Post a Comment On: China Matters

 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!