau of Intelligence and Research (1976-1977) and the National Security Council (1977-78), and has been a Nonresident Senior Fellow in the Foreign Policy Studies Program at The Brookings Institution since 1998. He has received numerous research grants, awards, and fellowships -- including being appointed as an Honorary Research Professor at the Shanghai Academy of Social Sciences (2008- ), a Fellow at the Woodrow Wilson International Center for Scholars (2002-2003), a Senior Fulbright Research Scholar at the Chinese Academy of Social Sciences Institute of World Economics & Politics (2009-2010), and a visiting scholar at institutions in China, Germany, Japan, Hong Kong, Russia, Singapore, and Taiwan.

Professor Shambaugh has held a number of consultancies, including with various agencies of the U.S. Government, The Ford Foundation, The Rockefeller Foundation, The RAND Corporation, The Library of Congress, and numerous private sector corporations. He serves on several editorial boards (including International Security, Journal of Strategic Studies, Current History, The China Quarterly, China Perspectives) and is a member of the International Institute of Strategic Studies, National Committee on U.S. China Relations, the World Economic Forum, The Council on Foreign Relations, Pacific Council on International Policy, Committee on Security Cooperation in the Asia Pacific (CSCAP), The Asia Society, Association for Asian Studies, and International Studies Association.

Professor Shambaugh received his Ph.D. in Political Science from the University of Michigan, an M.A. in International Affairs from Johns Hopkins University Paul H. Nitze School of International Studies (SAIS), and B.A. in East Asian Studies from The Elliott School of International Affairs at The George Washington University. He also studied at Nankai University, Fudan University, and Peking University in China.

Xie Chaoping's "The Great Relocation"

I have a two-parter up at Asia Times drawing on a book by Chinese investigative journalist Xie Chaoping entitled The Great Relocation. 

If you follow China news closely, you may have heard of Xie.  He was detained for about four weeks in August-September by a local government that was offended by his book.

Since the Internet is a wonderful place with a powerful disregard for copyright, Xie's book (in Chinese) is readily available on-line.  Xie had to fight well-funded and determined efforts to spike the book and it seems that he left an electronic copy floating around in case his opponents were successful in silencing him.

Some versions are truncated, usually omitting a detailed report on the extra-legal detention of the main local whistleblower in the case--and his escape from his knuckleheaded bureau of public security captors.

The Great Relocation covers the plight of hundreds of thousands of peasants who were moved out of some of Shaanxi's most fertile land in the 1950s to make way for the reservoir of the San Men Xia Dam.

When one reads the account of their fifty year struggle to recover their homeland, their prosperity, and their dignity, every metaphor for the insulted and injured comes to mind:  medieval Crusaders, the anti-government outlaws of On the Water Margin, slaves, Zionists, Roma, Palestinians...

More than just a fine piece of investigatory journalism, The Great Relocation is the Moby Dick of botched dam stories, covering history, technology, politics, criminology, the corruption of power, the nitty-gritty of graft, personal testimony, obsession, and the role of the media in exposing and following the story.

My two-parter provides an overview of the many issues that Xie examines, here and here.

World War III Public Service Announcements

 A lot of matches are flying around the Chinese tinderbox.  

Fortunately, most parties involved seem more interested in scoring political points than making a genuine and risky effort to push back China.


However, as the example of Sarajevo tells us, sometimes wars happen when nations become prisoners of their own posturing.  

So it's worthwhile to take a careful and critical look at what's happening in China's backyard with U.S. allies Japan and South Korea and wannabe regional partner Vietnam, and the political circus surrounding valuation of the RMB.

1.  Let Japan Teach Us How to Start a Pacific War

I have two articles up at Asia Times in recent days.

One covers the waterfront, as it were, concerning tensions in the China and South China Seas.

Simply put, the tension in the seas surrounding China is not caused by Chinese aggressiveness; it is the logical outcome of the Obama administration's return-to-Asia strategy.  South Korea, Japan, and Vietnam are emboldened to stand up to China because the United States stands behind them.  Kind of.

Most recent case in point:  the flare-up over Captain Zhan, the Chinese fishing trawler captain arrested by the Japanese for colliding with two Japanese coast guard vessels.

As my article at Asia Times points out, the hard line on the issue of Captain Zhan was pushed by Seiji Maehara, current Japanese Foreign Minister and one of the most energetic advocates of the U.S.-Japan special relationship within the DPJ.

Nevertheless, China was blamed for escalating the crisis.

An amusing sideline to the whole issue was Maehara's unsuccessful efforts to inveigle the U.S. into supporting his stand on Captain Zhan, even after Prime Minister Kan was apparently eager, nay anxious, to put the matter behind him.

Japanese and U.S. willingness to tug the dragon's whiskers is even more overt in the South China Sea, where Secretary of State Clinton and Maehara's predecessor as FM, Katsuya Okada, rather irresponsibly injected themselves in the local disputes in order to curry favor with Vietnam which, I must admit, looks like it got jobbed when the PRC seized the Paracels from a South Vietnamese garrison in 1974. 

The South China Sea is a fruit salad of flags, conflicting claims, and interested countries waving three-hundred year old historical records to advance their arguments.  As long as the principle of free transit continues to be adhered to by all parties, muddling through looks to be the best solution; promoting an adversarial multilateral process simply won't work, IMHO.

The generally godawful Western reporting on the subject demonstrates that foreign affairs correspondents of the access-journalism persuasion did not have their gullibility circuits blown by their performance in the runup to the Iraq war.  Japanese reporting on Maehara's contortions, in particular, seemed to elevate wishful thinking to an editorial policy.

The whole story can be found at Asia Times.  It seems the headline writers at AT made a slight slip, entitling the story Japan poured oil on troubled waters. It looks like Japan is doing quite the opposite.

2.  If We Can't Have a Real War, How About a Trade War

Japan also figures in the second story, which concerns U.S. handwringing over the Chinese trade surplus and the undervalued RMB.

The main justification for compelling a revaluation is the precedent of the 1985 Plaza Accord, by which the United States strongarmed Japan into an enormous revaluation of the yen, from somewhere around 250 to 120 yen to the dollar.

Paul Krugman of Princeton University argues vociferously that a punitive tariff will strengthen the yuan de facto and rebalance the trade books whether China likes it or not.

Ronald MacKinnon of Stanford University (the "Princeton of the West" as they say in Palo Alto) says that's an illusion.

My personal feeling is that in economics, as William Goldman wrote about Hollywood, "Nobody Knows Anything".

I think there is nostalgia for the Plaza Accord simply because we had enough muscle to twist Japan's arm until it cried Uncle! 

More nationalist empowerment than economic logic, that is to say.

But the Plaza Accord didn't solve America's trade deficit problem, and it totally screwed up Japan's economy.

In addition to the dismal example of the Plaza Accord, the PRC has compelling contemporary reasons not to revalue the RMB per U.S. demands. 

Two reasons, actually:  the flow of hot money that a stated revaluation policy would attract, and the dangerous effect of hot money on China's real estate bubble--a bubble that is financing anywhere from a third to half of local government spending inside China.

If the reader desires a comprehensive overview of the politics of currency revaluation--and the dismal role of the dismal science in the debate over the Chinese trade surplus--I document the atrocities at China plays by its own currency rules.


3.  Let's Turn North Korea Into Iraq.  It's the Only Place Where One Might Call That an Improvement

Finally, Korea.

Because of space and topic limitations in my AT pieces, I didn't address South Korea, the third leg of the rather rubbery tripod of U.S. allies seeking to make political and geostrategic hay from the U.S. "return to Asia".

However, a while back the Korea Times yielded a news report so magnificent that I believe it deserves special commemoration.

The backstory is that the Lee Myung-bak government of South Korea and the Obama adminstration decided to move away from the Six Party Talks, which gave considerable prestige to China but yielded negligible progress.

The alternative was apparently a policy of malign neglect, ignoring the DPRK (and China) and betting that the ROK and USA could sweep in to pick up the pieces when the Kim Jung Il regime finally fell on its ass for good.

The orchestrated reaction to the Cheonan sinking, demanding further isolation and destabilizing sanctions against the Pyongyang regime through the UN Security Council, western governments, and Japan, seems part of this policy.

And China assumed the role of the heavy, questioning both the conclusions of the Cheonan investigation (neither China nor Russia, the two nations with the best foreign understanding of North Korea's military capabilities, were invited to join the investigation) and the way the U.S. and ROK pursued the issue through the UN and outside the Six Party Talks framework.

I assume James Steinberg of the National Security Council and Kurt Campbell, Assistant Secretary of State for East Asian and Pacific Affairs, are the American Richelieus who have conceived and executed this rather subtle policy, which has China writhing rather angrily on a cleft stick nowadays.

But whatever clever policy civilians formulate, the military can screw up with ham-fisted obviousness.

Courtesy of Korea Times: 

South Korea and the United States have executed “realistic” training exercises to respond to various types of internal instability in North Korea, the top U.S. military general said Thursday.

Such drills were held during the latest Ulchi Freedom Guardian computerized simulation exercise from Aug. 16 to 26, said Gen. Walter Sharp, commander of U.S. Forces Korea (USFK).

…

[W]e take lessons learned out of Iraq and Afghanistan that we think apply here in the ROK and exercise those also,” he said. “So one of the things that we have learned out of Iraq and Afghanistan is that you can be fighting and attacking at one area and defending at another area.”

The main mission is to stabilize and protect the population in the area, he said, adding both militaries are designing such exercises to ensure that they “are able to not only to defend, not only able to attack and kill, but also able to provide humanitarian assistance” to help ensure security and stability for everyone in the region.

Sharp said North Korea stabilization operations are to be conducted by both governments.

It is noteworthy that the U.S. military believes there are successful lessons from our adventures in Iraq and Afghanistan that can be applied to invading and occupying North Korea.

Hey, it's not just attacking and killing!

Well, it's still mostly attacking and killing.

If General Sharp had more time, I'm sure he could have mentioned some other features of American COIN policy, such as: encouraging sectarian and ethnic division to assist pacification and security; rampant corruption; death squads; extensive use of brutal and unregulated mercenaries; and the creation of a weak, divided government unable to provide security and dependent on American good offices and continued U.S. military support.

I'll bet it's all in the latest version of the Ulchi Freedom Guardian video game: Tender Claws of Freedom!