China Caucus Blog

Posted by The Congressional China Caucus | December 02, 2014

Hong Kong Protests: Occupy Central Founders to Surrender to Police. “Three founders of the pro-democracy protest group Occupy Central with Love and Peace called on Tuesday for students to end their occupation of city streets, even as student leaders vowed to continue protests. The middle-aged leaders of the Occupy movement first raised the idea of using civil disobedience in the former British colony to press for democratic reforms last year, but student protest groups have been at the forefront of the two-month-long street demonstrations—and student leaders on Tuesday quickly rejected the idea of abandoning their encampments. In an emotional plea on Tuesday, the Occupy leaders said they feared clashes between protesters and police were escalating at a dangerous pace and urged the students to stand down. The Occupy leaders also said they planned to surrender to police on Wednesday over their role in the mass demonstrations. “In past few days, we can see the police are increasingly out of control. We don’t know how much more violence they would impose on occupiers. We hope occupiers retreat from the protest sites,” Occupy leader and law professor Benny Tai told a press briefing, jointly attended by the other co-founders of the Occupy group, Chan Kin-man, a sociology professor, and the Rev. Chu Yiu-Ming. By surrendering to the police, “we will bear the legal consequences and hope the students will retreat,” Mr. Tai said in a prepared statement. Cardinal Joseph Zen, the former head of Hong Kong’s Catholic Church and a core supporter of the Occupy group, said he would surrender to the police together with the trio Wednesday. No pro-democracy lawmakers announced plans to turn themselves in.  Mr. Chu, 70, the eldest of the Occupy leadership trio, tearfully recounted the sorrow he felt over seeing images of police beating young protesters with batons and forcibly dragging away the demonstrators to stop their actions.  “This all made me, this old man, deeply sad. Many times, I knelt down on my knees to pray for God to protect us. And I hope all participants of this movement could safely go home,” he said.” http://online.wsj.com/articles/hong-kong-protests-occupy-central-founders-to-surrender-to-police-1417508139

Taiwan’s President Resigning As Party Chief After Election Losses. “President Ma Ying-jeou of Taiwan will step down Wednesday as chairman of the governing party, the Kuomintang, following its landslide defeat in local elections, the party announced Tuesday. Mr. Ma, who is more than halfway through his final four-year term, will formally announce the decision Wednesday at a meeting of the party’s standing committee, the Kuomintang said. “Facing such an unprecedented defeat, as party chairman I am willing to carry the greatest blame,” Mr. Ma said in a statement issued by the party. “I am not reluctant to give up this post. What I truly care about is what’s best for the Kuomintang.” The Kuomintang suffered heavy losses in voting for more than 11,000 local government posts on Saturday, leaving it in control of just six of Taiwan’s 22 counties and municipalities; it had previously controlled 15 of them. The losses, which triggered the resignation of Prime Minister Jiang Yi-huah, included the capital, Taipei, and Taichung, both key party strongholds. The opposition Democratic Progressive Party, or D.P.P., took control of 13 municipalities and counties, including four of Taiwan’s largest cities. Ko Wen-je, a surgeon, won the Taipei mayor’s race as an independent but had the support of the D.P.P. The victories by the party and its allies suggest it could have a strong chance of winning the presidency in 2016.” http://www.nytimes.com/2014/12/03/world/asia/taiwans-president-resigning-as-party-chief-after-election-losses.html?_r=0

Chinese Firm Gets Big Cache of U.S. Government Documents in Unprecedented Exchange Over Wind-Farm Dispute. “The Justice Department has delivered hundreds of previously concealed documents to a Chinese firm that President Obama had blocked from buying Oregon wind farms because they are near a sensitive military base. The delivery to Chinese-owned Ralls Corp. of 3,487 pages of government material tied to the dispute was completed Friday under a July federal appellate ruling that Obama’s unexplained 2012 rejection of the sale had denied the Chinese-owned company constitutional due process. Analysts said it was the first time the government had given a foreign purchaser documents underlying the deliberations of the Committee on Foreign Investment in the United States, a secretive inter-agency committee, known by its acronym CFIUS, that vets such sales for national security risks. Christopher Brewster, a Washington lawyer with Stroock & Stroock & Lavan who represents Chinese and other firms seeking to buy American companies, said the document dump was significant even though the materials were unclassified. “Much of this (material) will be inconsequential, but not all of it,” Brewster told McClatchy. “So this is still pretty big. CFIUS has not previously been required to fork over the documents it relies upon in its decisions.” Brewster and other experts said the move would likely spawn more foreign companies’ objections to CFIUS, which President Gerald Ford established in 1975, or at least more demands for the rationales behind its decisions. “What we can expect is more challenges when CFIUS seeks to impose mitigation agreements,” Brewster said. “CFIUS is headed into a brave, new world.” CFIUS, whose work is classified, is chaired by the Treasury secretary and made up of the heads of the Departments of Homeland Security, Defense, State and Energy, along with the Attorney General. Short of rejecting a foreign purchase outright, CFIUS often requires the buyer and/or the target company to take certain actions to protect U.S. national security -- called mitigation steps -- in order for the sale to be completed.” http://www.mcclatchydc.com/2014/11/26/248313_chinese-firm-gets-big-cache-of.html?rh=1

Once A Cop, Now An Outcast: A Chinese Tale of Abuse and A Craving For Justice. “For 12 years, the dark blue police uniform has stayed in Tian Lan’s closet. She held onto it after she was arrested for accusing two fellow officers of corruption, through beatings in interrogation and during a prison sentence that followed. She kept the uniform even as she lost her family and savings and began sleeping under a bridge. The uniform reminds her, she said, of who she used to be — an enforcer of Chinese law — and what she has become — one of its many victims. “I used to believe in the system, in its fairness,” said Tian, 56, who lives in a squalid village alongside hordes of others trying to appeal their cases in Beijing. “I was naive.” China’s legal system is so broken that a separate government agency — called the petition system — has been set up just to handle the millions like Tian who flock to its cities each year, alleging abuse and begging for intervention. An appeal of last resort, the petition system draws China’s most desperate and bitter. The clearest-eyed among them include those who share Tian’s fall from official position — former judges, court officials and police officers, now reduced to hopeless rounds of petitioning. They know how China’s secretive legal system works but have experienced the painful ways in which it doesn’t. They describe a system in which arrests are arbitrary, prosecutions are motivated by special interests and court rulings are dictated by political leaders. Distrust in the law has grown so widespread that China’s Communist Party leaders this fall announced sweeping judicial reforms after decades of dithering.” http://www.washingtonpost.com/world/once-a-cop-now-an-outcast-a-chinese-tale-of-abuse-and-a-craving-for-justice/2014/12/01/243ee950-5dde-11e4-827b-2d813561bdfd_story.html

The Caucus Brief is a daily publication for Members of Congress and Hill Staffers on China news and information compiled by the office of Congressman Randy Forbes, Founder of the Congressional China Caucus.  Email alex.gray@mail.house.gov with tips, comments, or to subscribe/unsubscribe.

Posted by The Congressional China Caucus | December 01, 2014

Leader Asserts China’s Growing Importance on Global Stage. “Sounding confident after a burst of high-profile diplomacy, President Xi Jinping told Communist Party officials in a major address here over the weekend that China would be nice to its neighbors in Asia but that he would run an active foreign policy and be relentless in promoting China’s rejuvenation onto the global stage. Mr. Xi did not mention the United States by name but took an unmistakable jab at Washington, saying, “The growing trend toward a multipolar world will not change,” a reference to the Chinese view that America’s post-Cold War role as the sole superpower is drawing to a close. China now had the power, he added, to steer world crises and turn them to China’s advantage, a declaration, analysts said, of how Mr. Xi sees China’s growing pre-eminence. This is the second time that Mr. Xi has spoken to the leadership in public about foreign policy — he did so a year ago — but his speech on Saturday, televised by the state broadcaster, CCTV, was more emphatic and sweeping, analysts said. “It reflects Xi’s passion for foreign policy and the fact that he is overseeing the final phase of the rise of China,” said Zhang Baohui, a professor of political science at Lingnan University in Hong Kong. “This is about China’s grand strategy; it’s about everything.” With the six other members of the standing committee of the Communist Party flanking him in chairs, and several hundred high-ranking party officials, military officers and Chinese diplomats brought home from abroad in the audience, Mr. Xi was making his mark as a “foreign policy president,” Mr. Zhang said. Mr. Xi has just completed two months of fast-moving diplomacy: hosting leaders of nearly two dozen Asian and Pacific nations at the Asia-Pacific Economic Cooperation summit meeting in Beijing; meeting with President Obama in the Chinese capital; and sweeping through Australia, New Zealand and the tiny island of Fiji, bestowing economic gifts along the way. China recently announced the formation of an Asia investment bank envisioned as a rival to the World Bank, and began a $40 billion long-term Silk Road infrastructure project intended to knit Central and South Asia more closely to China. Mr. Xi, particularly in his Australian visit, tried to offer reassurances, stressing that even though China was the “big guy,” as he put it, it was not a threat.” http://www.nytimes.com/2014/12/01/world/asia/leader-asserts-chinas-growing-role-on-global-stage.html?_r=0

Essential China Reading. “The Congressional U.S.-China Economic and Security Review Commission has one job: to provide a realistic view of the relationship, unfiltered by diplomatic niceties. While some of its assessments may be overstated, it always contains important information, and this year’s report is especially sobering. The bipartisan commission of experts—including intelligence veterans, former diplomats and business executives—concludes, “As a result of China’s comprehensive and rapid military modernization, the regional balance of power between China, on the one hand, and the United States and its allies and associates on the other, is shifting in China’s direction.” Across 600 pages there are many more such warnings. By 2020, when the U.S. Navy plans to station 67 submarines and surface ships in the Asia-Pacific (“budget permitting”), China could have 351. Twice this year Beijing appears to have tested a new hypersonic missile vehicle, the WU-14, that “could enable China to conduct kinetic strikes anywhere in the world within minutes to hours.” Yes, Beijing’s reach may exceed its grasp—even the U.S. faces difficulty in fielding a similar system. But the eventual payoff would be huge. Approaching speeds of 8,000 miles per hour, it “could render existing U.S. missile defense systems less effective and potentially obsolete.” Then there’s outer space, where “China likely will be able to hold at risk U.S. national security satellites in every orbital regime in the next five to ten years.” The report quotes U.S. Air Force General William Shelton to explain: “We are so dependent on space these days, we plug into it like a utility. It is always there. Nobody worries about it.” Losing space assets to China’s anti-satellite weapons therefore “would be almost a reversion” to “industrial-based warfare.” The report also bears bad news about America’s vulnerable cyber networks: “China’s cyber espionage continued unabated in 2014, despite a concerted U.S. effort since 2013 to expose and stigmatize Chinese economic espionage.” The commissioners clearly think little of the Obama Administration’s indictment of five Chinese military officers for stealing secrets from U.S. industrial firms: “China’s material incentives for continuing this activity are immense and unlikely to be altered by small-scale U.S. actions.” http://online.wsj.com/articles/essential-china-reading-1417124497

China’s CX-1 Missile Now Exportable. “China’s new CX-1 supersonic anti-ship cruise missile is ready for export to America’s friends and foes alike, with potential markets including Iran, Pakistan and African and South American countries. On display at the recent Airshow China in Zhuhai, the missile resembles India’s BrahMos cruise missile with a large intake in the nose, referred to as the “axial symmetrical inlet” in the brochure. However, that appears to be the only similarity, according to Chinese-language media outlets, which mention differences in wing, guidance vanes and jet vanes of the two missiles. Russia’s NPO Mashinostroyenia (NPOM) and India’s Defence Research and Development Organisation jointly developed the BrahMos, basing it on the NPOM’s Yakhont (P-800 Oniks) missile. Vasiliy Kashin, a researcher at Moscow’s Centre for Analysis of Strategies and Technologies, disputed Chinese media reports that denied a connection. He said the CX-1 is likely based in part on the BrahMos surface-to-surface missile, “but Russia did not sell this to China or offer enough data to China to build one.” However, Russia has sold the missile to other states in the region, including Indonesia and Vietnam, “so it is conceivable one or more of those states could have provided some details to China,” he said. Andrew Erickson, a China military specialist at the US Naval War College and coauthor of the book “A Low-Visibility Force Multiplier: Assessing China’s Cruise Missile Ambitions,” said that while the CX-1’s “precise provenance remains uncertain, the overall capabilities of China’s cruise missile industry are clearly significant.” China continues to pursue foreign technological sources actively, “but is able to combine multiple technologies and vectors of inspiration with genuine indigenous capabilities to produce major new systems of its own,” he said.” http://www.defensenews.com/article/20141130/DEFREG03/311300011/China-s-CX-1-Missile-Now-Exportable

China’s Crackdown in Hong Kong May Fuel A Long-Term Democracy Movement. “China’s Communist authorities are nothing if not predictable. With a high-profile international summit hosted by President Xi Jinping this month behind them, they are ready for authorities in Hong Kong to crack down on a pro-democracy protest movement. On Tuesday and Wednesday, thousands of police wielding batons and pepper gas began clearing one of three sit-in sites, arresting hundreds of people — including two of the movement’s top leaders. The regime calculates that President Obama, who struck deals with Mr. Xi on climate change, trade and military exchanges at the summit, won’t react to the crushing of what has been a remarkably determined, two-month-long demonstration in favor of democratic elections by thousands of students and other Hong Kong citizens. Since late September, they have peacefully occupied streets to protest Beijing’s plan to gut the promised election by universal suffrage of Hong Kong’s next chief executive by controlling the nomination of candidates. To residents of the territory, local authorities are pitching the claim that they are actually defending Hong Kong’s vaunted rule of law. The attack on the Mong Kok protest site came after a court was prompted to issue an order on behalf of a group of taxi drivers protesting the obstruction of streets. “Tuesday’s police action demonstrated the rule of law in action,” crowed the Hong Kong edition of the official organ China Daily. It won’t be surprising if the regime’s tactical maneuvering succeeds in the short term. Though Mr. Obama spoke up for the cause of Hong Kong democracy while in Beijing, the administration has been at pains to avoid conflict over the issue. The U.S. consulate in Hong Kong went so far as to issue a statement saying “we do not take sides in the discussion of Hong Kong’s political development.” Absent U.S. leadership, other Western governments have been equally timorous.” http://www.washingtonpost.com/opinions/actions-by-china-in-hong-kong-may-create-a-long-term-movement/2014/11/27/333e95cc-758f-11e4-9d9b-86d397daad27_story.html

The Caucus Brief is a daily publication for Members of Congress and Hill Staffers on China news and information compiled by the office of Congressman Randy Forbes, Founder of the Congressional China Caucus.  Email alex.gray@mail.house.gov with tips, comments, or to subscribe/unsubscribe.

Posted by The Congressional China Caucus | November 26, 2014

What Scares China’s Military: The 1991 Gulf War. “In 1991, Chinese military officers watched as the United States dismantled the Iraqi Army, a force with more battle experience and somewhat greater technical sophistication than the People’s Liberation Army (PLA). The Americans won with casualties that were trivial by historical standards. This led to some soul searching. The PLA hadn’t quite been on autopilot in the 1980s, but the pace of reform in the military sector had not matched that of social and economic life in China. Given the grim performance of the PLA in the 1979 Sino-Vietnamese War, as well as the collapse of the Soviet Union, something was bound to change. The Gulf War provided a catalyst and direction for that change. To get a sense of why the Gulf War matters for the PLA, we need to take a quick detour into organizational theory. Armies learn in several different ways; experiments, experience, grafting (taking members from other, similar orgs), vicarious learning and scanning. In 1991, the PLA lacked any relevant experience in modern warfare since the disastrous campaign against Vietnam in 1979. It lacked the funds and the political wherewithal to undertake the kind of large-scale exercises necessary for modern war. Grafting is notoriously difficult for modern military organizations, as it’s become awkward to simply hire sergeants and colonels from foreign countries. This leaves scanning and vicarious learning, both of which involve trying to learn as much as possible from the environment (scanning), and from the experiences of other armies. In 1991, the Gulf War made apparent both what worked (the United States military) and what didn’t work (the Iraqi military). It’s not surprising, in this context, that the Gulf War would have such a big effect on the PLA.” http://nationalinterest.org/feature/what-scares-chinas-military-the-1991-gulf-war-11724

Vietnam Warships Visit Philippines Amid South China Sea Dispute. “Vietnam on Tuesday showed off its two most powerful warships in the first-ever port call to the Philippines but an official said it was not trying to challenge China's superior naval forces amid tension in the South China Sea. Hanoi invited the diplomatic community to its Russian-built missile-guided frigates docked in Manila Bay at the start of a three-day goodwill visit. China lays claim to almost all of the entire South China Sea, believed to be rich minerals and oil-and-gas deposits. Brunei, Malaysia, the Philippines, Vietnam and Taiwan also have claims, creating one of Asia's biggest possible flashpoints. "We are trying to hold joint patrols and operations in the Spratlys, including search-and-rescue operations," said a Philippine naval official, referring to a disputed island chain. He declined to be identified because he was not authorized to talk to the press. "We are not trying to challenge China's naval superiority in the disputed area. We have no intention to heighten any tension. These are peaceful activities, like sharing of experiences and best practices." The two 100-metre-(330-ft-) long Russian-built warships are equipped with stealth technology to display a minimal profile on enemy radar screens. They have anti-ship missiles and anti-submarine warfare helicopters. Concern is growing about an escalation in disputes in the South China Sea even as claimants work to establish a binding code of conduct to resolve them. "We hope all sides can do more to increase mutual trust and safeguard regional peace and stability," China's Foreign Ministry spokeswoman Hua Chunying told a daily press briefing, when asked about the visit.” http://www.reuters.com/article/2014/11/25/us-philippines-vietnam-southchinasea-idUSKCN0J90FO20141125

China Says West Hampering Anti-Corruption Efforts. “A Chinese diplomat said the lack of an extradition treaty with the U.S. and the prejudices of some Western officials are hampering China’s efforts to retrieve fugitives involved in corruption cases and their assets. Xu Hong, head of the foreign ministry department on treaties and laws, said Wednesday that all major countries have an interest in stopping the flight of corrupt officials and recovering ill-gotten assets. But in China’s case, he said, the pursuit is being slowed by “prejudice and bias against us” by lawmakers and judges in some Western countries, where he said Chinese fugitives tend to go and then stall their repatriation due to a lack of extradition treaties or other limited bilateral cooperation. The problems with Western governments and officials demonstrate “their lack of understanding of China’s laws,” Mr. Xu said at a media briefing. In an extension of Chinese President Xi Jinping ’s signature anticorruption push over the past two years, the government has stepped up efforts to repatriate fugitives. A campaign launched in July by the Ministry of Public Security called Fox Hunt 2014 aims to “block the last route of retreat.” The programs involve negotiating cooperation with foreign governments to investigate and return fugitives.  The efforts have received big play in Chinese media, which say numerous suspects have been captured and returned to China, sometimes voluntarily. State-run Xinhua News Agency recently quoted a government prosecutor as saying 762 suspects in cases of using their authority as officials for criminal advantage had been brought back to China in 2013, with recovered assets valued at 10.14 billion yuan ($1.7 billion). The figures cited in the report suggested more assets were recovered in 2013 than in the previous four years combined. Mr. Xu didn’t cite any figures in a briefing Wednesday. The official said the lack of an extradition agreement, while not ideal, isn’t necessarily a hindrance to further cooperation. He hailed the successful conclusion of talks recently with Canada over an agreement that would help China recover illicit assets taken there, for instance.” http://online.wsj.com/articles/china-says-west-hampering-anticorruption-efforts-1416996064

China Looms Over South Asian Summit in the Himalayas. “When eight South Asian leaders gather for a summit in Kathmandu on Wednesday, they will meet in a conference center donated by China to its cash-strapped Himalayan neighbor Nepal 27 years ago. In the decades since it built the modernist brick and glass hall, China has massively stepped up its presence in South Asia, supplying ports, power stations and weapons. China's advance has been aided by bickering between India and Pakistan that stymies almost all attempts at integration in a region that is home to a fifth of the world's population but has barely any shared roads, fuel pipes or power lines. India's Prime Minister Narendra Modi has not welcomed Beijing's renewed suggestion its status be raised from "observer" in the South Asian Association for Regional Cooperation (SAARC), in which India is presently the only major power. SAARC summits bring together leaders from Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. Modi's hope of using the group as a counterweight to China is unlikely to gain traction at the two-day Kathmandu meeting, with officials saying Pakistan is blocking deals to increase transport and energy connections. Pakistan mooted the idea of upgrading China's and South Korea's status in the organization at a meeting of SAARC foreign ministers on Tuesday. It was quickly rebuffed by India. "We need to first deepen cooperation among SAARC, before we try and move it horizontally," an Indian foreign ministry spokesman said. He said several countries agreed. China has sent Vice Foreign Minister Liu Zhenmin and is expected to make a statement during the summit. Earlier in the week, the Kathmandu bureau of Chinese state news agency Xinhua distributed a newspaper that devoted several pages to promoting China's full membership.” http://www.reuters.com/article/2014/11/25/us-nepal-summit-idUSKCN0J928B20141125

The Caucus Brief is a daily publication for Members of Congress and Hill Staffers on China news and information compiled by the office of Congressman Randy Forbes, Founder of the Congressional China Caucus.  Email alex.gray@mail.house.gov with tips, comments, or to subscribe/unsubscribe.

 

 

Posted by The Congressional China Caucus | November 19, 2014

Hard Diplomacy Ahead Despite China Showing Its Softer Side. “From a military rules-of-the-road agreement with Washington to $20 billion in loans for Southeast Asia, Beijing has set aside the tensions of recent years to present a softer side to the world in the last week. But proof of whether President Xi Jinping is serious about narrowing differences that have marked his first two years in office will depend on how China's festering disputes are managed in the months ahead. The possibilities for disagreement are many, from cyberspying to land reclamation in the disputed South China Sea and the deeply emotional issue for China of how Japan deals with next year's 70th anniversary of the end of World War Two. China set nerves on edge with its air defense zone over the East China Sea, by sending an oil rig deep into waters disputed with Vietnam and by unveiling advanced new weapons, including a prototype stealth fighter. But in recent days, China has gone out of its way to set minds at ease as Xi hosted the Asia Pacific Economic Cooperation (APEC) summit. China made conciliatory gestures to Vietnam, the Philippines and Japan, and, with U.S. President Barack Obama, agreed to a climate deal and to lower the risk of misunderstandings during military encounters. "We still have to observe what happens in the next six to 12 months or even longer. But I think that now we stand at the beginning of a substantive change in Chinese foreign policy," said Shi Yinhong, head of the Centre for American Studies at Beijing's Renmin University who has also advised the government on diplomatic issues.” http://www.reuters.com/article/2014/11/18/us-china-diplomacy-analysis-idUSKCN0J22FK20141118

Protesters Attempt to Break Into the Hong Kong Legislature. “Demonstrators attempted to break into Hong Kong’s legislature late Tuesday night and early Wednesday by smashing windows. Police officers in riot gear used pepper spray to help quell the protest and arrested four men. Witnesses said the attempted break-in was in retaliation for court-ordered clearances of some parts of the protest area that began on Tuesday. But the main student groups leading the sit-in demonstrations that have surrounded the Legislative Council complex for more than 50 days moved quickly to distance themselves from the vandalism. Behind a police cordon at the legislature’s building were two smashed windows, one with a hole large enough for people to slip through. For weeks, the main protest area in the Admiralty district of Hong Kong has been largely peaceful, as a festive tent city gradually spread out over a wide thoroughfare and demonstrators filled their new occupied zone with art. The overnight clash marked a shift and involved at least some people from the more militant protest zone in the Mongkok neighborhood, across Victoria Harbor in Kowloon. They wore the characteristic hard hats and surgical masks of those protests. On Wednesday morning, a group of helmeted demonstrators huddled together near the police lines outside the Legislative Council, watching news reports of their attempted break-in on their cellphones. One man, a 23-year-old employee at a Japanese noodle shop who called himself Kuroros, said the action was aimed at taking over the building, just as protesters in Taiwan occupied the legislature there earlier this year. “If we keep sitting here, doing nothing, nothing’s going to change,” he said. Kuroros, who said he helped smash the windows with concrete blocks and metal rods, declined to give his real name because he feared arrest. “This isn’t about law, it’s about politics,” he said.” http://www.nytimes.com/2014/11/19/world/asia/protesters-attempt-to-break-into-the-hong-kong-legislature.html?_r=0

Can China Fall Peacefully? “The idea that China cannot rise peacefully has become something of an international-relations truism. The story here is simple: as China’s economy grows, its military will follow, and just as other great powers have used force to achieve their foreign-policy goals, so, too, will China. Yet while much ink has been spilled to explore the security implications of China’s rise, relatively few attempts have been made to examine the potential effects of a sudden and prolonged economic downturn. This might be about to change. As the Wall Street Journal recently reported, China’s growth will decline sharply in the coming decade, from 7.7 percent in 2013 to 3.9 percent between 2020 and 2025. Some analysts are more pessimistic, projecting future growth rates as low as 1.6 or 1.7 percent. (To put these numbers in perspective, China grew at an average annual rate of 10.2 percent from 1980 to 2011.) These trends have led some at the National Interest to claim that China is headed for collapse and that we may be approaching the end—not a delay—of China’s economic rise. What will be the geopolitical implications for China, its neighbors and the United States if the Chinese economy tanks? Would China be taken off of its supposed collision course, or would conflict remain unavoidable? Let’s start with a slight, but necessary, caveat: we have no empirical evidence for future events and, therefore, need theories to answer these questions. That being said, there are two that may be particularly helpful. The first theory assumes that an economic downturn in China will force the Chinese Communist Party’s leadership to turn inwards, leaving little time and energy to pick fights with its Pacific neighbors (let alone the United States). Chinese leaders will instead devote their attention to domestic policies, hoping to get their “house” in order. Unfortunately, given the scale and scope of China’s current international disputes, this story is unlikely to pass.” http://nationalinterest.org/feature/can-china-fall-peacefully-11703

China Blames Rise in Violence on Drug Smuggling From Southeast Asia. “An increase in the smuggling of synthetic drugs like methamphetamine from Southeast Asia has fueled a rise in violent crime in China this year, a state-run newspaper reported on Wednesday. In the first nine months of the year, police recorded more than 100 incidents of violent crime blamed on methamphetamine, more than the total number seen in the previous five years, Liu said. "China is facing a grim task in curbing synthetic drugs, including 'ice', which more and more of China's drug addicts tend to use," the official China Daily quoted Liu Yuejin, head of the public security ministry's Narcotics Control Bureau as saying, referring to the street name for methamphetamine. "Compared with traditional drugs, such as heroine and opium, methamphetamine can easily lead to mental problems," he added. "Addicts will be prone to extreme and violent behavior, including murder and kidnapping." Methamphetamine was being smuggled into China's southwestern province of Yunnan and region of Guangxi, both of which border Southeast Asia, the newspaper said. Last year, Yunnan police confiscated more than 9 tonnes of methamphetamine that had been smuggled in from Myanmar, while drugs have also been coming in from Vietnam, it added.” http://www.reuters.com/article/2014/11/19/us-china-drugs-idUSKCN0J304I20141119

Posted by The Congressional China Caucus | November 18, 2014

China Caps Big Week of Diplomacy. “In completing a free-trade pact with Australia, President Xi Jinping capped a whirlwind week for Chinese diplomacy that showed a Beijing comfortable seeking middle ground with wary rivals and neighbors. In a diplomatic blitz to international summits in China, Myanmar and Australia, Mr. Xi and other Chinese leaders set a détente with Japan, reached climate-change and military accords with the U.S., secured several trade agreements, offered a “friendship” treaty to Southeast Asia and smoothed the path for an international front against corruption. Taken together, the breadth and depth of these initiatives painted a picture of a country willing to, at least temporarily, put aside displays of strength and prickly admonitions. “China will never develop itself at the expense of others,” Mr. Xi told Australia’s Parliament on Monday after the signing of a free-trade pact with Canberra. His comments drew a standing ovation from lawmakers. Beijing’s latest charm offensive marks a contrast with its assertiveness in pursuing territorial claims earlier this year and surprised some observers who had gotten used to fraught ties between China and many of its neighbors. The week advanced Mr. Xi’s vision for a new Asian order centered on Beijing, and comes as the U.S. and Japan seek to offer convincing counterweights to China’s growing clout, with Washington distracted by crises in Ukraine and the Middle East, and with Japanese Prime Minister Shinzo Abe facing economic headwinds that could erode his mandate. “China has been experimenting with aid and development as a tool of soft power,” said Merriden Varrall, a China expert at the Lowy Institute for International Policy, a Sydney-based think tank. “They’re finding that—if used in the right way—it can help win warmer relations with other countries.” http://online.wsj.com/articles/china-caps-big-week-of-diplomacy-1416239570

The U.S.-China MOU on Air and Maritime Encounters. “The U.S.-China Memorandum of Understanding (MOU) On the Rules of Behavior for the Safety of Air and Maritime Encounters announced after the November 12 summit between Chinese President Xi Jinping and U.S. President Barack Obama is definitely a step forward on this vexing issue. However, it does not address the two countries’ fundamental differences on the matter and thus is unlikely to prevent some future incidents. Just last August a Chinese fighter jet intercepted a U.S. Navy Poseiden sub-hunter over the South China Sea in what the U.S. deemed a “dangerous, unsafe and unprofessional” manner. This was not the first incident involving U.S. and Chinese military aircraft and vessels nor is it likely to be the last. The U.S.-China military relationship has already been strained by the EP-3, the Bowditch, the Impeccable, and Cowpens encounters. These incidents all involved Chinese challenges to U.S. Naval intelligence, surveillance, and reconnaissance (ISR) vessels and aircraft operating in and over China’s 200 nautical mile Exclusive Economic Zone (EEZ). Clearly the U.S. “rebalancing” to Asia is coming face to face with China’s naval expansion, rising capabilities, and ambitions. Indeed, the two have converging strategic trajectories. China is developing what the U.S. calls an anti-access/area denial (A2/AD) strategy that is designed to control China’s “near seas” and prevent access to them by the U.S. in the event of a conflict – say between China and Taiwan. The U.S. response is the air-sea battle (ASB) concept, which is intended to cripple China’s command, control, communications, computer and intelligence, surveillance and reconnaissance systems (C4 ISR). This means that C4 ISR is the “tip of the spear” for both sides and both are trying to dominate this sphere over, on and under China’s near seas. The rules of behavior in the MOU’s annexes are essentially drawn from and reiterate the technical specifics of the Convention on the International Regulations for Preventing Collisions at Sea, 1972 and the related Collision Regulations, as well as the April 2014 Code for Unplanned Encounters at Sea (CUES) that deals mainly with communications protocols. Both the U.S. and China have agreed to them.” http://thediplomat.com/2014/11/the-us-china-mou-on-air-and-maritime-encounters/

China’s Top Domestic Security Chief Visits Iran to Push For Anti-Terror Cooperation. “China's domestic security chief has visited Iran to push for greater cooperation in the fight against terror, the Chinese foreign ministry said on Tuesday, as Beijing seeks allies in its efforts to maintain stability in Xinjiang. Beijing says it faces a threat from militant Islamists in its far western region of Xinjiang, where hundreds have died in unrest in the past two years or so, and has repeatedly pushed for greater regional efforts to tackle the problem. Meng Jianzhu, who leads China's anti-terror efforts, met with several senior officials while in Tehran, including Vice President Eshaq Jahangiri and Interior Minister Abdolreza Rahmani Fazl on his Nov. 15-17 trip, the ministry said. "Both sides reached important consensus on expanding and deepening China-Iran bilateral ties, especially when exchanging views on pushing law-enforcement and security cooperation," the ministry said in a statement. "China and Iran have broad common interests on fighting terrorism, and China is willing to further step up cooperation with Iran and play a proactive role in maintaining both countries security interests and promoting regional peace and stability," it cited Meng as saying. China wishes to continue with high-level exchanges with Iran and work even more closely with the country on business, trade and security links, Meng added.” http://www.reuters.com/article/2014/11/18/us-china-iran-idUSKCN0J204W20141118

China ‘Will Never Eclipse US,’ Says New Military Report. “China will never become the dominant power in Asia and its strategic rise should not determine the future structure of the Australian Defence Force, ­according to a major Kokoda Foundation report. The strategic think tank’s ­report, to be released today, is ­likely to ease fears of an expansionist China following President Xi Jinping’s pledge in Canberra that China would never inflict war upon nations in the region. The provocative report challenges the popular assumption that China’s strategic clout and economic growth will continue unabated and argues that Beijing may already be approaching the zenith of its global power. It rejects claims that the US is in decline as a Pacific power and says the fashionable belief that China will eventually challenge the US in the region is improbable. The report delivers a withering assessment of China’s military capabilities, saying the country does not have the equipment, training or experience to pose a significant threat to the region and that Chinese warships would be easily picked off by their US or Japanese counterparts. “Presently China is a regional military power entirely without any modern combat experience and with major deficiencies in doctrine, human capital and training,” it says.” http://www.theaustralian.com.au/business/in-depth/china-will-never-eclipse-us-says-new-military-report/story-fnpebfcn-1227127603541?nk=7460e771de4264169fd57d87c4377dc0
Posted by The Congressional China Caucus | November 17, 2014

Is the Long-Awaited U.S.-China ‘Reset’ Upon Us? “Expectations preceding President Obama’s recently completed trip to China were quite low. In the days before his departure, the chattering classes in America were loudly singing a chorus of doom and gloom regarding both the American leader’s policies and his country’s relationship to the Middle Kingdom. It seemed Obama was heading to his own, and America’s, funeral in Asia. All that was waiting for him in Beijing was China’s increasingly confident and blunt leader, Xi Jinping, who would surely be ready to shovel dirt upon the U.S. coffin. Predictions of Obama’s doom were bolstered earlier in the week by Xi’s behavior toward his Japanese counterpart, Prime Minister Shinzo Abe. During a staged handshake between the two men, the Chinese leader breached diplomatic protocols and allowed his face to show utter disdain and contempt toward Abe. To be fair, Japan’s top politician reciprocated. The result was an almost comical, icy stare down that looked like it was out of the old World Wrestling Federation. Given this context, anything less than an outright humiliation at the hands of the Chinese would have been a victory on the part of this greatly diminished American leader. However, a funny thing happened on the way to this anticipated denouement. Rather than being buried by China, the U.S. president managed to come to terms with the Chinese on an extensive package of agreements. In short, he made functional issues on which the two sides share mutual interests the core focus of his visit. This concentration unexpectedly made the trip one of the most substantive high-level meetings between the two sides in years. It was highlighted by an apparent deal on climate change and complemented by agreements on visas, aspects of trade and even confidence-building measures in the area of security.” http://nationalinterest.org/feature/the-long-awaited-us-china-reset-upon-us-11686

With J-31 Flight, China Makes A Statement. “When China’s stealthy, twin-engine J-31 took to the skies over Airshow China in Zhuhai last week, the skies were cloudy, but the message the country wanted to send was clear. Beijing not only plans to sell a new fighter — it also wants to sell itself on the world stage. “I think the public unveiling of J-31 certainly shows the Chinese military is now more confident and transparent,” said Wang Dong, director of the School of International Studies, Center for Northeast Asian Strategic Studies, Peking University. Beijing’s lack of transparency has created suspicion and speculation in the Pentagon and among China watchers in Washington. “This is a message of reassurance to the region,” Wang said. Becoming more transparent and revealing your top military technologies serves as a message of deterrence to potential rivals. “China’s increase in confidence and transparency should be applauded.” China plans to export the J-31; the customer lineup appears to be Iran and Pakistan. The J-31 will be the first stealth fighter available on the global market for those who face US export restrictions or cannot afford the Lockheed Martin F-35. The J-31 export revelation occurred in the AVIC Exhibition Hall after personnel unwrapped its 1:2 model of the aircraft during the preshow media tour. The placard for the model said “FC-31.” Chinese fighters are designated with a “J” for fighter and “FC” for export. This was the first time the J-31 has been referred to as the FC-31. Larry Wortzel, a commissioner of the US congressionally appointed US-China Economic and Security Review Commission, said the first public demonstration flight of the J-31 and the unveiling of the FC-31 coincides with the Asia-Pacific Economic Cooperation meeting in Beijing and the visit of US President Obama.” http://www.defensenews.com/article/20141115/DEFREG03/311150035/With-J-31-Flight-China-Makes-Statement

China’s Rise as Arms Supplier is Put on Display. “Queen Bee anti-tank rocket system. Halberd supersonic target drone. Sky Dragon 12 surface-to-air missile system. Those were among the many weapons on display in the past week at Airshow China here in this southern city adjacent to Macau, and exhibitors included an array of new and established manufacturers as China expands its arms industry to bolster its military as well as exports. China is the world’s fourth-largest exporter of arms, having overtaken France last year, according to data from the Stockholm International Peace Research Institute. Ten large state-owned defense manufacturers dominate the sector, but the government is encouraging smaller, private companies to enter the field. “The Chinese authorities have been encouraging nonstate firms to take part in the defense business in order to encourage competition and innovation in a policy known as civil-military integration,” said Tai Ming Cheung, director of the Institute on Global Conflict and Cooperation, at the University of California, San Diego. One of the new entrants is the Xi’an Tianhe Defense Technology Company, founded in 2010. The company focuses on civilian and defense electronics, including continuous-wave radar systems and advanced ocean communication. “Our boss is just a businessman,” as opposed to a former People’s Liberation Army officer, said Guo Yamei, a saleswoman. Tianhe’s president, He Zenglin, escorted an entourage of Myanmar military officials by the displays of radar systems for regional air defense. “We came here to introduce our company,” Ms. Guo said. From 2009 to 2013, China’s top arms customers were Pakistan, Bangladesh and Myanmar, according to the institute’s data. In that period, China’s share of the global arms trade jumped to 6 percent from 2 percent, while the total international arms market grew 14 percent. China is a leading supplier of major arms to sub-Saharan Africa, a relatively small but growing market.” http://www.nytimes.com/2014/11/15/business/international/chinas-rise-as-arms-supplier-is-put-on-display.html?_r=0

Hong Kong Activists Kept From Flying to Beijing. “A group of pro-democracy activists from Hong Kong were prevented Saturday from boarding a flight to Beijing, where they had hoped to lobby the Chinese government to heed their calls for free elections. The plan by the three activists, leaders of the Hong Kong Federation of Students, to talk directly with Prime Minister Li Keqiang and other officials had been certain to be rejected by the Chinese government. But the attempt to fly to Beijing represented another round in a battle of images and rhetoric that has pitted the protesters against the Hong Kong government and Beijing. In the end, the three student leaders — Alex Chow, Nathan Law and Eason Chung — did not even leave Hong Kong. Cathay Pacific, the airline whose subsidiary, Dragonair, operates the flight to Beijing that they planned to board, told them that the Chinese authorities had rescinded their entry permits, which Hong Kong residents need to go to mainland China, according to Lester Shum, another student leader. Dozens of cheering and singing supporters gathered in the airport’s departure area, many holding up yellow umbrellas, which have been an emblem of the protests since demonstrators used umbrellas to ward off police pepper spray. “I’m mystified why a great country like China would dread students entering to request a dialogue with central officials,” Mr. Chow said at a news conference after the failed attempt to board the flight. “Public opinion in Hong Kong is clear, but the government has repeatedly avoided facing up to it.” http://www.nytimes.com/2014/11/16/world/asia/hong-kong-protest-leaders-are-prevented-from-flying-to-beijing.html?_r=0
Posted by The Congressional China Caucus | November 14, 2014

Obama Seeks to Reassure Regional Allies Following China Accords.  On the heels of securing new climate, trade and military agreements with China, President Barack Obama looked to reassure America’s wary regional allies of its continued commitment to them. Mr. Obama, who attended a series of meetings Thursday in Myanmar at back-to-back summits with South and East Asian leaders, is trying to assuage concerns over Washington’s resolve in supporting its Asian partners, many of whom find themselves at odds with an increasingly assertive China. Mr. Obama’s core message is that a “good relationship with China is good for everyone,” said Ben Rhodes, a deputy national security adviser at the White House. “Countries in the region don’t want there to be conflict between the United States and China,” Mr. Rhodes said.  The new military cooperation, trade and climate-change agreements, announced by Mr. Obama and Chinese President Xi Jinping this week, came amid a period of tensions between Washington and Beijing. For most of 2014, Washington’s emphasis has been on bolstering regional alliances in the Asia Pacific, as the U.S. signed defense pacts with Australia and the Philippines, reaffirmed its commitment to defend Japan, and eased its arms embargo on Vietnam ahead of anticipated arms sales to the country, which was embroiled in a bitter standoff with China in the South China Sea earlier this year. Beijing sidestepped questions on Thursday about whether the agreements with the U.S. represented a broader Chinese effort to ease its long-simmering territorial and maritime disputes. http://online.wsj.com/articles/obama-seeks-to-reassure-regional-allies-following-china-accords-1415885505

China Extends Diplomatic Blitz to Southeast Asia. China extended its diplomatic blitz to Southeast Asia, proposing a defense hot line and greater economic aid as part of its strategy to appease nations that have been at odds with Beijing over its growing military assertiveness. Premier Li Keqiang ’s proposals, made at regional summit here in Myanmar’s capital, underline China’s carrot-and-stick approach to managing its sometimes testy relations with its neighbors—a combination of forcefulness in the South China Sea, and pledges of deeper trade and development ties with smaller nations. President Barack Obama , also attending the summit of the Association of Southeast Asian Nations, sought to assure the region that Washington’s accords with Beijing, announced this week at a separate diplomatic summit, wouldn’t alter U.S. commitment to its allies, many of which are at odds with China. Mr. Obama’s core message is that a “good relationship with China is good for everyone,” said Ben Rhodes, a deputy national-security adviser at the White House. “Countries in the region don’t want there to be conflict between the United States and China,” Mr. Rhodes said. The agreements between Presidents Obama and Xi Jinping show that “the pendulum has swung toward greater engagement” with China, said Richard Javad Heydarian, a political-science professor at De La Salle University in Manila. That “leaves the Philippines in an awkward position,” he said, because Manila has been seeking a more explicit commitment that Washington would defend the Philippines in the event on a conflict with China in the South China Sea. U.S. officials in Manila have often reiterated what President Obama said on his visit to the Philippines in April—that America’s commitment to the defense of the Philippines is “ironclad.” But it is unlikely now—against the backdrop of warming ties with China—that the U.S. would go beyond that bold-sounding, but somewhat vague, assurance, Mr. Heydarian said. Meanwhile, Mr. Obama was expected to encourage a stronger military relationship between Japan and Australia, a move that risks antagonizing China, which bristles at perceptions that its rise in the region is being challenged. The allies’ leaders were set to meet for the first time in seven years on the sidelines of summit of the Group of 20 major economies in Brisbane this weekend. http://online.wsj.com/articles/china-extends-diplomatic-blitz-to-southeast-asia-1415878290

A ‘New Type of Military Relations’ for China and the US. Yesterday, I gave a broad overview of the summit between U.S. President Barack Obama and Chinese President Xi Jinping, including worrying signs of a trend toward deep-seated structural and ideological clashes. At the same time, however, both administrations are hedging against the possibility of a drift toward confrontation by trying to deepen ties between their militaries. During his meeting with Obama, Xi called for a “new type of military relations” between China and the U.S., an offshoot of China’s broader call for a “new type of major power relationship.” In particular, Xi and Obama agreed to expand military exchanges and joint drills and to work on establishing a mutual reporting mechanism for major military operations. The two sides also agreed to continue work on a code of safe conduct for aerial and naval military encounters. As I’ve noted before, the U.S.-China military relationship is becoming more predictable even as the overall relationship is under stress. In 2010, China called off military talks altogether in response to a U.S. arms sale to Taiwan. Since then, however, high-level talks have become fairly standardized, with the U.S. secretary of defense and chairman of the Joint Chiefs of Staff exchanging annual visits with their Chinese counterparts. At the same time, joint military exercises have become more common. This year, China was invited for the first time to take part in the RIMPAC international maritime exercises held in the waters off of Hawaii. Xi and Obama’s pledge to continue to expand exchanges and joint drills is thus not a surprise. Progress on a mutual military reporting mechanism will be more difficult, but also of great importance for the overall relationship. With both China and the U.S. frequently deploying forces in the Asia-Pacific region for drills or maneuvers, it’s important for both sides to be aware of impending troop movements.  As has been argued in The Diplomat, a missile launch notification deal would also be of great use to eliminating the risk of misinterpretation and miscalculations between the two militaries. http://thediplomat.com/2014/11/a-new-type-of-military-relations-for-china-and-the-us/

Leaders of U.S., Australia, Japan to Meet, With Eye on China. The U.S. is expected to urge Japan and Australia to step-up military and security cooperation to help contain simmering territorial tensions in Asia, as the leaders of the three allies meet for the first time in seven years on the sidelines of summit of the Group of 20 major economies in Brisbane this weekend. The meeting risks antagonizing Beijing, which bristles at perceptions that its rise in the region is being challenged, but also comes as the U.S. and Japan are working to repair ties with China, while Australia is looking to deepen its increasingly important economic relations with the country. Earlier this week in Beijing, U.S. President Barack Obama and China’s President Xi Jinping in Beijing made unexpectedly significant strides in improving an often-thorny relationship, striking new climate, trade and visa agreements. Messrs. Xi and Obama also reached two new agreements designed to avert military confrontations in Asia, one on notifying each other of major activities, such as military exercises, and the other on rules of behavior for encounters at sea and in the air. Also this week in Beijing, Japanese Prime Minister Shinzo Abe shook hands and met briefly with Mr. Xi, in what was seen as a first step in a potential thaw in the chilly relationship between Beijing and Tokyo. In Australia, the U.S. president will urge Mr. Abe and Prime Minister Tony Abbott, to work more closely as a stabilizing regional influence, officials said. Canberra and Tokyo have already strengthened military ties in recent times, including a possible 25 billion Australian dollar (US$22 billion) Australian purchase of Japanese submarines. http://online.wsj.com/articles/leaders-of-u-s-australia-japan-to-meet-with-eye-on-china-1415914202

How Well Does China Control Its Military? Developments in East Asia in recent years hint at the possibility that communication between the Chinese Communist Party (CCP) and the People’s Liberation Army (PLA) is not all that it might be when it comes to coordinating military activities. Incidents such as the surprise stealth fighter test during former U.S. Secretary of Defense Robert Gates’ visit in 2011, or the 2007 anti-satellite test, are prime examples of the CCP’s leadership being seemingly unaware of what its military is doing. This suggests weakness in coordination between the center and the military, and helps explain numerous episodes where the civilian apparatus seemed oblivious to the PLA’s activities and confused about officers’ statements that made the PLA appear “rogue.” In 2009, Andrew Scobell argued for the existence of a “civil-military gap” in China’s peaceful rise. Scobell uses this expression in two ways. First, it refers to a potentially serious difference between the attitudes and perspectives of civilian and military elites based on different life experiences and career paths; second, it refers to a possible “loose civilian control of the military.” The PLA detests political intrusion by the party into its own affairs and has subsequently carved out more autonomy for itself. Thus, the claim that in recent years, “civilian CCP leaders seem to have adopted a hands-off approach to the day-to-day affairs of the PLA” seems to plausibly describe the relationship between the military and the civilian leadership. http://thediplomat.com/2014/11/how-well-does-china-control-its-military/

China’s Deceptively Weak Anti-Satellite Capabilities. In May 2013, the Pentagon suggested that a high altitude Chinese sub-orbital space launch—claimed to be a scientific mission by China—was in reality the first test of an anti-satellite (ASAT) interceptor that would reach all the way to geo-synchronous earth orbit. Previously, on January 11, 2007, China had successfully launched an ASAT missile against one of its own low earth orbit (LEO) weather satellites. These and other Chinese actions have provoked strong concerns within the U.S. about China’s motivations. James R. Clapper, the U.S. Director of National Intelligence, for example, recently told a Senate hearing that: “Chinese and Russian military leaders understand the unique information advantages afforded by space systems and are developing capabilities to disrupt U.S. use of space in conflict. Chinese military writings highlight the need to interfere with, damage, and destroy reconnaissance, navigation, and communication satellites.” While these concerns have some validity, all U.S. military satellites are not equally vulnerable to a Chinese ASAT attack. Furthermore, the benefits from an ASAT attack are limited and would not confer decisive military advantage in every plausible conflict. http://thediplomat.com/2014/11/chinas-deceptively-weak-anti-satellite-capabilities/

China's Selling the J-31, But Who's Buying? Who’s going to buy the J-31? The recent appearance of the aircraft at the Zhuhai airshow, as well as the comments of a smattering of Chinese officials, led to a spate of articles suggesting that China was interested in the J-31 primarily as an export model. Conceivably, the J-31 could occupy a low-end stealth fighter niche that currently has no other entrants. Some have billed the J-31 as China’s answer to the F-35, as if that represented some sort of compliment. It’s hardly a stretch to suggest Pakistan would be a major customer, and perhaps Egypt as well.  Beyond that?  The United States can offer the F-35 to a wide range of European and Asian countries, all of which have strong economies, big defense budgets, an appetite for high tech, and an interest in cementing the long-term technological and political relationship with the United States. Beijing doesn’t have the kind of friends that would do it the favor of buying something like the F-35. If the sanctions on Iran ease up in the wake of a successful nuclear deal, Tehran will be looking to buy advanced fighters.  If the Assad government ever manages to win its civil war, it too will need new fighters, but probably won’t be able to afford anything like the J-31.  The Gulf monarchies buy weapons in order to create political ties, and are unlikely to shift their attention from Washington to Beijing unless the international system changes in immense and unforeseen ways. Malaysia and Indonesia have been known to make adventurous decisions with respect to fighter purchases, but given the tensions in the South China Seas, it’s unlikely that China would want to significantly increase their capabilities, or that they’d want to tie themselves to Chinese support. Several Latin American countries may soon recapitalize their air forces, but the Europeans seem to have a leg up in that market, and thus far the Latin Americans seem satisfied with reliable generation 4.5 fighters. Russia and India, of course, are right out. http://thediplomat.com/2014/11/chinas-selling-the-j-31-but-whos-buying/

China and the United States Are Preparing for War.  Despite the Obama-Xi handshake deal, the probability of confrontation will only heighten as long as the PLA remains a black box. At a Nov. 12 news conference in Beijing, General Secretary of the Communist Party Xi Jinping and U.S. President Barack Obama agreed to notify the other side before major military activities, and to develop a set of rules of behavior for sea and air encounters, in order to avoid military confrontations in Asia. "It's incredibly important that we avoid inadvertent escalation," Ben Rhodes, a U.S. deputy national security advisor, was quoted by the Wall Street Journal as saying. An "accidental circumstance," he said, could "lead into something that could precipitate conflict." Should we really be worried about war between the United States and China? Yes. Over the last four decades of studying China, I have spoken with hundreds of members of China's military, the People's Liberation Army (PLA), and read countless Chinese military journals and strategy articles. Chinese military and political leaders believe that their country is at the center of American war planning. In other words, Beijing believes that the United States is readying itself for the possibility of a conflict with China -- and that it must prepare for that eventuality. Tensions are high not just because of Beijing's rapidly expanding military budget, or because the United States continues to commit an increasingly high percentage of its military assets to the Pacific as part of its "rebalance" strategy. Rather, the biggest problem is Chinese opacity. While it's heartening to hear Xi agree to instruct the PLA to be more open with regard to the United States, it is doubtful this will lead to any real changes. http://www.foreignpolicy.com/articles/2014/11/13/china_us_preparing_for_war_handshake_deal_pla_military_pentagon

China’s Reality in the US-China Climate Change Deal. The United States and China recently agreed to reduce carbon emissions in what has been called a landmark climate change agreement. This agreement followed months of negotiation. While the U.S. agreed to reduce carbon emissions by 26-28 percent of 2005 levels by 2025, China agreed to draw 20 percent of its energy consumption from alternative fuels and peak its carbon emissions by 2030. For China, the effort is plausible and may do more than analysts believe – indeed, it can be viewed as a good start toward reducing carbon emissions and promoting renewable energy. Often, the view of China’s environmental regime is negative. This is not only because China’s environment is severely polluted, but also because its track record on reducing carbon emissions is mixed. China has in the past set targets for the renewable energy composition of all energy sources. China’s Renewable Energy Law of 2007 aimed to quadruple GDP while only doubling electricity consumption by 2020. China also set a goal in the Eleventh Five Year Plan to reduce the energy intensity of GDP by 20 percent by 2010, implying a 2.8 percent annual growth rate in energy use. So far, these goals have not been met. http://thediplomat.com/2014/11/chinas-reality-in-the-us-china-climate-change-deal/

Posted by The Congressional China Caucus | November 13, 2014

China Has Now Assumed Great Power Status.  For several years, China's role in international politics has been that of an overgrown teenager: large and powerful, but clumsy and developing. And no issue exemplified this role more than in the environment. No country in the world emits more carbon dioxide than China, which surpassed the United States in 2007. But China has long claimed that because it bore less responsibility for overall carbon emissions than did the West, it was unfair to ask China to accept any reductions in emissions. China, apparently, has had a change of heart. In one of the most important deals since the two countries re-established diplomatic relations in 1979, China and the United States struck a historic, important deal on climate change at the Asia Pacific Economic Cooperation (APEC) summit in Beijing on Wednesday. The United States will reduce carbon emissions to 26 to 28 percent below 2005 levels by 2030, while in that same span, China's energy use will peak as non-fossil fuels comprise 20 percent of the country's energy profile. For several years, China's role in international politics has been that of an overgrown teenager: large and powerful, but clumsy and developing. And no issue exemplified this role more than in the environment. No country in the world emits more carbon dioxide than China, which surpassed the United States in 2007. But China has long claimed that because it bore less responsibility for overall carbon emissions than did the West, it was unfair to ask China to accept any reductions in emissions. China, apparently, has had a change of heart. In one of the most important deals since the two countries re-established diplomatic relations in 1979, China and the United States struck a historic, important deal on climate change at the Asia Pacific Economic Cooperation (APEC) summit in Beijing on Wednesday. The United States will reduce carbon emissions to 26 to 28 percent below 2005 levels by 2030, while in that same span, China's energy use will peak as non-fossil fuels comprise 20 percent of the country's energy profile. http://www.theatlantic.com/international/archive/2014/11/china-has-now-assumed-great-power-status/382690/

Beijing Summit: Xi Changes Tactics, Not Strategy. New agreements between the US and China will reduce the risks of accidental war in the western Pacific. That’s good news — but don’t imagine for a minute that it changes the fundamentals of the competition. Chinese president Xi Jinping’s summit deals with President Obama and Japanese prime minister Shinzo Abe represent Xi’s tactical decision to dial down tensions, not any abandonment of China’s strategic goals. Xi’s not even ceasing all provocative actions, such as building airstrips in the disputed Spratly Islands of the South China Sea. What’s more, the protocols on military-to-military relations in particular not only help both countries prevent unplanned clashes: They also help Xi consolidate power over his own armed forces in a way no Chinese leader has for decades. “There are probably many drivers Xi Jinping has for these agreements,” China scholar Bonnie Glaser told me when I approached her after a panel this morning at the Center for Strategic and International Studies. “One is certainly to avoid any accident that could lead to escalation,” she said, “but [also] there is an attempt by Xi Jinping to ensure that the PLA is not creating potential problems.” “It’s really not a problem of the PLA institutionally,” she emphasized: Communist Party civilians seem to have the generals under tight control. The problem, instead, is “individual operators” whose nationalistic passions might get away from them in the heat of the moment. Consider the Chinese escort vessel who nearly rammed the USS Cowpens for coming too close to China’s aircraft carrier, or the Chinese fighter pilot that did a dangerous barrel roll right over a US P-8 Orion reconnaissance plane. “This is something that Xi Jinping does not want to see reoccur, for good reason,” Glaser said. “These types of agreements signal any individual pilot or navy captain that you should not behave in a way that is dangerous.” http://breakingdefense.com/2014/11/beijing-summit-xi-changes-tactics-not-strategy/

Fruitful Visit by Obama Ends With a Lecture From Xi. The White House pushed very hard for President Xi Jinping to take questions during his news conference with President Obama at the end of their two days of meetings Wednesday. It did not want a repeat of the stilted, scripted encounter Mr. Obama had with Mr. Xi’s predecessor, Hu Jintao, in 2009 on his first trip to China as president. What the White House got was Xi Jinping, Unplugged, and that may have been more than it bargained for. Discarding his standard bromides about the importance of new “major-country” relations between the United States and China, the Chinese leader delivered an old-fashioned lecture. He warned foreign governments not to meddle in the pro-democracy movement in Hong Kong and foreign journalists to obey the law in China. Mr. Xi’s thinly concealed anger turned a news conference that should have been a victory lap for two leaders who had just had a productive meeting into a riveting example of why the relationship between the United States and China remains one of the most complicated in the world. The determination to work together belies deep-rooted historical grievances; the happy talk of win-win solutions masks a ferocious rivalry. http://www.nytimes.com/2014/11/13/world/asia/china-us-xi-jinping-obama-apec.html?_r=0

Mr. Obama and Mr. Xi strike accords while airing differences. Following a summit that produced an impressive batch of agreements on climate change, military exchanges, trade and visa liberalization, President Obama and Chinese President Xi Jinping spoke expansively Wednesday about the ability of their countries to collaborate. “China is ready to work with the United States to make efforts in a number of priority areas,” said Mr. Xi. Chimed Mr. Obama: “We’ve shown that U.S.-China cooperation can end up not only being good for the two countries but for the world as a whole.” The accords are good news, particularly for the troubled causes of preventing climate change and expanding free trade. But it was also refreshing to see that Mr. Xi and Mr. Obama did not allow their agreements and upbeat rhetoric to prevent them from airing their differences on human rights. Mr. Xi was particularly blunt, dismissing Hong Kong’s ongoing demonstrations for free elections as “an illegal movement” and declaring that “foreign countries should not interfere in those affairs in any form or fashion.” He also said Western media have only themselves to blame for their problems in obtaining visas for their journalists. Mr. Obama was more diplomatic, reiterating the U.S. “one-China” policy on Taiwan and stressing that “we are not in favor of independence” for Tibet. But Mr. Obama did bring up his discussions with Mr. Xi on human rights, saying that “we did encourage . . . steps to preserve the unique cultural, religious and linguistic identity of the Tibetan people.” He also spoke out on Hong Kong, rejecting the idea — pushed hard by Chinese state propaganda — that the United States fomented the protests and adding that “[we] are going to consistently speak out on the right of people to express themselves” and support Hong Kong elections that “are transparent and fair and reflective of the opinions of people there.” http://www.washingtonpost.com/opinions/mr-obama-and-mr-xi-strike-accords-while-airing-differences/2014/11/12/f9187dca-6a96-11e4-b053-65cea7903f2e_story.html

China Buys into the World Order—for Now. For all the chit-chat in the U.S. press, when it comes to foreign policy in particular, a President who has lost a congressional majority is anything but a lame duck. The news coming fast-and-furious out of APEC could not be stronger proof of this point. As we’ve noted on this site, China seems to have been softening its foreign policy approach in recent weeks. Some of the softer talk about Japanese Prime Minister Abe was an early sign that a new turn in Chinese diplomacy might emerge. The release of two U.S. citizens from North Korea may have been another signal that China wanted the regional temperature turned down. Today China ended the guessing game. It seems clear that China is returning to something more like its (very successful) policy under Deng Xiaoping: peaceful rise. China, at least for now, will try to avoid making waves even as its economy and its power grow. President Xi seems to have agreed with the Chinese analysts who criticized its recent turn to a harsher and more aggressive foreign policy approach. These analysts have argued that China misread the 2008 financial crisis, and acted too fast, too eagerly. The U.S. has more staying power in the region than China grasped at that time, and Japan is more of a factor perhaps than Chinese officials gave it credit for being. China is adjusting its foreign policy in line with existing realities. This is good news for everyone—except perhaps for Vladimir Putin. China will still do deals with him, but it is not going to join forces with him in an attack on the foundations of the post 1945 world order—again, for now anyway. http://www.the-american-interest.com/2014/11/12/china-buys-into-the-world-order-for-now/

China Takes Carrot-and-Stick Approach to Dealing With Neighbors. Six months after China sailed a huge oil rig into waters claimed by Vietnam, Beijing is plying Southeast Asia with pledges of investment and new business, part of a carrot-and-stick approach in its contest for South China Sea control. China’s latest tack rewards friends and punishes those who publicly contest its claims over nearly the entire South China Sea. The strategy is part of a wider Chinese vision for a more integrated Asia, with China at its center. Beijing’s push for deeper economic ties with testy neighbors promises benefits for smaller nations eager for investment. For China, such ties carry strategic significance as it seeks to ways to assuage its neighbors. The more forceful behavior under President Xi Jinping that has brought China into confrontation with both the Philippines and Vietnam is partly driven by questions over how committed the U.S. is to its Asia “rebalancing” strategy, security scholars say. Taken together, China’s neighbors with overlapping claims face difficult choices: recognize China’s ambition as Asia’s dominant power and embrace economic benefits that come with it or defend maritime claims and confront China, despite no guarantee of support from others in the region or the U.S. http://online.wsj.com/articles/china-woos-neighbors-with-carrot-and-stick-approach-1415843541

China offers ASEAN friendship, loans as South China Sea tension bubbles. China's Prime Minister Li Keqiang proposed a friendship treaty with Southeast Asian countries and offered $20 billion in loans on Thursday but held firm on the line that Beijing will only settle South China Sea disputes directly with other claimants. China, Taiwan and four members of the Association of Southeast Asian Nations (ASEAN) have competing claims in the sea where concern is growing of an escalation in disputes. "China ... stands ready to become the first dialogue partner to sign with ASEAN a treaty of friendship and cooperation," Li told leaders at an East Asian summit in Myanmar. The treaty is seen as an attempt by China to dispel any notion it is a threat and Li said China was willing to make pacts with more countries on good-neighborliness and friendship. Li also offered ASEAN countries $20 billion in preferential and special loans to develop infrastructure, an attractive proposition for a region struggling to fund the roads, ports and railways needed for growth. Still, he reiterated China's resolve to safeguard its sovereignty and its position that maritime disputes should be settled bilaterally rather than collectively or through arbitration. The Philippines, one of the ASEAN claimants, has irked China by seeking international arbitration over China's claims to about 90 percent of the South China Sea. http://www.reuters.com/article/2014/11/13/us-myanmar-asean-china-idUSKCN0IX0W920141113

China to lift aid to Pacific, sees cooperation with Taiwan allies. Chinese President Xi Jinping will offer a broad aid package to Pacific island nations at a summit in Fiji next week, a foreign ministry official said on Thursday, adding that there was also room to work with six island states not invited because of ties to Taiwan. The tiny states of the Pacific Ocean have been a source of diplomatic intrigue between China and Taiwan for decades, with each accusing the other of using "dollar diplomacy" to win recognition. China views Taiwan as a renegade province with no right to have diplomatic relations of its own, and the number of states with ties to Taipei has dwindled to just 22, six of which are in the Pacific. Xi will host the meeting of its allies on Fiji. The leaders of Fiji, Micronesia, Samoa, Papua New Guinea, Vanuatu, the Cook Islands, Tonga and Niue will attend, Assistant Foreign Minister Zheng Zeguang told a news briefing. Xi, who visits the region after trips to Australia and New Zealand, will give an "important policy speech" at the meeting, and announce "important steps" to help development, Zheng said. "During the visit, China will sign a series of cooperative documents with the leaders, as well as business agreements. They will be in the areas of financing, education, training, infrastructure and such other broad areas," Zheng said, without elaborating. http://www.reuters.com/article/2014/11/13/us-china-pacific-taiwan-idUSKCN0IX0B820141113

China’s Cyber-Theft Jet Fighter. Are the U.S. and China entering a new era of good feeling? A whirlwind of summitry this week yielded agreements to extend tourist, student and business visas, settle trade disputes over some technology products, establish new mechanisms for averting military confrontations, and limit greenhouse gas emissions—“a major milestone in the U.S.-China relationship,” said President Obama Wednesday. After strolling the gardens of Beijing’s leadership compound with Supreme Leader Xi Jinping , Mr. Obama noted that “when the U.S. and China are able to work together, the whole world benefits.” We wish we could be as sanguine, but Mr. Xi’s China remains an authoritarian state seeking to displace the U.S. and the international norms that it views as impediments to its regional dominance. That goal was also on display this week. While Mr. Xi hosted world leaders Tuesday in Beijing, his military officially debuted its new J-31 stealth fighter jet in the southern city of Zhuhai. The timing was especially bold because the J-31 is modeled on secret blueprints of the American F-35 stolen by Chinese cyber spies. Having pilfered terabytes of data about the F-35’s design and operational capabilities, Beijing scheduled the J-31’s maiden flight as if to underscore that it robs America blind with impunity. http://online.wsj.com/articles/chinas-cyber-theft-jet-fighter-1415838777

Panel: U.S. and China Differ On Standards of Transparency. The United States and China, “are operating on two different playing fields” when it comes to transparency of their military activities and intentions in the Pacific, a former senior State Department official told a security forum at the Center for Strategic and International Studies (CSIS) think tank on Wednesday. Richard Armitage — former U.S. deputy secretary of state — said thanks to the American media’s open reporting and face-to-face military interactions the Chinese have a clearer understanding of what the U.S. is doing than the U.S. has of China. “We show them everything,” said Kurt Campbell — the chief executive office of the Asia Group and a former assistant secretary of state for East Asian and Pacific Affairs. For the United States, it’s a case of “we’ll show you what we’ve got” to deter hostile actions. Bonnie Glaser — an Asia expert at CSIS — said she expects the competition is going to continue between the United States and China in the near seas off its coast even though the two countries have taken some formal steps to avoid military confrontations. In 2001 a Chinese military aircraft collided with a Navy reconnaissance P-3 Orion, and the United States plane has to land on Hainan Island. The P-3 was operating about 70 miles from the Chinese island province at the time of the collision. The American crew was detained and interrogated. “It’s taken some time to put some meat on the bones” of these agreements that include rules of the road for military surface vessels, notification of military exercises and release of documents such as the Quadrennial Defense Review or Chinese white papers on security, she said. Although China and Russia have an agreement to notify each other of ballistic missile testing, the United States and China do not. “It’s harder to talk about air-to-air encounters and air-to-sea encounters” and reach an agreement on how to handle those, she said. While most of the at-sea encounters do not involve combatants, “white hulls [Coast Guard and other nations' coastal patrol vessels] are not covered” in any of these agreement at a time when these ships are becoming larger and better armed, Glaser said. That puts into focus the, “two paradigms in conflict” in Pacific waters — keeping open sea lanes for shipments of goods, food and energy supplies and rising nationalist claims by China and other nations. http://news.usni.org/2014/11/12/panel-u-s-china-differ-standards-transparency

U.S.-China Accord Was Months In Making. Blueprint Forged by Beijing, Washington Hinges on Avoiding Sensitive Topics Such as Human Rights. The display of cooperation during President Barack Obama ’s visit with Chinese President Xi Jinping was the product of months of low-key meetings between midlevel bureaucrats who were tasked with setting up a new chapter in U.S.-China relations, according to senior U.S. and defense officials. The apparent reset in their relationship – what Mr. Xi described as a “new model” for U.S.-China relations – showed a rare moment of accord between two countries that just three months ago swapped warnings after close encounter between military aircraft. Still, the two remain far from consensus on key aspects of trade and military deals announced Tuesday, and their relationship was immediately put to the test as Mr. Obama traveled Wednesday from Beijing to neighboring Myanmar, where U.S. and Chinese strategic interests collide. At its core, the blueprint for diplomatic progress between the world’s two largest economies – forged by Messrs. Obama and Xi over the past 18 months – hinges on elevating areas of potential agreement, while showing restraint in areas of deep concern. “It’s a process of setting boundaries and then gradually narrowing in on where you can make progress,” a senior Obama administration official said. That has meant focusing on carbon emissions, military cooperation, travel and trade, while de-emphasizing for now concerns with Beijing’s Communist government and its policies toward human rights, its Tibetan minority, protests in Hong Kong and competing territorial claims in the South and East China seas. http://online.wsj.com/articles/u-s-china-accord-was-months-in-making-1415841156

U.S. Weather, Satellite Systems Hit By Cyberattack From China. Hackers from China breached the federal weather network recently, forcing cybersecurity teams to seal off data vital to disaster planning, aviation, shipping and scores of other crucial uses, officials said. The intrusion occurred in late September but officials gave no indication that they had a problem until Oct. 20, said three people familiar with the hack and the subsequent reaction by the National Oceanic and Atmospheric Administration, which includes the National Weather Service. Even then, NOAA did not say its systems were compromised. Officials also said that the agency did not notify the proper authorities when it learned of the attack. NOAA officials declined to discuss the suspected source of the attack, whether it affected classified data and the delay in notification. NOAA said publicly last month that it was doing “unscheduled maintenance” on its network, without saying a computer hack had made that necessary. In a statement released Wednesday, NOAA spokesman Scott Smullen acknowledged the hacks and said “incident response began immediately.” He said all systems were working again and that forecasts were accurately delivered to the public. Smullen declined to answer questions beyond his statement, citing an investigation into the attack. Determining the origin of cyberattacks is difficult, experts said, and Chinese officials have denied repeated accusations that they intrude in U.S. government computer systems for espionage or other purposes. Geng Shuang of the Chinese Embassy said the consulate was not aware of the case and had not been contacted by the U.S. government about the attacks. http://www.washingtonpost.com/local/chinese-hack-us-weather-systems-satellite-network/2014/11/12/bef1206a-68e9-11e4-b053-65cea7903f2e_story.html

Posted by The Congressional China Caucus | November 12, 2014

U.S., China Reach New Climate, Military Deals. China and the U.S. struck new climate, military, trade and visa agreements during a marathon two days of talks, as presidents Barack Obama and Xi Jinping made significant strides in improving an often-tense relationship. In an unexpected move, the two leaders on Wednesday unveiled substantial new commitments to curb greenhouse gas emissions, with China agreeing for the first time to stop increases in carbon dioxide emissions by around 2030 or earlier, U.S. officials said. Messrs. Xi and Obama also reached two new agreements designed to avert military confrontations in Asia, one on notifying each other of major activities, such as military exercises, and the other on rules of behavior for encounters at sea and in the air. Shortly before the summit, the two sides completed deals to issue 10-year tourist and business visas and to drop tariffs on semiconductors and other information-technology products, which backers say could cover $1 trillion in trade. http://online.wsj.com/articles/u-s-china-ready-deals-to-avert-military-confrontations-1415721451

The Faux US-China Climate Deal. The big headline coming out of the second summit between Chinese President Xi Jinping and U.S. President Barack Obama is a climate agreement the two sides reached about cutting carbon emissions in the coming decades. News stories have used sweeping language like the “historic climate change agreement” to describe the deal. This seems to greatly exaggerate the significance of the deal, at least from the perspective of China. In fact, in the agreement Beijing simply reiterates commitments it had previously announced. According to the White House, the agreement states that “The United States intends to achieve an economy-wide target of reducing its emissions by 26%-28% below its 2005 level in 2025 and to make best efforts to reduce its emissions by 28%. China intends to achieve the peaking of CO2 emissions around 2030 and to make best efforts to peak early and intends to increase the share of non-fossil fuels in primary energy consumption to around 20% by 2030.” As numerous news accounts have pointed out, this means the U.S. will cut its emissions at a significantly faster rate than it had previously announced. According to the New York Times, under the new deal the U.S. will “double the pace of reduction it targeted for the period from 2005 to 2020.” This is unimpressive compared to the commitments China made, according to the same article. “China’s pledge to reach peak carbon emissions by 2030, if not sooner, is even more remarkable. To reach that goal, Mr. Xi pledged that so-called clean energy sources, like solar power and windmills, would account for 20 percent of China’s total energy production by 2030,” the NYT article stated. http://thediplomat.com/2014/11/the-faux-us-china-climate-deal/

Beijing Aims to Blunt Western Influence in China. For decades, Jimmy Carter has been celebrated in Beijing for normalizing U.S. relations with China. The accolade helped the former president’s think tank win access to work on potentially sensitive issues like village democracy. On recent trips, he has received a different message: Steer clear of China’s internal affairs. Mr. Carter’s think tank, the Carter Center, has mothballed its domestic China programs over the past two years to concentrate on U.S.-China relations. The change came as a result of a meeting with Chinese leader Xi Jinping , people briefed on the meeting said. As President Barack Obama attends a summit in China this week, Mr. Xi is pressing a broad campaign to blunt Western, especially U.S., influence on society, academia and the media, with potentially significant consequences for the way America engages the world’s second-largest economy and new major power. Authorities have stepped up monitoring of foreign public-interest groups, and ordered some Chinese scholars to report foreign contacts and funding over the past year. Alongside has come the detention of dozens of rule-of-law activists and the intensified blocking of foreign news websites, including The Wall Street Journal. http://online.wsj.com/articles/beijing-aims-to-blunt-western-influence-in-china-1415756626

China promotes ‘Asia-Pacific dream’ to counter U.S. ‘pivot’. Chinese President Xi Jinping has a new vision for Asia, with his country at the center of affairs. It embodies what he calls the “Asia-Pacific dream” and two new “Silk Roads,” and it is backed by tens of billions of dollars in infrastructure investment, a proposed free-trade zone and vigorous diplomatic engagement. It is shaping up to be a powerful riposte to President Obama’s strategic rebalance toward Asia, often referred to as the “pivot.” Xi is using the Asia-Pacific Economic Cooperation (APEC) summit as the coming-out party for his Asian vision, just as China used the 2008 Olympics as its broader global coming-out party. Indeed, in herculean preparation and glitzy execution, the summit was reminiscent of the Games six years ago, with schools, offices and factories closed to combat the smog, and a similarly spectacular fireworks display over Beijing’s Olympic Park. But behind the show of organizing power was a more serious message, spelled out by Xi to hundreds of business executives at the summit: China’s economic development is the key to regional prosperity. As he put it: “We are duty-bound to create and fulfill an Asia-Pacific dream for our people.” http://www.washingtonpost.com/world/chinas-promotes-asia-pacific-dream-to-counter-us-pivot/2014/11/11/1d9e05a4-1e8e-4026-ad5a-5919f8c0de8a_story.html

Xi Jinping’s Rapid Rise in China Presents Challenges to the U.S.. President Obama will sit down Wednesday with the kind of Chinese leader no American president has ever encountered: a strongman with bold ambitions at home and abroad who sees China as a great power peer of the United States. President Xi Jinping has amassed power faster than any Chinese leader in decades, and his officials have cast his talks with Mr. Obama and other regional leaders this week in Beijing as another affirmation of the ascendance of China and of Mr. Xi. For over 20 years, the Chinese Communist Party elite largely made decisions by consensus, seeking to avoid a repeat of the turbulence under Mao and Deng Xiaoping. But less than two years after assuming power, Mr. Xi has emerged as more than the “first among equals” in the ruling Politburo Standing Committee, shaking the longstanding assumption that China would be steered by steady, if often ponderous, collective leadership. http://www.nytimes.com/2014/11/12/world/asia/president-xi-jinping-makes-it-his-mission-to-empower-china.html?ref=world&_r=0

Look Deeper, The Asia Pivot Isn’t Dead. Is the Pacific pivot a dead letter? Despite President Obama’s Asia tour this week, that’s certainly the impression, as senior administration officials have delayed or cancelled visits to Asia and the United States becomes increasingly involved in security crises in Europe and the Middle East. The latest evidence that the shift in focus to the Indo-Asia-Pacific may be stalled occurred last week, when Defense Secretary Chuck Hagel postponed his trip to Myanmar and Vietnam citing the need to attend to the Islamic State, or ISIS, fight and congressional hearings in Washington. The President may be able to reverse this trend through his trip to China, Myanmar, and Australia, but the narrative of a pivot on pause seems increasingly immutable. Looking from the outside in, the administration does indeed seem completely consumed with managing a number of crises, often at the expense of the Indo-Asia-Pacific region. Russia’s illegal annexation of Crimea and its subsequent invasion of the Donbas region of Ukraine have fundamentally altered – for the worse – the security situation in Europe. What most had considered a reasonable, measured policy of gradually reducing the U.S. military presence in Europe now appears downright reckless, as the Pentagon has scrambled to project rotational U.S. forces back onto the continent while the State Department ramps up other efforts to reassure allies and stabilize security in NATO’s east. http://www.defenseone.com/ideas/2014/11/look-deeper-asia-pivot-isnt-dead/98720/

Shanghai-Hong Kong Stock Connect Fuels Blue-Chip Rally in China. Beijing’s move to open the Shanghai stock market to more foreign investors next week has fueled an unusual rally among China’s largest listed companies, which have long been out of favor and blamed for the market’s doldrums in recent years. Investors have poured cash into stocks like Bank of China Ltd. , one of the country’s largest lenders, and Shanghai International Airport Co. , which has helped to send the benchmark Shanghai Composite Index up 5.1% in the past month. By contrast, they have shunned the startup firms on the once-hot Shenzhen exchange, the smaller of China’s two stock markets. The ChiNext index is down 5% over the past month. That divergence is attributable to a $49-billion program starting Monday that grants global fund managers easy access to China, but only into Shanghai’s exchange. That has led Chinese investors to turn to the exchange on expectations that foreigners will push prices even higher. http://online.wsj.com/articles/shanghai-hong-kong-stock-connect-fuels-blue-chip-rally-in-china-1415791389

China’s ‘Marshall Plan’. This week’s Asia Pacific Economic Cooperation summit in Beijing shows that Supreme Leader Xi Jinping was serious when he promised in January to become “proactive” in international affairs. Deng Xiaoping ’s maxim that China should bide its time and avoid taking the lead abroad is in the dustbin of history. This is the era of Chinese assertiveness. Mr. Xi’s vision includes a Free Trade Area of the Asia-Pacific that is broader than the U.S.-backed Trans-Pacific Partnership (TPP) , as well as two new regional development banks. Beijing will create a $40 billion Silk Road Fund to build ports, roads and rail links to link up the region, a project some have dubbed China’s Marshall Plan. http://online.wsj.com/articles/chinas-marshall-plan-1415750828

Australia’s Abbott Faces Pressure Over U.S., China Climate Plan. A deal between the U.S. and China to curb carbon emissions and other gases linked to climate change creates an unwanted headache for Australia’s Prime Minister Tony Abbott ahead of the G-20 summit this weekend, with the host having fought hard to keep climate issues off the agenda. Mr. Abbott’s conservative government in July made Australia the first developed nation to scrap climate-fighting legislation, repealing a carbon tax that the prime minister argued ahead of elections last year was an unnecessary brake on the world’s 12th largest economy without concerted international action. The plan for the U.S. and China to cut emissions is likely to see Australia and climate ally Canada cast as environmental villains at the G-20 in Brisbane—a role more usually filled by China and fellow developing powerhouse India due to their reliance on coal. Australia’s Labor opposition, which introduced Australia’s carbon tax scheme in 2012 with plans for an eventual emissions trading scheme, was quick to leap on the announcement of the deal as evidence Australia is stuck in reverse on climate measures. http://online.wsj.com/articles/australias-abbott-faces-pressure-over-u-s-china-climate-plan-1415783140

Hank Paulson Targets Climate Change Via China’s Building Codes. As U.S. and Chinese officials worked on the details of a breakthrough summit announcement on climate change, Hank Paulson was huddled with top executives from both countries to discuss how to save the planet via Chinese building codes. The former U.S. Treasury secretary has worked on the front lines of environmental protection in China for years and has the ear of the top Chinese leadership: He has been calling on President Xi Jinping ever since Mr. Xi was a provincial official and Mr. Paulson was running Goldman Sachs . Mr. Paulson is now focused on China’s massive program of urbanization, perhaps the world’s greatest environmental challenge. More than half of all the new buildings in the world are going up in China, Mr. Paulson says, and buildings account for 40% of global greenhouse-gas emissions, of which China is the biggest producer. Make them more energy-efficient and you help to fix a megaproblem. Some 100 million rural workers will move to cities before 2020. http://online.wsj.com/articles/hank-paulson-targets-climate-change-via-chinas-building-codes-1415776456

The Great Fall from Grace: Is China’s Rise Over? This week marks the two-year anniversary of Xi Jinping’s ascendance to General Secretary of the Chinese Communist Party. Xi inherited serious economic problems, underappreciated at the time, and his response thus far has been largely cheap talk. The combination of inaction and daunting challenges threatens the end of China’s economic rise. Not a delay, the end. Last month, China acknowledged a five-year low in growth of gross domestic product (GDP). Casual observers, such as former Treasury secretary Larry Summers, have turned bearish. While the new bears are right, they may not know why they are right. Chinese weakness is not one or two years old, it is eleven or twelve. The term of Xi’s predecessor, Hu Jintao, is now correctly recognized by some as an economic failure. That term dates to late 2002. In 2003, Beijing began to unbalance the economy with wildly high public investment, especially in heavy industries such as steel. Among other things, this led to pronounced environmental degradation, which limits long-term economic prospects. In 2006, China shoved aside the possibility of further market reform and endorsed state control of major sectors. In 2009, state-owned banks conducted arguably the biggest stimulus in world history, boosting lending by one-third in a single year, even as their borrowers’ ability to repay plunged due to the global crisis. Debt exploded. The weak economy is the culmination of more than a decade of bad policy. Even now, problems are being understated. http://nationalinterest.org/feature/the-great-fall-grace-china%E2%80%99s-rise-over-11649

China Flight Tests New Stealth Jet During Obama Visit. China’s military upstaged the Asian economic summit in Beijing this week by conducting flights tests of a new stealth jet prototype, as the White House called on Beijing to halt its cyber attacks. Demonstration flights by the new J-31 fighter jet—China’s second new radar-evading warplane—were a key feature at a major arms show in Zhuhai, located near Macau, on Monday. The J-31 flights coincided with President Obama’s visit to Beijing for the Asia-Pacific Economic Cooperation summit meeting. In a speech and meetings with Chinese leaders, Obama called on China to curtail cyber theft of trade secrets. China obtained secrets from the F-35 Joint Strike Fighter through cyber attacks against a subcontractor for Lockheed Martin. The technology has shown up in China’s first stealth jet, the J-20, and in the J-31. Both of the jets’ design features and equipment are similar to those of the F-35. The Chinese warplanes are part of a major buildup of air power by China that includes the two new stealth fighters, development of a new strategic bomber, purchase of Russian Su-35 jets, and development of advanced air defense missile systems. China also is building up its conventional and nuclear missile forces. http://freebeacon.com/national-security/china-flight-tests-new-stealth-jet-during-obama-visit/

China Shows Off New Sub-Launched Missile at Zhuhai. The new CM-708UNA submarine-launched cruise missile made its debut at Airshow China in Zhuhai, in the southern province of Guangdong near Hong Kong, on Tuesday. The 128-kilometer range missile is the product of the China Aerospace Science and Industry Corporation (CASIC), which also makes unmanned aerial vehicles and land-attack/anti-ship cruise missiles. A CASIC official at the display said the missile is in production. http://www.defensenews.com/article/20141111/DEFREG03/311110028/China-Shows-Off-New-Sub-Launched-Missile-Zhuhai

China Unveils New Short-Range SAM System.  Aviation Industry Corporation of China unveiled its new PL-9C surface-to-air short-range missile system at Airshow China here. With a kill range of 400-8,000 meters and an operational altitude of 30-5,000 meters, the new SAM comes in three system components: AF902 fire control system, twin 35mm anti-aircraft guns, and a missile launching vehicle capable of handling four missiles. The system is road-mobile and uses multi-element infrared passive guidance. The system is a fire-and-forget intercept systems for medium-, low- and very-low-altitude targets, including UAVs, helicopters and fixed-wing aircraft. The PL-9C is known largely as a short-range air-to-air missile for fighters, specifically the J-7, J-8 and the JF-17. http://www.defensenews.com/article/20141111/DEFREG03/311110034/China-Unveils-New-Short-Range-SAM-System
Posted by The Congressional China Caucus | November 10, 2014

What Congress Can Do To Restore the Balance of Power With China. While the United States has engaged in extended asymmetric conflict over the last decade, the People’s Republic of China has made enormous strides in its military modernization effort and now stands poised to alter the balance of military power in the Indo-Pacific region in its favor. Indeed, in a speech that gained little attention this past summer, Defense Secretary Chuck Hagel concluded that “we are entering an era where American dominance…can no longer be taken for granted.” This is a stunning admission that deserves the full attention of Congress. Here are a few thoughts on what the United States, and specifically Congress, can do in the years ahead to begin to restore this balance. http://www.defenseone.com/ideas/2014/11/what-congress-can-do-restore-balance-power-china/98528/

How the New Republican Congress Can Strengthen Obama's Pivot to Asia. Just days after the Nov. 4 U.S. midterm election transformed the American political landscape by handing control of Congress to Republicans, President Barack Obama will land in Asia for a series of summits with regional and world leaders. The timing is significant: Washington's new political constellation and the president's ability to move foreign friends and adversaries alike on key issues will define his last two years in office after recent rough patches at home and abroad. Here are five things Obama can do to turn weakness into strength over a week shuttling from the Nov. 10 Asia Pacific Economic Cooperation forum in Beijing and the subsequent East Asia Summit in Myanmar to the G-20 leaders' meeting in Australia on Nov.15 and 16. http://shadow.foreignpolicy.com/posts/2014/11/07/how_the_new_republican_congress_can_strengthen_obama_s_pivot_to_asia

How Will the Midterm Elections Impact Asia Policy? This week, President Obama heads to Asia following a stunning defeat for him and his Democratic Party in the midterm elections. Conventional wisdom has it that this electoral drubbing will leave the president with diminished influence abroad, as foreign interlocutors will see him as a soon-to-be lame duck without the backing of a now Republican Congress. But the conventional wisdom can be wrong. Republican control of both the House and Senate could have a significant effect on Asia policy, especially if the president and new Congress strive for a collaborative approach through 2016. First and foremost, the Republicans’ electoral win may open the door to real progress on the Trans-Pacific Partnership (TPP), a central pillar of the president’s policy of pivoting to Asia. President Obama’s key multilateral trade initiative has gotten bogged down in difficult bilateral U.S.-Japan negotiations, due in part to the Democratic Senate’s refusal to grant the president trade-promotion authority, or TPA. TPA allows the president to negotiate a trade agreement without foreign partners having to worry about potential congressional revisions to the deal after the fact. With Harry Reid no longer standing in the way of TPA come January, Washington and Tokyo may finally find a way forward, making completion of the TPP in 2015 a possibility. http://nationalinterest.org/feature/how-will-the-midterm-elections-impact-asia-policy-11635

China Sees Itself At Center Of New Asian Order. Beijing Builds Roads, Pipelines, Railways and Ports to Bind Itself to Region. In a valley flanked by snow-capped peaks on China’s border with Kazakhstan, a vision of Beijing’s ambitions to redraw the geopolitical map of Asia is taking shape. This remote outpost, once a transit point for Silk Road merchants, is where China is building one of its newest cities. Covering more than twice the area of New York City, Horgos had just 85,000 residents when it was founded in September, enveloping several towns and villages in an area known for lavender fields. China’s plan is to transform the sleepy frontier crossing into an international railway, energy and logistics hub for a “Silk Road Economic Belt” unveiled by President Xi Jinping last year to establish new trade and transport links between China, Central Asia and Europe. Horgos is a small element of China’s wider effort to bind surrounding regions more closely to it through pipelines, roads, railways and ports, say diplomats and analysts who have studied the plans it has made public. The plans also include an Asian-Pacific free-trade deal, a $50 billion Asian Infrastructure Investment Bank and a $40 billion Silk Road Fund that Mr. Xi announced last week, promising aid aswell as investment from Chinese private and state firms. In a speech to business executives Sunday, he said China’s plans would boost growth and improve infrastructure across the region to help fulfill an “Asia-Pacific dream,” echoing his domestic political slogan of a “Chinese Dream” to rejuvenate the nation. “With the rise of its overall national strength,” he said, “China has the capability and the will to provide more public goods to the Asia-Pacific and the whole world.” http://online.wsj.com/articles/chinas-new-trade-routes-center-it-on-geopolitical-map-1415559290

China’s ‘New Type’ Of Ties Fail To Sway Obama. When Xi Jinping stood next to Hillary Rodham Clinton and addressed a high-powered lunch audience on the seventh floor of the State Department nearly three years ago, he was still China’s vice president and only the heir apparent to the Communist Party leadership. But even during that visit he spoke expansively of forging a “new type of great power relations” with the United States. Now that Mr. Xi is president and has consolidated power as China’s undisputed leader, that phrase has taken on new significance. Mr. Xi used it at the shirt-sleeves summit with President Obama in California last year and has rarely failed to mention it in subsequent meetings with senior United States officials visiting China. His government has adopted it as a mantra for describing how Washington and Beijing should interact, and it is almost certain to come up again when Mr. Xi hosts Mr. Obama here this week for their second summit meeting. But if there is no doubt the phrase enjoys Mr. Xi’s personal imprimatur, it has also clearly fallen out of favor with Mr. Obama and his aides. And that could mean some difficult moments between the two leaders in the days ahead – and continuing tensions between the United States and China for years to come. There would seem to be little objectionable in Mr. Xi’s pitch for a “new type of great power relations,” which he describes as an effort to break a historical pattern of “inevitable confrontation” between world powers. But United States officials and Chinese analysts with ties to the government say Mr. Xi has a specific pattern of conflict in mind – that between a rising power such as China and an established, or declining power, which is how he sees the United States. In discussing this concept, Mr. Xi takes care to emphasize that he believes there is room in Asia for two great powers to coexist and cooperate – as long as they treat each other as equals. But if China and the United States cannot find a way to establish such a “new type” of relationship, the result could be disaster, Mr. Xi warned in a meeting with American and Chinese officials in July. http://www.nytimes.com/2014/11/10/world/asia/chinas-new-type-of-ties-fail-to-sway-obama.html

Obama Arrives In China On Trip With Complex Agenda. President Obama arrived here on Monday morning for a three-day visit that will capture the complexities of the United States-China relationship: the tensions of a rising power confronting an established one, as well as the promise that the world’s two largest economies could find common cause on issues like climate change. Touching down under skies that were a government-mandated blue – the authorities idled factories and kept vehicles off the roads to clear the air – Mr. Obama plunged into a hectic schedule that mixed the solemn rituals of a state visit with the deal-making of an economic summit meeting. Mr. Obama’s visit, his second as president, began on a promising note on Saturday with North Korea’s release of two Americans held there. Administration officials did not speculate about whether the release was timed to the visit, but it sent an unmistakably conciliatory message on the eve of talks that are certain to include the nuclear-armed rogue state. The centerpiece of the visit will be Mr. Obama’s session with President Xi Jinping in the Great Hall of the People on Wednesday, where he will encounter a Chinese leader who has moved boldly to restore the primacy of the Communist Party with a radical anticorruption campaign, an overhaul of China’s economy and a crackdown on dissent. Before that, though, Mr. Obama will meet with Joko Widodo, a plain-spoken populist whose recent election as president of Indonesia is a vivid contrast to the authoritarian ambitions of Mr. Xi. Mr. Widodo, like Mr. Obama, is here for a meeting of Pacific Rim leaders. Later on Monday, Mr. Obama was to speak to business executives from that group, the Asia-Pacific Economic Cooperation forum. He will also meet leaders from 11 countries involved in trying to create the Trans-Pacific Partnership, an ambitious American-led trade pact that would be a central pillar of Mr. Obama’s “strategic pivot” to Asia. http://www.nytimes.com/2014/11/10/world/asia/obama-arrives-in-china-on-trip-with-complex-agenda.html

Obama urges China to be partner in ensuring world order. U.S. President Barack Obama said on Monday a successful China was in the interests of the United States and the world but Beijing had to be a partner in underwriting international order, and not undermine it. Speaking to growing concerns among U.S. and other companies about the Chinese business environment after arriving in Beijing, Obama also urged China to reject the use of cyber theft for commercial gain and create a more level playing field where policy is not used for the benefit of some firms over others. Obama's trip to China for an Asia-Pacific summit comes at a time of growing China-U.S. friction with Washington trying to expand American interests in Asia while Chinese President Xi Jinping demonstrates more willingness than his predecessors to demonstrate Beijing's clout on regional issues. The two countries have disagreed in recent months on a range of topics, including trade, maritime issues and cyber security, while the United States has lobbied against the setting up of a multilateral infrastructure investment bank sponsored by China. "Our message is that we want to see China successful," Obama told a news conference. "But, as they grow, we want them to be a partner in underwriting the international order, not undermining it." Obama and Xi will meet over dinner on Tuesday night and then for bilateral talks as part of an official state visit on Wednesday. http://www.reuters.com/article/2014/11/10/us-china-usa-idUSKCN0IU16C20141110

Frosty Meeting at APEC Could Be Start of Thaw Between China and Japan. The meeting between President Xi Jinping of China and Prime Minister Shinzo Abe of Japan lasted only 25 minutes, less than half the time usually given to formal encounters between the leaders of two nations. The names of the tiny islands in the East China Sea that are at the core of their frosty relationship did not pass their lips. The two leaders tried a new beginning on Monday at the Great Hall of the People in Beijing, but the atmosphere could hardly have been cooler. Their countries’ flags, often the backdrop for such diplomatic meetings, were conspicuously absent, lest they convey an impression of amity. And the body language? At the outset of the meeting, before they were seated, Mr. Abe spoke to Mr. Xi. The cameras caught the Chinese leader listening but not answering, turning instead for the photographers to snap an awkward, less than enthusiastic handshake. “Obviously Mr. Xi did not want to create a warm or courteous atmosphere,” said Kazuhiko Togo, director of the Institute for World Affairs at Kyoto Sangyo University. “It was a very delicate balancing act for Xi.” If the Chinese leader smiled too much, he would antagonize the nationalistic audience at home, which has been led for more than two years to believe that Mr. Abe is not worth meeting, Mr. Togo said. If he glared, he would sour world opinion. The long-awaited encounter came three days after the two countries agreed to a formal document in which they recognized their differing positions on the East China Sea, including on the waters around the islands known as the Diaoyu in China and the Senkaku in Japan. The two sides said that “following the spirit of squaring history” — an oblique reference to Japan’s brutal occupation of parts of China during World War II — they would seek to overcome the problems in the relationship. http://www.nytimes.com/2014/11/11/world/asia/leaders-of-china-and-japan-hold-long-awaited-meeting.html

Abe, Putin Agree to Improve Ties Despite Sanctions. The leaders of Japan and Russia agreed to continue deepening bilateral ties through a range of steps--including a visit by Russian President Vladimir Putin to Japan next year--even as Tokyo faces pressure to cooperate further with Western nations in imposing sanctions over Moscow’s intervention in Ukraine. Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe met late Sunday in Beijing ahead of an Asia-Pacific Economic Cooperation summit, their seventh bilateral meeting since Mr. Abe took office in December 2012. In the 70-minute session, the two leaders discussed joint efforts on energy and the environment, cooperation on national security, and North Korea’s weapons-development program. The lack of progress in bilateral relations with Russia has frustrated Mr. Abe, who has viewed resolving a long-standing territorial dispute and deepening economic ties with Japan’s northern neighbor as one of his top foreign-policy priorities. That became difficult as the U.S. and European nations began to tighten sanctions against Moscow and to pressure Japan to follow suit. http://online.wsj.com/articles/abe-putin-meet-ahead-of-apec-summit-1415560145

Japan’s Abe says Trans-Pacific Partnership trade talks with U.S. are near ‘final stage.’ Japan’s prime minister has affirmed his commitment to reaching a broad trade deal with the United States and 11 other Pacific Rim nations, even as Tokyo stands accused of refusing to budge on the thorny issue of agricultural tariffs. The Trans-Pacific Partnership free-trade agreement is a crucial component of Shinzo Abe’s plans to revive Japan’s economy after two “lost decades” of stagnation and falling prices, and the prime minister says reviving the economy is his top priority. “My mission is to make sure that the Japanese economy really gets out of the deflation that has continued for more than 15 years,” Abe said this week during a wide-ranging interview with Lally Weymouth, The Washington Post’s senior associate editor, in which he talked about relations with China and the United States and his vision for the economy. The economy is a political life-or-death issue for Abe, who has been able to advance his foreign policy agenda — including plans to allow Japan’s military to shake off some of its post-war shackles — partly because the economy was improving. But boosting growth through freer trade has proven elusive for Abe. TPP negotiations between the United States and Japan, the two largest members of the bloc, have stalled, partly over Japan’s reluctance to open its agricultural markets. The tariff on imported rice is 778 percent. http://www.washingtonpost.com/world/japans-abe-says-tpp-trade-talks-with-us-are-near-the-final-stage/2014/11/07/24ba0b42-63a8-11e4-ab86-46000e1d0035_story.html

A Fresh Start for Pacific Trade. President Obama has long paid lip service to free trade, but he has refused to challenge opposition by Democratic Congressional leaders beholden to protectionist labor unions. The Republican takeover of the Senate is a chance for Mr. Obama to revive his trade agenda, and this week’s Asia-Pacific Economic Cooperation summit in Beijing is a good place to start. After skipping last year’s APEC summit in Indonesia, Mr. Obama will arrive in China with little to show for another 12 months of U.S.-led negotiations toward a 12-country free-trade accord known as the Trans-Pacific Partnership. TPP was supposed to be the economic centerpiece of the Administration’s pivot to Asia and also its most promising growth initiative. But U.S. talks with Japan, its most important TPP partner, have bogged down over agriculture. Meanwhile, China, which isn’t a TPP party, has pushed a separate accord that would involve all 21 APEC countries but is far less ambitious. To regain momentum this week, Mr. Obama could explain his plans to secure so-called trade promotion authority from Congress. Such “fast-track” authority would force U.S. lawmakers to vote yes-or-no on a final TPP accord without the ability to force amendments. It would thus smooth the way to passage and, as top U.S. trade negotiator Michael Froman wrote recently in Foreign Affairs, “give U.S. trading partners the necessary confidence to put their best and final offers on the table.” Hopes for fast-track died in the Democratic Senate after Majority Leader Harry Reid announced his opposition. Now Mr. Obama has an opportunity to demonstrate some political and policy goodwill by calling for passage of fast-track authority within the first 100 days of the next Congress. http://online.wsj.com/articles/a-fresh-start-for-pacific-trade-1415577301

No Longer Business as Usual in China. China is changing the rule book for business, forcing multinational companies to figure out how to play a new game or risk losing out on the world’s second-largest economy. When China joined the World Trade Organization 13 years ago, the government welcomed foreign companies, eager for their factories and technology. Now China is using its growing economic and financial muscle to dictate new terms, as dozens of American, European and Japanese businesses face scrutiny for corruption, monopolistic practices and, most recently, tax evasion. With heads of state and corporate chieftains in Beijing for a major economic summit this week, China’s increasing economic nationalism is expected to be heavily debated. The squeeze on multinationals has coincided with President Xi Jinping’s consolidation of power and his increasingly nationalistic and sometimes confrontational stance toward China’s neighbors and the West. “If any leader wants to push for economic cooperation,” said Li Cheng, the director of the John L. Thornton China Center at the Brookings Institution, “he’s really taking a serious political risk.” http://www.nytimes.com/2014/11/10/business/international/no-longer-business-as-usual-in-china-.html

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