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February 01, 2010

Comments

Geez, Eric, you seem to think that American foreign policy should have some connection with reality and be conducted in a manner consistent with its long-term best interests, when in fact it is conducted in a manner to advance the party currently in power's domestic polical interests, which requires alot of "We're #1" whooping along with assorted chest beating and the odd JDAM or 100,000.

Get with the program!

I think it's a mistake to conclude that China does not need the US but the US needs China, or that the US's decline from unipolar power to biggest among equals makes it powerless.

Also, if you read the entirety of Clinton's remarks, they are hardly inflammatory or sabre-rattling:

I have a question about China: China is becoming a major global problem; I think one of your first trips was to China, and not only in economic terms. So which is the new – where is the best framework, institutional framework to not only accommodate China, but to engage it? Is it United Nations? Is it G-20, is it G-2, or EU-China bilateral relations, or maybe a mix of all that? Thank you.

SECRETARY CLINTON: I think your last point is the right point. It needs to be a mix of all that. I think that there are many different institutional arrangements that would be beneficial to include China in. There are Asia-Pacific institutions that – like ASEAN, APEC, East Asia summits – that are important for China to play a role in and to be better connected with their neighbors. The G-20 is an attempt to better manage the range of problems that no existing institution on its own can do. The G-8 left too many people out. The UN is often not able to function on an ongoing basis the way that we would like. But the UN also has a tremendous capacity to bring China in around the table.

So I think that the short answer is we should try many different approaches. It will be increasingly important for China to become more transparent about its military ambitions and budgets. It is difficult to create and sustain military-to-military engagement with China, but I think every institution you just named, plus bilateral relationships, should try to include that. It will take time, but I think it’s very important.

I think that China has certainly made clear that it’s willing to participate more on a range of issues than it had before. During our negotiations about sanctions for North Korea, obviously the United States, South Korea, and Japan were committed to moving forward to try to alter North Korea’s behavior. But after study and consultations, so was China – a remarkably positive step for them to take. And they have been equally responsive with respect to the enforcement of Security Council Resolution 1874 which embodies those sanctions.

With respect to Iran, thus far, the P-5+1, which as you know is France, Germany, United Kingdom, EU, United States, Russia, and China, has been united. Now, as we move away from the engagement track, which has not produced the results that some had hoped for, and move toward the pressure and sanctions track, China will be under a lot of pressure to recognize the destabilizing impact that a nuclear-armed Iran would have in the Gulf, from which they receive a significant percentage of their oil supply, that it will produce an arms race; other countries will feel the necessity to seek their own nuclear weapons programs; Israel will feel an existential threat to its very existence. All of that is incredibly dangerous.

So the argument we and others are making to China is we understand that right now, that is something that seems counterproductive to you, sanction a country from which you get so much of the natural resources your growing economy needs, but think about the longer-term implications.

We have in the last year worked very hard to establish what we call a positive, cooperative, comprehensive relationship with China. We will always have disagreements, as we will with probably any country, even a close friend like France. But with China, we want the relationship to continue despite the disagreements. So that’s – for example, if we arrange a meeting between our President and the Dalai Lama, that is a difference in perspective, a respect for his religious leadership, and we do not think it should derail the relationship.

But this is kind of a learning experience for all of us, including China. China has emerged as a global leader on the world stage at a time when the world is so much more complicated. I mean, if we were in a bipolar world, everybody would know what they were supposed to do. But we’re not. So China is, like the rest of us, trying to figure out how do you protect your national interests and yet recognize the consequences for your national interests from actions outside your borders, and cooperate with others to achieve goals that actually are in your interests? It’s a complicated equation for all of us today.

We had an incident I’m sure you’ve read about concerning Google and concerns about actions constraining information, which we very forthrightly presented to the Chinese in public and in private, but I made the additional point that as China grows, they will have companies that will operate globally, that will need the same kind of protection that we expect for our companies operating globally.

So we’re asking for kind of an over-the-horizon view, which is always the hardest thing to do in politics, because politics is about the moment, unfortunately, too often. But I think that it’s this kind of engagement and respectful sharing of views that is at the heart of any kind of coordination or cooperation with China.

Hardly the no-holds-barred, screw-China approach that it is being portrayed as here.

I think it's a mistake to conclude that China does not need the US but the US needs China

Yes, a massive mistake. And one that I certainly will never make.

or that the US's decline from unipolar power to biggest among equals makes it powerless

Absolutely. Powerless is an exaggeration in the other direction - farther than even the most exaggerated unipolarist. We're quite powerful, but not quite as powerful as we were. And even then, at our apex of power, many overestimated its scoper and durability. We just need to recalibrate, not capitulate across the board.

Hardly the no-holds-barred, screw-China approach that it is being portrayed as here.

Her words are exactly what I said they were: a pointless threat. They are not "screw China" or "no-holds-barred" flamethrowing. But, again, I never said they were.

They were a threat that we can't keep, pointlessly blustery and, it should be noted, returned in kind by China over Taiwan issues. So it got their notice, and the threat was enough to provoke a response.

They were a threat that we can't keep

My point is that they werent a threat at all. Clinton suggested that it's in China's best interest in the long term to keep Iran from going nuclear, even if in the short term they're getting oil from them. She certainly didn't IMO threaten China with "economic insecurity and diplomatic isolation". It's unclear from the text what the threat was supposed to have been- perhaps you'd care to point it out?

I think it's a mistake to conclude that China does not need the US but the US needs China

Yes, a massive mistake. And one that I certainly will never make.


But
In reality, the United States is financially and economically dependent on China, a country that holds nearly $1 trillion in U.S. debt and is an indispensable trading partner. We are hardly in a position to weaken ties to China.

Saying that wo observing that this precisely holds for China leans in that direction IMO. China is hardly in a position to weaken ties with the US, either. Maybe you thought that this went without saying.

And the hypothetical connection between Clinton's comments and the Chinese criticism of the very recent arms sales to Taiwan is exactly that. I could criticize Obama's SOTU statement about the banks on the same post hoc reasoning (ie since it occurred before the Chinese criticism, it must have caused it).
btw Eric, since the cause of China's upset appears to be actions in Taiwan rather than mild rhetoric about Iran, perhaps you'd care to let us know what your suggested policy is vis a vis Taiwan? That's the real problem here IMO.

Maybe you thought that this went without saying

I did.

I could criticize Obama's SOTU statement about the banks on the same post hoc reasoning

True. And China likely would have criticized regardless, but they seemed to mimic the criticism, and specifically mentioned the Iran issue in this context. Which, IIRC, is a new twist.

She certainly didn't IMO threaten China with "economic insecurity and diplomatic isolation".

The language was more careful, but her words were read as a threat in diplomatic circles where reading between the lines is par for the course. Her discussion came in the context of whether or not China was diplomatically plugged-in via various bodies, and the suggestion is that China will be under pressure to comply, and if not, face consequences.

Maybe you thought that this went without saying

I did.

So we are still very powerful. More so than the Chinese, at least for the moment.
Yet their much more aggressive blustering statement doesn't seem odd to me; both sides want good relations, but both sides also have distinct agendas. And both sides will use the positive and negative pressures than they can bring to bear.

I don't see why you conclude that the US is toothless. It seems that you think the US ought to not try sanctions against Iran, but that is a separate discussion from whether the US has tools available to pressure other nations to go along with it.

Don't get me wrong- unipolarism is willfully blind and incapable of working in today's world. But just as with the discussion over Iran, you are willing to assume that this is the administration's stance. Clinton's statement seems very balanced to me: recognizing China's rising power, former cooperative successes, and still willing to call China out on eg Tibet. There is no hint there of a US desire or ability to impose its agenda on the world.

CW: Clinton's statement does not come in a vacuum. There have been statements lately that have hinted at the subject matter and the tone has been inching up. That's part of why the Times and other sources interpreted her words this way.

I don't see why you conclude that the US is toothless. It seems that you think the US ought to not try sanctions against Iran, but that is a separate discussion from whether the US has tools available to pressure other nations to go along with it.

Not toothless, but not willing to leave a tooth on the bar room floor, or under the pillow, in order to get what it wants. Cost/benefit. We'd be better off recognizing that China's far more interested in its needs vis-a-vis the Gulf, and that it won't change for the low bounty that we're offering. Nor our veiled threats (or cautionary tales).

I just think our hectoring/lecturing makes us look foolish, especially because our actions are much more inflammatory vis-a-vis Taiwan.

We'd be better off realistically assessing the globe (same with Pakistan vis-a-vis Afghanistan/the Afghan Taliban), and adjusting accordingly.

"the United States is financially and economically dependent on China"

This is (IMHO etc) fundamentally untrue, though a very popular statement to make recently.

Substitute "reliant" for "dependent" and you're onto something. But "dependent" implies that the financial and economic stability of the United States would be overthrown if trade with China ceased. A look at the figures ought to disabuse anyone of this idea.

2008 figures: US exports to China, $70bn. US imports from China, $338bn. A reasonable assumption is that the effect on GDP of exports is (say) 3x the dollar value of the exports (from suppliers, employee spending, support activities, etc). So, US exports to China represent maybe $210bn of the US economy. Chinese exports to the US represent maybe $1,014bn of the Chinese economy.

US GDP in 2008 was $14,441bn. So, activity from US exports to China represented 1.2% of the US economy.

Chinese GDP in 2008 was $4,327bn. So, activity from US exports to China represented 23.4% of the Chinese economy.

So, what would be the effects of a total cessation of trade with China? The US economy would suffer a 1.2% hit from reduced exports, and would have to make up $1,014bn in production or imports from other countries. Luckily, the US economy is currently running with a massive amount of slack and high unemployment, so making up a trillion dollars in output would actually be very easy right now, by a combination of increased production in the US and increased imports from other countries. However, there is no question that there would be an initial price shock for the low-end goods imported from China, and there would likely be a long-term increase in the prices of those goods because the Chinese economy is a very low-cost producer. The effects on low-income Americans would be mixed: the prices of low-end goods would be higher, but there would be a massive increase in employment and wages inside the US as it replaced the imports. The 1.2% drop in activity from exports would almost certainly be made up several times over in increased activity in substituting for Chinese imports.

Now let's look at the effects of a total cessation of trade on China. China's economy would suffer an immediate hit of about 25%. The effects would be catastrophic. On top of that, a cessation of trade would mean that the future-oriented foreign investment and joint partnerships that are currently in place to produce export goods to the US would end. (Those oriented to the domestic market and other foreign markets might continue, but with the economic disruption this would cause I wouldn't be betting on the domestic market anytime soon.) The loss of the imports from the US on China would be more damaging than the loss of Chinese imports to the US, because China is the lower-technology partner in the trade. China does not buy anything from the US that it can make itself, so you can bet that everything that it imports has some vital economic function. The US on the other hand imports lots of things from China that it could make itself, because it's cheaper (and a sensible division of labor).

China would implode if trade with the US ended. All of the export-oriented industries would be instantly bankrupt. A quarter or more of its economy would disintegrate. There would be mass unemployment; there would be huge inflation as the factories that currently produce goods both for export and the internal market would have to raise domestic prices to make up for the lack of foreign earnings. (The way it often works right now is that a factory will produce 40,000 widgets - 10,000 for the US market sold for $10 each, and 30,000 more for the Chinese market sold for $1 each.)

That's economics. Now financials. China currently buys a large number of US treasury bonds, which helps make US borrowing cheap and US taxes low. But China does not even compose the majority of US treasury purchases. In 2008 China bought $375bn in US treasuries; other central banks bought $650bn; and private investors bought over $1,000bn in treasuries. So Chinese purchases of treasuries amount to about 1/6th the total purchases. If China ceased to buy treasuries, the cost of US borrowing would presumably increase to compensate. However, that change would presumably be fairly small since China is responsible for a fairly small proportion of US treasury purchases. Even if that change was larger, though, the US could compensate and push prices back to where they are now (nearly zero) by reducing borrowing by $375bn a year. To do this, it would need to increase taxes of some kind by $375bn. The effect of this on the US economy would be a increase in taxation of 2.6% of GDP. This would not be a trivial change. It would be painful. But it would be no more painful than a recession year in which output dropped by 2.6%. Coincidentally, 2009 was a recession year in which output dropped by 2.7%. Was it painful? Yes. Was it disastrous? No. The US could survive a total cessation of Chinese purchases of Treasuries.

These are the facts. You can argue about the multiplier effects on the economy - maybe you think less than 25% of the Chinese economy is reliant on exports to the US - but it's certainly the case that more than the dollar value of the exports depends on it, and the dollar value of the exports alone is 7.8% of the Chinese economy.

Certain American companies would suffer more from a cessation, and others would suffer less. Wal-Mart would be hurting. US & foreign manufacturers of low-end goods would be in paradise.

This is not to say that cessation would be a good thing. It would be a bad thing for the US. It would be the end of the Chinese state as we know it for the Chinese.

I have more to say on the US/China issue, but I'll have to get back to it. But I think it's important to really understand the facts and figures of Chinese trade with the US before expressing an opinion as to whether dependency relationships exist, and which ways those dependencies flow.

The sad fact is the institutionalized class in DC is simply out of touch with the worlds realities. They are all playing a game set up a while ago by much smarter people and in a much different time. They have forgone looking at things from an other country's perspective or adapting to changed geo-political situation but instead devote themselves to "message sending" and "showing leadership" and assorted other empty phrases and gestures lost in a martini haze and a vague recollection of President Reagan. At least when we're not bombing them that is.

CW: Diplomatic threats are always phrased in subtle language and require reading between the lines. Diplomacy with China has always been considered a realm of special subtlety.

Consider this response to President Bush, who criticized China's behavior on religious and political rights:

We firmly oppose any words and deeds that use human rights and religion to interfere in other countries' internal affairs.

The Chinese people enjoy religious freedom according to law. That's a basic fact evident to all.

With regards to differences between China and the United States on rights and religious issues, we have always advocated that the two sides should carry out dialogue and exchanges on the basis of equality and mutual respect.

Roughly translated, this means:

Go f*ck yourself!

Or to put it more succinctly, if we're standing in front of a big red button, and if when the button is pushed, I get a nasty electric shock but you die, which party is the one "dependent" on neither of us pushing that button?

That doesn't make pushing the button a very good idea. I use the cessation case to illustrate the maximum possible impact, and to show that any measures short of that will proportionately affect China a lot worse than they will affect us. And since there are things we want from China, we might be willing to accept a certain amount of pain in order to encourage them to cooperate, knowing that the amount of pain that China feels from such measures is much greater than the US does.

Doesn't mean that's a good idea in any given case; doesn't mean that there aren't dangers in pressuring China because it is likely to be a peer competitor in a few decades, and remember who its friends were; but it does mean that the idea that China is right now the superior partner in any negotiation is completely mistaken.

JD: Basically, we're locked in with each other, and neither is in a position to pull the plug. Or press the button. Or what have you.

On Taiwan arms sales, what we sold were defensive weapons. Taiwan has no capacity for and no intention of invading China. Taiwan is not a military threat to China.

China doesn't like it when we sell weapons to Taiwan. Why not? Is it because they're afraid that Taiwan will invade them? No. It doesn't like it because it would one day like to invade and conquer Taiwan. Let's not beat around the bush here. It has pretty much said it wants to do so numerous occasions, and on not a few occasions in the past has actually tried to do so. Now... that's fine. The United States invaded and conquered a bunch of what it considered breakaway provinces about 150 year ago - though admittedly ones that posed a real military threat to the US. The desire to invade and conquer what you consider rogue parts of your own territory is a natural ambition for any large country.

But the fact that it's a natural ambition doesn't mean it's a very good idea, nor does it mean that the US should simply stand aside idly picking its teeth while a peer rival for world power prepares to fight a war of territorial conquest.

Much, much more importantly, actually, the US should not appear to be willing to stand aside if it actually is not willing to do so in the event that China decided to invade Taiwan. That is bad mojo indeed. That is how really big, really bad wars get started. If the US is actually going to go to war over Taiwan if China invades - and I think it is very likely that it is - it had sure as hell better make it perfectly clear to China that that is the case well in advance of China deciding to do so. It can't make China refrain from invading Taiwan. But it can make it perfectly clear that the US is willing to incur substantial costs - in disapproval from China, for instance - in order to defend Taiwan.

Sometimes the right thing to do is to piss off another major power in order to demonstrate where the lines in the sand lie. Russia certainly does not like NATO. It doesn't like having a dozen countries on its doorstep where the US has bases and allies and gigantic stockpiles of weapons. US relations with Russia would be much more comfortable if none of that was true. But since the US actually is committed to the defense of Europe from Russia, it would be a big mistake to, yes, "appease" Russia by refraining from doing things to upset them.

And similarly it would be a big mistake to let China think that the US is not committed to the defense of Taiwan when in fact it is. A really big mistake that would likely end with me & my whole family being killed by Chinese nuclear missiles landing on Oakland airport. Since I think that outcome would be, what's the word... bad? - I think that upsetting China a little over Patriot missiles in Taiwan is probably worth it.

Eric: Basically, we're locked in with each other, and neither is in a position to pull the plug. Or press the button.

No, I disagree. China is not in a position to pull the plug or push the button. The Chinese state would cease to exist if they cut off trade with China, and the Chinese economy would collapse. There would be chaos and very likely civil war.

The effects on the US would be relatively minor. It would be a bad year, or a bad few years. But it would not be the end of the US system of government and civil war.

The point is not that either party would want to push the button. The point is that looking at the case of pushing the button - cessation of trade - shows that one country would die if it did so and the other one would get a nasty shock. So, any measures along those lines short of a total cessation would have proportionate effects on the two economies. A 50% cut in trade? Relatively trivial for the US. A disaster for China. 25%? 10%? Wherever you want to draw the line, it hurts China a lot more than it hurts the US, and China will do a lot to reduce the pain that it feels from such proportional measures. In that situation, describing the US as "dependent" is just not true. It is China that is dependent. The US is, maybe, "reliant". The status quo is "convenient". But "dependent"? No.

JD: And how would we feel toward the sale of defensive weapons to say, Iran. Or Cuba. Or Venezuela?

No, I disagree. China is not in a position to pull the plug or push the button. The Chinese state would cease to exist if they cut off trade with China, and the Chinese economy would collapse. There would be chaos and very likely civil war.

The effects on the US would be relatively minor. It would be a bad year, or a bad few years. But it would not be the end of the US system of government and civil war.

So you're saying the dollar would be fine after a year or two? If China dumped its dollar holdings? Really? How come minor moves to diversify currency holdings seem to cause so much consternation in the markets?

Perhaps you are focused entirely on trade, when I was talking about trade plus debt holdings/currency holdings?

Russia certainly does not like NATO. It doesn't like having a dozen countries on its doorstep where the US has bases and allies and gigantic stockpiles of weapons. US relations with Russia would be much more comfortable if none of that was true. But since the US actually is committed to the defense of Europe from Russia, it would be a big mistake to, yes, "appease" Russia by refraining from doing things to upset them.

That depends on how you define "Europe" doesn't it? I mean, when push came to shove, we weren't going to really risk conflict with Russia for Georgia's sake. And yet we probably gave Georgia false hope and encouraged very bad behavior on their part that led to overreach and smackdown.

The same is possible with Taiwan.

Basically: we need to pick and choose where and when. Sometimes it is 100% worth it and in our interests. At other times, not so much. Failure to delineate can lead to more harm than good, not least than for the people that we would ultimately like to help.

CW: Clinton's statement does not come in a vacuum. There have been statements lately that have hinted at the subject matter and the tone has been inching up.

I'm wondering if you can point to some of those statements. I'm thinking, like Carleton, that the Taiwan deal is the main cause of this, and, like a couple that has been together for a long time, China is yelling at the US for one thing when it is really mad at something else (perhaps you have not been married long enough to recognize this)

If China dumped its dollar holdings? Really?

China can't dump its dollar holdings without exploding its own financial system. But even if it could, my inexpert reading of the experts is that it would be a survivable situation. There are emergency capital controls that could keep them from trading, the US can always raise taxes to reduce borrowing, and US allies are likely to cooperate in resisting such an effort to crash the dollar (since doing so would destroy their own exports to the US and cause enormous economic disruption to them). Admittedly this is an area where the effects are much murkier and I am on shakier ground, and certainly people in the know have been known to be nervous about it, but a lot of them have also said "This cannot actually happen". At a less catastrophic level, proportionate reductions in purchases, or net selling of dollar assets could push the dollar's value lower... but given that we're well under production capacity and have a large trade deficit right now that would probably be good for the US economy overall, not bad. Nobody - not the US and not China - wants to disrupt the current situation. But again, who hurts worse in the event that it is disrupted? I think it's China, not the US.

And how would we feel toward the sale of defensive weapons to say, Iran. Or Cuba. Or Venezuela?

... doesn't China actually sell weapons to all of those countries? So how do we feel? Well, I think when it comes to Cuba and Venezuela we don't much care, since we have no intention of invading them, and they are unlikely to start a regional war themselves. Iran, that's more complicated. We don't like it - but we don't take extreme measures against them (or Russia) for doing so.

when push came to shove, we weren't going to really risk conflict with Russia for Georgia's sake. And yet we probably gave Georgia false hope and encouraged very bad behavior on their part that led to overreach and smackdown

True that. But Georgia was not part of NATO, and Russia understood that, and in fact we were not willing to go to war to defend Georgia, and Russia understood that too. Now, say, Poland? That's a whole different story.

Taiwan is also not Georgia. It has been much more temperate than Georgia, and it has little that it wants from China except to be left alone.

More to the point, the US is very, very likely to go to war to defend Taiwan, which it was not willing to do over Georgia. Or do you think that's not the case? I can't say I can completely explain the difference, but I think the difference is very distinct. Taiwan's de facto independence has been a longstanding American interest; action by China against Taiwan would be a much worse sign than the fairly limited Russian action against Georgia was. It's different and China should be aware that it's different.

My fear is that the situation with China in this century will develop the way the situation with Japan did in the 20th century. Japan made a mistake in underestimating both the willingness of the US to pay the price and suffer the casualties of a war with Japan, and the relative military-industrial capabilities of the two countries. One reason it did so is that the US mostly stood by while Japan went on a rampage of conquest in Asia. Would it have been better for the US to counter Japan earlier on, before it was so committed to that course of action? I think so - after all, the US ended up having to undo all that conquest in the end anyway.

Now in this century China is the Asian power feeling its new place on the world stage and its new industrial might. The last thing the US wants is war with China. But it would be a huge mistake for China to make the same kind of assumption about where the tripwires are for America that Japan did, or to assume prematurely that it could prevail in a proxy or live war with the US, and it would be a mistake for us not to make perfectly clear where those tripwires are, not just the ones where doing so is cost-free, but also the cases where doing so upsets China somewhat. And I think for the sake of preventing a future war or minimizing the scale of such a war, that it is important that those clearly-delineated tripwires be very close-in to China, the way they were for Russia during the Cold War, and that the "freedom of action" for Chinese military adventurism be as confined as possible, preferably to the point where it is quite apparent that China has nothing to gain from large military spending over the next few decades, and much to gain from peaceful trade; if and when Chinese GDP approaches that of the US, we would like them to be so intertangled with commercial and cultural relationships that war seems insane. The US needs to do some things to move to that situation too, including making it clear that it does not threaten Chinese sovereignty over its actual territory, and working to show that a peaceful world can tolerate a great China with substantial influence on world affairs. But one thing it also needs to do is make sure those tripwires are so obvious that nobody can miss them.

What? That makes no sense.


"Europe" in the last post is defined as "NATO members"--particularly, Estonia, Latvia, Lithuania--and the United States would absolutely go nuclear if Russia were to invade those states. This is, in fact, the entire point of a military alliance. And yes, this means starting World War III if necessary, because if we fail to defend a NATO member state then the word of the United States government is completely and utterly meaningless.

Georgia was not a NATO member. And for good reason.


Also, it is disingenuous to equate the US selling weapons to Taiwan to a hypothetical sell of weapons to Venezuela or Iran.

Last I checked, the Republic of China remains under the US nuclear umbrella, and we are still bound to come to its defense in case of a Chinese invasion. Last I checked, neither Venezuela, Cuba, nor Iran had nuclear defense treaties with the People's Republic of China.

This is interesting, the war, however, is alreaady underway. The largest players in the world are fighting for economic domination and two of them, China and India, have a stated goal to "win" the war. The US has a stated goal to be a successful part of the worlds economy. These are different goals.

It would certainly not be in China's interest to risk the huge gains it has made in the war it wants to win, with a reckless military fight. So it's only military threat to us is the potential for arming our potential enemies to drain our resources, but certainly not encouraging a proxy war.

Their ability to impact our economy and currency are dangerous in the long run, but there is little short term risk as we are still their greatest export partner. As they develop Africa and South American markets that will displace us as their largest trading partners, our risk will increase. We should be in a race to develop those markets in our favor, but we continue to focus on the perceived brass ring of China. But they will out produce us by a lot before they come close to having an open enough economy for us to actually compete there.

However, the point is that our foreign policy should be to compete aggressively economically. Militarily we are down to cleaning up terrorists, demented dictators, tribal factions and religious zealots, conceding that there is some overlap between those categories.

As a general rule, a nation should avoid making threats that it cannot back up.
but
Not toothless, but not willing to leave a tooth on the bar room floor, or under the pillow, in order to get what it wants. Cost/benefit.

I think that your position is really that it's not to our benefit to push China on Iran, and that this is coloring your perception of our ability to do so. We can't do so without suffering consequences, admittedly, and Im certainly not sure that it's worth that price, but that's a very different scenario from saying that we can't really do anything to pressure China.

Really, it's not that we're not willing to lose the tooth- it's that you don't *want* us to be willing, because you disagree with the policy goal.

... doesn't China actually sell weapons to all of those countries? So how do we feel? Well, I think when it comes to Cuba and Venezuela we don't much care, since we have no intention of invading them, and they are unlikely to start a regional war themselves.

Members of the Bush administration tried to construct a casus belli out of that (but fortunately failed).
---
It took the British monarchs 243 years to drop their claim to the throne of France after losing their last foothold on French soil (and the Jacobite pretenders still formally keep the title of King of France today) and only after the French monarchy ceased to exist. So, why expect Washington to drop their claims to dominating the Greater Middle East before the end of the 22nd century or before there's no oil left in the region? ;-)

The largest players in the world are fighting for economic domination and two of them, China and India, have a stated goal to "win" the war. The US has a stated goal to be a successful part of the worlds economy. These are different goals.

Marty, can you point us to where these goals have been so stated by the countries in question?

I think that your position is really that it's not to our benefit to push China on Iran, and that this is coloring your perception of our ability to do so. We can't do so without suffering consequences, admittedly, and Im certainly not sure that it's worth that price, but that's a very different scenario from saying that we can't really do anything to pressure China.

Really, it's not that we're not willing to lose the tooth- it's that you don't *want* us to be willing, because you disagree with the policy goal.

Well, the second paragraph seems to be saying something different than the first. But to be sure, there might be something we could do to force China. There is always "something." But implicit in any such analysis is a cost/benefit analysis. So, to clarify: there is nothing that we could do that would be remotely worth it in costs incurred.

And guess what: China knows this.

China can't dump its dollar holdings without exploding its own financial system.

But that came in the context of you suggesting that we cut off trade with them, thus causing their country to erupt in revolution. At such a point, I think they'd be willing to roll the dice. And the consequences to us would be devastating - including loss of reserve currency status.

But to the extent that you say neither side wants economic war, you are correct. And we are not in a position to incur the costs of such war over something like this. And China knows it. Hence, we are not in a position.

More to the point, the US is very, very likely to go to war to defend Taiwan, which it was not willing to do over Georgia. Or do you think that's not the case?

I don't think that's the case actually. But I'm not in favor of abandoning Taiwan either, or making that reticence known to China. Just that we should think through our baseline objectives and adjust accordingly. We're in a curious dance with China and Russia at the moment: both containment and engagement.

...doesn't China actually sell weapons to all of those countries?

Not in any significant number to my knowledge. Haven't checked on Cuba in a while, but the other two I'm pretty sure.

Georgia was not a NATO member. And for good reason.

And yet there was ambiguity about our commitment to defend - and much talk about fast-tracking NATO membership. Which led to Georgia's overreach, which was my point.

Nothing in my discussion with JD on this point relied on a strict definition of Europe or NATO countries. I was merely pointing out that along the fringes, misinterpretation can lead to bad outcomes.

The largest players in the world are fighting for economic domination and two of them, China and India, have a stated goal to "win" the war. The US has a stated goal to be a successful part of the worlds economy. These are different goals.

Oh, those nasty world-gobbling Indians and Chinese! Oh, those humble un-greedy ever-virtuous Americans, who would never dream of taking more than their share of the pie!

http://www.theglobalist.com/StoryId.aspx?StoryId=6356>Illustratively:

Asked whether President George Bush believed that changing lifestyles was an answer to America’s energy woes, White House press secretary Ari Fleischer was unequivocal in his response.

“That’s a big no,” he said. “The president believes…it should be the goal of policymakers to protect the American way of life. The American way of life is a blessed one.”

And, what Uncle Kvetch said.

LJ: I'm pretty sure the Taiwan deal was the main irritant, it's just that they mimicked our language which seemed to be an intentional poke about our Iran carping.

Some recent history is discussed here (especially the pdf):

http://www.raceforiran.com/china-understands-its-interests-on-iran

Well, the second paragraph seems to be saying something different than the first. But to be sure, there might be something we could do to force China. There is always "something."

I think you're being obtuse here- we don't need to force China in that sense (ie making them an offer they can't refuse); Iran is not the most important issue to them by any stretch of the imagination. So China does not need to have Iran pried from their mouth like a dog with a bone, they just need a suite of (once again) carrots and sticks that make letting go more attractive than not.
Now, the price there is still probably more than we'd want to pay (we're much more likely to succeed with Russia than China), but it's not like we'd have to threatened to use military force or to destroy our mutually-necessary financial/trading relationship.

CW: I guess.

But, ultimately, the act of brandishing sticks big enough to get China to change course would, in its own right, be an act that incurs significant costs.

I'm not quite sure what we could offer. We could certainly trade the Taiwan chip.

But in essence, we're saying the same thing:

At its root, the US does not have the leverage to compel China to act at acceptable costs. And China, again, knows this quite well.

The reason I asked for some more specific language is that I have a strong suspicion that the same kind of language has been used between Japan and China on numerous occasions, but I don't think anyone reaches for the smelling salts here, even though China is ostensibly more problematic because North Korea has a much closer linkage to China.

I've worked my way thru the links (though I didn't see a pdf), but it seems that a lot of this stems from the way the NYTimes reported Clinton's speech. And given the way the Times has always botched explaining things in relation to China, it points to a long running trend of the the paper of record unable or unwilling to look beneath the surface.

Your post seems to take issue with what the US is doing, that somehow, the rather bland statements of Clinton, because they are responded to with a sound and fury by the Chinese media (which has always taken a rather nationalistic tone in response to, well, everything) means that somehow, Clinton and the administration is at fault. It is always hard to say what is going on behind the scenes but given the furore is over a response to a question rather than something actually set out in the speech, I think you are overreacting. I tend to take Fallows line, which is that China is stumbling around on this and other issues with bluster.

Fair enough LJ. YMMV. I just agree with Larison and Katcher on this - that making such hollow threats is pointless, and counterproductive.

More important: the sooner we recognize that China will not be with us on Iran, the better. And lecturing and threatening China will not change their position.

But in essence, we're saying the same thing:
At its root, the US does not have the leverage to compel China to act at acceptable costs. And China, again, knows this quite well.

I agree, I think. There may be more room here than I expect, it depends on how China views its relationship with Iran & their views on the Iranian nuclear program. If you accept the premise that sanctions are a good idea (or that credibly threatening sanctions is a good idea), then it's worth exploring with the Chinese.

Where we disagreed was over interpreting Clinton's remarks; they didn't strike me as Bushian blustering. I mean, we can't force China to do *anything*: play nicely with the internet, treat Tibet decently, go along with sanctions over Iran, etc. But we still want to discuss those areas of disagreement, and try to move forward on them. Sometimes, that involves publicly recognizing the disputes.
If I take your specific position here, it seems that you'd either also be opposed to Clinton's mentioning google or Tibet (or any other human rights issues), yes? Since we can't compel cooperation & it just makes us look weak to bring them up without the muscle to do so?

CW: I'm of several minds. I'd have to see how it's done, and in what context.

they didn't strike me as Bushian blustering

True. Perhaps my tone was heavy-handed in its own right.

(No time to reply in more detail, but I was certainly not suggesting that the US should cut off trade with China! In talking about that extreme situation, I was seeking to illustrate that the proportional harms of changes in the relationship fall much more heavily on China, and that the idea that the US is therefore dependent, or the weaker partner in any negotiation is mistaken. For instance, a 1% drop in trade with China hurts China much more than it hurts the US. On currency dumping, in the extreme case it is very hard to say what would happen. That would be a worldwide economic emergency and things like emergency capital controls could be expected to take effect, as would defensive actions by US authorities and almost certainly US allies, who would not want to see the dollar crashed. As for ending the status of the dollar as reserve currency, under conditions of such economic strife, the historical status of the dollar as a safe reserve would be a countervailing force to any dumping of Chinese reserves. As we've seen with the peripheral Euro countries in the recent economic troubles, there is a tension between the large stable economies like Germany and the peripheral countries that are more sensitive. The US at least has one political and economic system for the dollar, which is part of why it's such a safe bet, and would remain a safe bet even in times of trouble.)

Yeah, the real "evil empire" is finally winding down. Thank God

I'm not quite sure what we could offer. We could certainly trade the Taiwan chip.

Wait, what does this mean?

What are we "trading"?

The longstanding security guarantees given to a democracy of 23 million people?

If the US obtained firm and effective control of the Mideast oil fields, or even of just the Iranian oil fields, the situation would change. It would tilt the playing field in favor of the US, especially if the US handled the situation intelligently and was willing to share the oil.

If we're really going to have a clash of empires, we'd better learn to be effective imperialists. Deciding not to play could be deciding to lose.

I'd much rather have World Peace and have everybody sing Kumbaya together. But that is looking less and less likely. So Pax Americana is the best result we can hope for.

The systems of China and Iran are outright tyranny and do not intend to democratize; They must not be allowed to grow.

Wait, what does this mean?

What are we "trading"?

The longstanding security guarantees given to a democracy of 23 million people?

I wasn't actually recommending that. I was merely pointing out that our inducements are limited. Invoking Taiwan was actually a way of saying the costs are too high.

that making such hollow threats is pointless, and counterproductive.

You know, if the US knows that the Chinese aren't going to let us do anything, these sorts of hollow threats are the point in that they allow the US to position itself as supporting the Green Revolution with no cost whatsoever. And as much as I like Larison, I find a thread of isolationism there that just doesn't seem to make sense for the future.

LJ: That's possible as long as it doesn't raise tensions. Likely, both sides recognize them for what they are. But the problem is, some people in both camps either might not, or might have an interest in trying to hype their significance. China has its neocons too ;)

But all in all, I think there are better ways of expressing solidarity with the Green movement than pushing China to impose sanctions on Iran when most of the Green movement's leading lights don't want the sanctions in the first place.

"Last I checked, the Republic of China remains under the US nuclear umbrella, and we are still bound to come to its defense in case of a Chinese invasion."

Where did you check? As I read it, the Taiwan Security Enhancement Act (http://usinfo.org/sino/taiwan_enhance.htm) commits us to selling Taiwan the weapons it needs to defend itself, and that's it.

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