Banking on China

Review of Dealing with China: An Insider Unmasks the New Economic Superpower, by Henry M. Paulson, Jr. Twelve, 2015.

Years after the conversation happened, a senior Western executive still relished telling me how much the compliment meant to him when a high Communist Party official told him “the words that all of us who have worked in China long to hear: that I was ‘a friend of China.'” That friendship is not without a certain price. Sometimes, the longer one knows someone, the less one truly understands him at all.

Count possibly among these blinded friends Hank Paulson, former chief of Goldman Sachs and U.S. Secretary of the Treasury, who has recently published his account of more than three decades Dealing With China. The China Paulson knows is a deeply pragmatic one, committed to economic reform. But the China Paulson professes to know is an incomplete one, one that excludes the undercurrents of nationalism and ideology that so many other China watchers consider grave risks. For Paulson, they are little more than impediments to the next deal.

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A divided China

Understanding the dynamics of Chinese politics has always been part science, part art, and part mystery. At the heart of these discussions are the factions around which Chinese politics is conceptualized. A recent paper has challenged many of these assumptions, simultaneously clarifying how power is distributed in China while raising new questions for where Chinese politics are headed.

In “The Trouble With Factions,” Alice Miller, a fellow at the Hoover Institution and lecturer in East Asian Studies at Stanford, argues that much of what passes for analysis of China’s factions is ill-defined, arbitrary, and with little in the way of real predictive or interpretative value for those assessing China’s leaders.

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Were last week’s US-China breakthroughs a step back?

China’s surprise announcement of a commitment to manage its greenhouse gas emissions last week made headlines the world over. That it was made during Barack Obama’s state visit, after months-long negotiations between the two nations, and alongside other meaningful advances on issues such as trade was celebrated as a cause for optimism about a fresh start for US-Chinese relations. That optimism, however, should not go without caution. Indeed, every bit of good news coming out of last week’s landmark agreement carries with it reason to worry about the state of US-Chinese relations and the broader system of global governance.

Negotiated over a period of months by mid-level bureaucrats, the climate deal says much about the health of the bilateral relationship. For some long-time China watchers, Obama’s visit to Beijing reinforced the absence of a point person on Chinese affairs with direct access to Obama and the ear of Beijing. Those who lament this absence as a way of longing for the return of a Kissingerian figure singularly entrusted with managing the relationship are misguided. No individual can or should dominate a bilateral relationship as significant as this. The Kissingerian paradigm is a historical artifact that even China is evolving away from as their international diplomacy grows in experience and confidence. The efforts taken by the Bush and Obama administrations to institutionalize relations through the Strategic and Economic Dialogue have been a step forward. The climate deal is arguably the first significant success of the institutionalization of ties it has promoted.

Yet, there is a reason to worry about the absence of a particular kind of point man. As the bilateral relationship becomes more institutionalized, it needs an official capable of coordinating the vast apparatus of the US government and uniquely able to advise the president on how to leverage it. This internal voice is inseparable from having a clear China policy. As the “pivot to Asia” has consistently produced more disappointment than progress, it is unclear in the final two years of the Obama administration whether there ever was a comprehensive China policy at all. Last week’s agreement could be less the sign of a step forward through which breakthroughs in other spheres will follow than it is the beginning of the usual pattern of presidential legacy-building abroad.

The most important implication of this deal is its effect on global governance. Even prior to becoming president, Xi Jinping made much of a “new great power relationship.” Like most political rhetoric anywhere, its exact contours are hard to read but seems inescapable from Chinese equivalent of a G2. The Obama administration, for its part, has studiously avoided acknowledging this as a viable construct for managing US-China affairs. Its actions in bringing the climate deal to light, however, contradict this.

The US may have seen this agreement as an attempt to “divide and conquer” the big developing powers who have held out on a climate deal. From this perspective, a deal with China may make one more likely with holdouts such as India, and thus make a global deal possible. While the deal may ultimately be good for the climate, it is potentially bad for global governance. Instead of requiring China to engage constructively in a multilateral context, the US has effectively let China’s “great power relationship” come to pass. A G2 works to China’s interests because it entrenches the expectation that the world’s two dominant powers can act outside of the normal global system. When working to advance global interests, it is almost excusable; yet the true value for Beijing (and, regrettably, occasionally for Washington) is when this dynamic allows them to act contrary to it.

Even if the agreement struck last week with China were to make a global climate accord happen sooner than it otherwise would have, it is arguably a loss for the international community. Only if the international community is able to demonstrate its collective resolve on this and the ever growing list of transnational issues will global institutions earn China’s respect. The US too needs the strength of an empowered international community: in a G2-context, China can obstruct progress on global issues on the basis of the ups-and-downs of its bilateral relationship with Washington, cycles that Beijing has shown it is more than adept at manipulating. In a G2 world, Washington would be forced to choose between its commitment to human rights and the threat of Beijing derailing vital global agreements as a sign of its displeasure. Only when China is expected to act as a power within the full the community of nations can the voice of the United States be its most resolute.

The US has the unique responsibility of ensuring China’s successful integration into the global governance system. That at times may come into conflict with the more limited set of truly bilateral issues the US may have with China, either directly or in support of its allies. Part of this integration must come from Washington ceding some relative influence in global institutions like the IMF and World Bank and allowing them to evolve to meet a new era. On this count, Washington has fallen short for some time, leading China to launch parallel institutions like the Asian Infrastructure Investment Bank. Integrating China into the global system must also come from a discipline to not engage China as a de facto G2. When Washington and Beijing act outside of the community of nations, it does not genuinely deepen China’s commitment to the global system. Instead, it reinforces a world in which two powers may unilaterally set the global agenda – two powers that Beijing hopes and Washington fears will in time become one.

This essay was originally published on HuffPost

A new empire?

Review of China’s Second Continent: How a Million New Migrants Are Building a New Empire in Africa, by Howard W. French. Knopf. 2014.

For the past decade, the West has been obsessed with the narrative of Africa as a continent subject to exploitation by a rising and resource-hungry China. According to Western convention, China, in its rush for resources and wealth, has exerted a corrupting influence upon Africa’s fragile governments. A new book provides the most richly reported and, perhaps, the fairest look yet at how China’s presence is reshaping Africa.

Howard French, a professor at Columbia University and former international correspondent for the Washington Post and New York Times in Africa, China and a host of other locales, is the author of China’s Second Continent. French’s reporting takes him to a dozen African countries and into the lives of a colorful cast of Chinese who, either on their own or as part of state-directed efforts, have found their way to Africa.

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The inevitable vote: the United Nations, Taiwan, and the People’s Republic

After twenty-two years of debate, the United Nations on October 25, 1971 voted to expel Chiang Kaishek’s Republic of China and seat Mao Zedong’s People’s Republic. That vote, made only months before Richard Nixon became the first American president to visit China, would close one chapter of world history and affirm the beginning of China’s reopening to the world. As the first and only decision to effectively expel a member of the United Nations, the vote also marked an important coming of age for the United Nations as a body willing to act independently of the United States.

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Modern family

Review of The Lius of Shanghai, by Sherman Cochran and Andrew Hsieh. Harvard University Press. 2013.

They were the Chinese Rockefellers. At their head stood Liu Hongsheng, head of a Shanghai industrial empire whose family lived through China’s tumultuous war years beginning with the Japanese invasion and ending with the Communist triumph in 1949. Thanks to a unique trove of thousands of letters, in the Lius of Shanghai, it is his role as a father of nine sons and three daughters (and one of each by two mistresses) that is the center of this captivating piece of Chinese history.

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Watch this space: a day at CCTV America

If one were to explore the upper reaches of the cable television universe between the hours of 7 and 9pm Eastern, they might be mistaken for thinking they had stumbled upon a public television broadcast of BBC World News. They would see the same modern, red graphics; an international ensemble of anchors and guests; and a stately presentation free of soundbites and focused on the hard news that never quite make American nightly newscasts at all or with any real appreciation of their complexity. But it wouldn’t be the BBC’s logo that one would see, but that of CCTV: China Central Television, live, in English, broadcasting from Washington, and with every intention of not only superficially modeling the BBC, but ultimately rivaling its influence in every corner of the globe.

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The limits to Obama and Xi’s smiles

Earlier this year, the New York Times reported on a heated exchange between a group of American officials and their foreign counterparts. The Americans, the paper reported, denounced the other side as “deceitful, disrespectful and arrogant… The fact that you ask for ‘mutual respect’ is nothing short of laughable.” Surprisingly, the target of such strong criticism was not, say, China, but Canada, to whom New York State officials were expressing their frustrations over the ironically titled Peace Bridge that connects the two countries. Such negative language belies the very strong affinity Americans and Canadians have for the other, despite a host of trade, environmental, and other disagreements. But it is exactly this strong affinity that counterintuitively allows for direct, even heated, engagement that ultimately facilitates agreement.

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Does America need a stronger China lobby?

Since the normalization of relations between the People’s Republic of China and the United States, China, consistent with the normal practice of international relations, has traditionally engaged the US political system through the executive branch. In the past decade, however, China has initiated efforts to significantly deepen its relationship with Congress. The intensification of Chinese engagement with Congress is driven in part by a shift in the nature of economic relations between the two nations as Chinese entities seek to enter the US market, but is also attributable to a moderation in support from US corporations which have historically lobbied on China’s behalf. Despite China’s heightened engagement with Congress, its influence remains modest. Going forward, the risk of more volatile bilateral relations driven by hostile congressional actions would suggest the need for further cultivation of Sino-Congressional relations – not simply for China’s sake – but for that of the US as well.

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Finding true north in a nonpolar world

The most popular narrative of how the global balance of power is shifting emphasizes the end of the United States’ “unipolar moment” and the return of a multipolar order in which rising powers vie for influence alongside the European Union and the United States. Such a reversion depends upon the assumption that the traditional role of the nation-state will remain unchanged. This is not likely to be the case. As Richard Haass, former president of the Council on Foreign Relations notes, the state is increasingly challenged from all sides: above from global organizations, below from militias and empowered citizens, and from the side from nongovernmental organizations and corporations.

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