Thursday, June 06, 2013

Humble pie for on menu for Xi Jinping at Sunnylands

[This piece originally appeared at Asia Times Online on June 6, 2013.  It can be reposted if ATOl is credited and a link provided.]

The expert consensus is that the Barack Obama-Xi Jinping summit at Sunnylands, California is something of a relationship-building nothingburger. The summit was arranged on short notice, there is no detailed agenda, and the most likely result is that Obama and Xi will get to know each other better and therefore communicate more effectively.

In fact, the main concern of Western adversaries of the People's Republic of China (PRC), from dragon-slayers on the right to human rights crusaders on the left, seems to be that President Obama will surrender to Xi Jinping's burly charm and slacken in his resolve to twist the panda's testicles.

From the right, the American Enterprise Institute's Michael Auslin wrote an op-ed on the Foreign Policy magazine website asserting that the summit shouldn't even have happened.
... [S]summits like this one should be reserved for friends and allies ...

There are almost no shared values between Beijing and Washington, and little complementary policy. The Chinese engage with the United States because it allows them to play the charade of backslapping, while sidestepping tough issues. Unfortunately, Washington finds itself in a dialogue dependency trap ... [1]
Writing at the Asia Society's ChinaFile blog, Professor Andrew Nathan also expressed his concern that excessive comity might break out:
I hope our president avoids signing on to "a new type of great power relationship." This is Chinese code for the US preemptively yielding to what China views as its legitimate security interests. These interests are quite expansive - acceptance of the Chinese regime as it is, human rights violations and all; acceptance of China's territorial demands in the East and South China Seas; deference to China's views on the rules governing international trade, currency, climate change, humanitarian intervention, and so on ... I think a new equilibrium between American and Chinese interests will have to be achieved by painstaking work on concrete issues over a long period of time, often in a contentious environment. [2]
For good measure, Foreign Policy blog's Isaac Fish contributed a post hailing Michelle Obama's non-appearance at the summit, only expressing regret that her absence was officially attributable to obligations surrounding end-of-school for the children in Washington, and not an overt snub to Xi's wife to shame her for her past role as PLA chanteuse.

It is unlikely that President Obama will conduct his meeting with Xi like a middle manager briskly interviewing an unqualified and unattractive job applicant over a latte in the local Starbucks, impatiently checking his Blackberry during the pitch and abruptly leaving to get his car washed.

However, skeptics should be pleased that the United States holds the advantage at this particular juncture of the evolving US-China relationship and is probably prepared to use it.

The "pivot" - also known as "the rebalancing" - is working, albeit in unexpected ways.

The US exercise in "confrontainment" has not produced a united, US-led coalition compelling the PRC to upgrade its adherence to Western universal norms in return for the right to continued full membership in the community of nations.

Instead, Japan, under the rule of the PRC-hostile nationalist Shinzo Abe, is working to co-opt the rhetoric and goals of the pivot to create a favored place for Japan as the crucial economic and security component in an alliance of Asian democracies confronting China, thereby spooking the PRC and also working against the US hegemony in Asia which the pivot was intended to prolong.

Abe is doing the heavy lifting in assembling a Great Wall of Asian democracies containing China, roaming Asia in search of allies (and for the aid/trade/investment opportunities needed to provide some long-term fuel for his program of economic rebirth, "Abenomics").

To China's chagrin, Abe appears to be quite successful in getting open commitments to enhanced economic and security competition with China's regional adversaries (the Philippines, Vietnam), and conducting high profile engagement with erstwhile PRC ally/satellite Myanmar.

The nastiest shock for PRC, however, was the open tilt by India away from China and to Japan. Although Premier Li Keqiang made India the destination for his first overseas trip after assuming office, his visit was overshadowed by a flare-up in border tensions in Ladakh and Indian disgruntlement over China's large surplus in bilateral trade.

Shortly thereafter, Indian Prime Minister Manmohan Singh paid a working visit to Tokyo, and his rhetoric went considerably beyond the triangulating rhetoric usually associated with Indian foreign policy to a full-throated endorsement of the special India-Japan relationship.

An Asia in which the Philippines, Vietnam, and India might be following the lead of Japan in an anti-China coalition is not just a matter of diplomatic embarrassment and potential (if remote) military hazard to the PRC.

There is the matter of the competing trade blocs: the US-led "Trans Pacific Partnership", the "high standards" pact that does not include the PRC, and the ASEAN-based and China-promoted alternative - the Regional Comprehensive Economic Partnership, or RCEP, which has a more hospitable attitude toward mixed economies and state-owned enterprises and does not make a fetish out of the extraterritorial intellectual property and legal rights of multinational corporations as the TPP does; nor does it include the United States.

Japan has seized on TPP as a crucial element in its strategy to push the PRC toward the economic sidelines and assert a more central role for Japan, as a backgrounder in India's Financial Express pointed out:
From its start, the TPP was more than a regional trading arrangement. The US has not shied away from allowing it to be viewed as a response to China's growing economic presence in the Asia-Pacific. Abe has noted that the TPP's impact extends beyond the economic sphere. Participation in the TPP will allow Japan to create a "new economic order" with the US, creating new rules and ensuring stability in the Asia-Pacific region. Importantly, Abe sees the creation of this new order and its new rules as important steps in achieving Japan's national interests. Given that Japan is currently embroiled in a territorial dispute with China over the Senkaku islands, joining the TPP can also be seen as an attempt on the part of Japan to counter increasingly assertive China. ...

On the one hand, regional convergence based on the RCEP model will facilitate China's rise as the dominant Asian power. Conversely, a TPP-driven convergence will allow the US to re-assert itself as the dominant power in Asia. [3]
Since the inner workings of the TPP negotiations are notoriously opaque, it is not clear that Japan's full participation in TPP negotiations will give it the power - which is theoretically the prerogative of other members - to blackball new applicants. However, given Abe's China strategy, it is not unreasonable to speculate that the ability to apply a chokehold to China's TPP plans figured in Japan's decision to join negotiations.

At the same time, Japan is also a participant in the RCEP talks.

Perhaps equally fatally for the PRC's hopes, India, as befits its ambitions if not its location, is also a partner in the TPP talks as well as the RCEP talks.

If Japan and India combine to call for the RCEP to meet the same standards of the TPP, they have enough economic and geopolitical clout to make the TPP negotiations become the de facto standard. The RCEP - and the PRC - can languish on the sidelines.

Sidelining China and allowing Japan to occupy a central position among the smaller Asian maritime democracies - in essence, acting as a big frog in a smaller pond - is a good thing for Abe, but not necessarily for the United States, which will find itself crowding in the smaller pond it will have to share with graying, economically shaky Japan.

With conditions tending towards the unfavorable in Asia, and Japan's independent foreign policy whittling away at US claims to hegemony, the PRC's alternative is to play the US card and persuade the United States there are sound geopolitical advantages in restraining Japan, admonishing India, and allowing China some advantage in its myriad territorial and economic disputes.

In recent days, China has made several conciliatory moves: it sent a high-level delegation to the Shangri La defense ministers gab fest in Singapore to challenge the framing that the PRC is a bunch of confrontational knuckleheads on regional security and territorial issues. The PRC was determined to engage, as Reuters reported in "China turns on the charm at regional security forum":
[T]he charm offensive by the People's Liberation Army (PLA) officers, less than a week before Chinese President Xi Jinping meets US President Barack Obama for an informal summit, appeared to be designed to tone down the recent assertiveness by emphasizing cooperation and discussion ...

[A] senior US official accompanying Defense Secretary Chuck Hagel to the forum saw a big change in the Chinese delegation. "Last year China had a very, very small contingent, a relatively junior-ranking contingent. This year they came in force ... and have been very active in the panels," said the official. "That's very, very good. We want everybody to engage." [4]
Then there was some discreet groveling on the issue of the Trans Pacific Partnership, via People's Daily:
China has been following the talks on the Trans-Pacific Partnership (TPP) and hopes for more transparency in the discussions, Foreign Ministry spokesman Hong Lei said on Friday.

Hong's remarks came after the US Under Secretary of Commerce for International Trade, Francisco J Sanchez, said the United States welcomes China to join the TPP. ...

Hong said China is open-minded about cooperation initiatives that are conducive to economic integration and common prosperity in the Asia-Pacific region, including the TPP and the RCEP. [5]
Add to that conciliatory noises on the vexing issue of North Korea via a leak to Reuters designed to communicate that the Chinese leadership got tough with North Korea's envoy when he showed up in Beijing end-May:
Beijing tried to convince Pyongyang to stop its nuclear and missile tests ...

China has grown increasingly frustrated with Pyongyang. It agreed to new UN sanctions after Pyongyang's latest nuclear test in February, and Chinese banks have curbed business with their North Korean counterparts in the wake of US sanctions on the country's main foreign exchange bank.

A former senior US official said Beijing's insistence that North Korea halt testing would be in line with recent signs it was running out of patience with Pyongyang.

"What I've heard from talking to Chinese officials and American officials who are talking to them is that top Chinese officials now emphasize that the principal goal is to terminate the nuclear weapons program of North Korea," the ex-official said. [6]
And immediately prior to President Xi's arrival in the United States:
A US businessman who was unable to leave China for nearly five years has returned to his home in the US. Hu Zhicheng was detained in China in 2008 when a former business partner accused him of commercial theft. ...

Chinese foreign ministry spokesman Hong Lei told reporters that Mr Hu had been restricted from leaving China because of an ongoing lawsuit.

"Now these restrictions have been cancelled according to legal proceedings. The relevant judicial cases are being handled," he said. [7]
All these initiatives add up to a message of conciliation from the PRC to the United States.

Are these simply the cynical machinations of a hostile regime determined to disguise its motives and shield its actions? A low-cost diplomatic strategy to grease the wheels for an otherwise meaningless friendly photo-op with President Obama to boost Xi Jinping's domestic stature?

Or is Xi prepared to execute as well as offer some genuine concessions in order to obtain, if not the unlikely "US China partnership", more of a tilt toward China and away from the pivot coalition in Pacific affairs? Probably a key indicator will be how the "cyber-outrage" narrative plays out.

The United States has been methodically hyping the Chinese cyber-threat since November 2011, systematically escalating the attributions, the accusations, and the anxiety from initial suspicions of non-state hacking maybe originating in China to current declarations that the Chinese government and military execute a massive state-directed hacking program against US commercial, governmental, and military assets.

A climax of sort will be reached in Sunnylands when President Obama officially gets into Xi Jinping's grill and provides a dossier of alleged Chinese cyber-outrages and the costs they have inflicted on US businesses.

The US cyber-position is rife with contradictions, starting with the fact that the United States - with its technological assets, its central position in the world communications infrastructure, the National Security Agency's pressing need to build server farms the size of the Astrodome to store the petabytes of data it has accidentally stumbled across (which, by US law, is supposed to exclude communications inside the United States), and the fact that the United States followed up its proud record of nuclear first use at Hiroshima to become the first use state for cyber-weapons with Stuxnet, the attack on Iranian centrifuge facilities - is the king of covert cyber-activity.

As Kenneth Lieberthal of Brookings put it:
President Obama needs to be sensitive to the reality that, from a Chinese perspective, the United States nearly owns the cyber arena. America has the most advanced tools and capabilities, and the Chinese political and financial systems largely run on American software. China assumes the US uses that huge capability to its advantage. That is a perception that will be part of the equation in any serious cyber discussion. [8]
One has to wonder if America's "China cyber-threat" posture has something to do with the realization that the Chinese government had allowed the yuan to appreciate to its natural value and a replacement threat narrative was urgently needed to keep the onus on the PRC as a rogue state.

Today, the traditional narrative that "Chinese companies beat out US companies because of an unfair exchange rate advantage" has been superseded by the borderline racist "Chinese companies can't innovate and can only succeed by stealing US secrets" reboot. Per NPR:
[I]f Chinese businesses can steal US technology, they can blunt the one big advantage US companies have in the global economy, which is their capacity to innovate. It is that spirit that explains the emergence of US companies like Microsoft, Apple or Google. Such companies, business experts say, have been far less likely to originate in China, because the business culture in China does not favor creativity. But they can always steal the products of US creativity. [9]
Then there are the accusations of military espionage, which lend themselves to even more dire narratives:
Lou Dobbs, CNBC: Remember, a little over a year ago, the Joint Chiefs made a similar statement, that in certain instances, intrusions in cyberspace will be considered an act of war against the United States and will be treated as such. What more ... what in God's name would it take to create an act of war? You couldn't do this in anything but the virtual world and have there be any doubt about it. It's an act of war. [10]
The Obama administration's high-profile jihad against Chinese hacking would appear to be an exercise in futility from a legal/diplomatic perspective.

Given the opaque nature of the Internet, it is unlikely that the United States will ever be able to document Chinese cyber-intrusion to a degree sufficient for an international commercial tribunal, let alone achieve the level of proof needed to launch a cyber-attack or cruise missile under international law. But that's not a bug, it's a feature.

What President Obama is presumably threatening is unilateral, discretionary, and unattributable off-the-books cyber-retaliation by executive order for cyber-infractions unless Xi acts on his dossier.

Things get better, in other words, or things get fucked up.

Not exactly the Platonic ideal of justice, but extremely useful to the United States: it can unilaterally define the crime, attribute it, demand punishment, and, inevitably, declare that the punishment was insufficiently thorough and sincere, in a fashion that will be immediately familiar to anyone who recalls the US campaign against Iraq's WMDs and Iran's nuclear program.

I expect that, for the sake of improving relations with the United States, President Xi will consider accepting the dossier and ordering up a few cyber-sacrifices in the digital arena. Accepting the dossier and "doing something" will be a relatively momentous step for Xi, if he undertakes it. If the PRC acknowledges the validity of US cyber-complaints the issue will never, ever go away (unless a new, even more effective instrument of China bashing materializes).

I expect Xi will consider assuming his cyber-enforcement duties with the understanding that nothing he can do will ever be considered sufficient by the United States, any benefits China gains in return are conditional, transitory, and subject to immediate revocation, and his domestic stature will not be enhanced by cooperating with the US on this issue.

This impression will be reinforced by the reshuffling of President Obama's national security team. Tom Donilon, President Obama's National Security Advisor, is stepping down in July and will be replaced by UN Ambassador and erstwhile candidate for secretary of state Susan Rice.

Donilon was the architect of the "rebalancing" to Asia, or perhaps the architect of appropriating Kurt Campbell's conception of the pivot, renaming it, and, in the first months of President Obama's second term, repurposing it to achieve a measure of meaningful engagement with the PRC.

Donilon was known for his focus on managing the national security process and its diverse constituencies to secure a range of foreign policy options for the White House. Reportedly, he was very keen to schedule the Sunnylands summit (the first president-to-president meeting was originally scheduled for the G-20 get together in September), quite possibly viewing it as his swan song and a chance to bring to fruition his project for rebalance-driven engagement.

Donilon is probably right to feel a sense of urgency, since his successor is likely to take a jaundiced view at the possibility of a constructive and productive relationship between China and the US.

Judging by preliminary reports and her performance at the United Nations, including her full-throated advocacy of the Libya intervention and disregard for the consequences for the overseas victims of her flawed moral certainty, Ambassador Rice is more likely to be an advocate for a moral interventionist agenda within the bureaucracy and to the president than an objective facilitator of the national security process. [11]

Rice will be replaced at the UN by Samantha Power, who is, perhaps, even more of a moral interventionist (fun fact: Power, an important adviser to President Obama on foreign policy, had been blocked from a high position in the Obama administration because she had called Hillary Clinton a "monster" while acting as an Obama campaign surrogate in 2008. It would be interesting if the trigger for all this musical-chair activity was the retirement of Hillary Clinton and the possibility to finally slot Ms Power into the high foreign policy position it was felt she deserved. With Rice and Power in the top spots President Obama originally intended for them, it will be interesting to see how much influence John Kerry can exert as secretary of state.)

Given staffing trends, President Obama's own inclinations, and its crude political utility, I expect cyber-indignation to remain at the center of US China policy.

And I expect that President Xi, cognizant of the fact that he needs some goodwill from the US, no matter how transitory, will think seriously about the risky and highly consequential step of validating the US cyber-threat bugbear.

1. Xi's Not Ready, Foreign Policy, June 4, 2013.
2. What Should Obama and Xi Accomplish at Their California Summit?, ChinaFile, May 29, 2013.
3. Where does India stand amid changing Asia-Pacific trade dynamics?, Financial Express, April 4, 2013.
4. China turns on the charm at regional security forum, Reuters, June 2, 2013.
5. China hopes for transparent U.S.-led TPP talks, People's Daily Online, June 1, 2013.
6. China tried to convince North Korea to give up nuclear tests - source, Reuters, June 4, 2013.
7. US businessman Hu Zhicheng released from China, BBC News, June 5, 2013.
8. U.S.-China Relations: The Obama-Xi California Summit, Brookings, June 3, 2013.
9. U.S. Turns Up Heat On Costly Commercial Cybertheft In China, NPR, May 7, 2013.
10. Dobbs Wants U.S. to Declare War With China for Hacking, C&L, May 28, 2013.
11. Donilon's Legacy,, June 5, 2013. (Subscription only).

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