The most sensible people to be met with in society are men of business and of the world, who argue from what they see and know...

-William Hazlitt

Interesting Times at the Committee for the Republic
Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
 | September 10, 2013
Washington DC

I’ve written a book called: “Interesting Times: China, America, and the Shifting Balance of Prestige.” “Prestige” is the aura of power, the aspect of it that makes others want to be seen in your company. The balance of military power has not shifted, but the balance of prestige between the United States and China has. That makes a real difference, but how much of one?

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I’m not going to rehash my book, but I will speak briefly tonight about three things: (1) how far China has come and where it’s headed; (2) whether China is able or willing to displace the United States as the global hegemon; and (3) the notion of our shifting our strategic attention more toward East Asia, which, of course, presupposes that we somehow restrain our seemingly irresistible impulse to start new wars in the Middle East.

First, a few words about Chinese progress. China has had a couple of bad centuries, but it’s back, and it’s on track soon to regain its millennial status as the largest economy in the world. Chinese think that’s the natural state of affairs. It is only the speed with which it has happened that they find remarkable. And it is.

When I first visited Beijing in 1972, GDP per capita there – in today’s dollars – was about $130. Last year, it was almost $14,000, with purchasing power equivalent to about $21,000. That’s a more than 100-fold increase in the wealth of the average Beijinger!

In 1972, Taiwan’s 16 million people had a GDP slightly larger than the China mainland’s 875 million. The Chinese economy is now expected to surpass ours in purchasing power terms by 2016, when we hold our next presidential election. China will almost certainly overtake us in nominal exchange rate terms before the 2021 centennial of the founding of the Chinese Communist Party. Not long ago, the Economist magazine predicted this will happen in 2018, but falling growth rates both here and in China may have altered that calculation.

In 1972, China’s worldwide imports and exports came to a grand total of $6.3 billion, including US-China trade of about $95 million. Last year China’s trade in goods alone was $3.9 trillion. US-China trade in goods and services came to $536 billion.

There was no investment by either country in the other in 1972. Now there is investment by American companies everywhere in China. Our states and localities are pushing for some sort of Open Door policy for Chinese investment in the United States. A Chinese company is about to bring home the U.S. bacon and Smithfield ham, and, with them, better standards of food safety for Chinese consumers.

In 1972, there were no Chinese tourists or students in the United States or anywhere else. A few hundred Americans visited China. This year there are over 200,000 Chinese studying here. Almost 2 million Chinese tourists will visit and over 2 million Americans will go to China.

This has become a very consequential relationship and it’s becoming more so. Having just waxed uncharacteristically numerical, I want to assure you that, while there are many references to facts and figures, there are no dreary charts and graphs or statistical recitations in “Interesting Times.”

The book does, however, explore how China transformed itself by inventing something I call “cadre capitalism” – otherwise known as “socialism with Chinese characteristics.” Ideological skittishness means that cadre capitalism is not much analyzed in China. Ideological preconceptions make it greatly misunderstood here and elsewhere abroad.

Cadre capitalism links local boosterism to economic entrepreneurship and then links both to the promotion of individuals to higher levels of the Party hierarchy. It creates self-interested, selfish partnerships between local officials and business people. They collude to advance local political, economic, and commercial interests over those of other such partnerships elsewhere. This drives so-called state-owned enterprises to ferocious competition with each other and everyone else.

Cadre capitalism makes doing business in China quick and easy for those who understand and participate in it and hard for those who don’t. It’s a unique artifact of Chinese culture. It can’t be exported as a model or borrowed abroad. Perhaps that’s just as well. If corruption is at heart the result of an inability to separate personal interests from public or enterprise interests, then cadre capitalism promotes corruption as well as the energetic pursuit of profit.

China’s astonishing economic success has led lots of people to envy it. But most economists and – more important – China’s leaders believe that the model that produced this success is obsolete. The country is now entering a decade-long era of restructuring and reinvigoration to enable it to cope with the many challenges its successes have created, including huge environmental damage, overdependence on export markets, overinvestment and under-consumption, abuses of monopoly power, over-regulation, burgeoning local debt, and inadequate financial support for China’s booming private sector. China plans reforms of its monetary system, capital markets, and taxes. The list of proposed reforms has twenty-two items on it, in seven economic sectors. We won’t know the details of the first set of reforms or how bold or timid they are until November at the earliest. That’s when the Communist Party is scheduled to have its next plenary session.

I’d bet on bold ideas, implemented incrementally and cautiously. There’s a reason that Deng Xiaoping favored what he described as “feeling one’s way across a stony riverbed with one’s feet.” China has very little margin for error. It needs to tread carefully as it adopts new ways of doing things.

China’s leaders are haunted by their country’s horrifying history of pestilence, severe famine, and violent subjugation by foreigners. China must feed, clothe, and house twenty percent of the world’s people on less than ten percent of its arable land, with only seven percent of its water. For almost four hundred of the past thousand years, foreign invaders ruled China. As recently as 1931- 1945, as many as thirty-five million Chinese died as Japan tried to conquer their country. At least seventy million more died from internal rebellions and disorders over the century between the second Opium War and Deng Xiaoping’s repudiation of Mao’s totalitarian utopianism.

There is not a country anywhere on the planet that would exchange its geopolitical circumstances for those of China. China shares land borders with fourteen countries, including some very tough customers, like Afghans, Indians, Koreans, Mongols, Pakistanis, Russians, and Vietnamese. The Japanese, Taiwanese, and U.S. navies are just off China’s coasts, where the Indian navy has also begun to make occasional appearances.

China’s human and natural history as well as its geography make its leaders risk averse. They are conservative and cautious in their management of their country and its foreign affairs. Even if China had an ideology or political-economic system it could export (which it doesn’t), its leadership would still be very conscious that they can’t afford to make mistakes at home or abroad.

All this is in effect the answer to the second question I posed. Can China displace the United States as a military colossus in command of global affairs? Does it want to do so?

China’s multiple past wounds and present vulnerabilities are about as solid a guarantee as one could hope for that it will continue to be interested mainly in its own domestic tranquility and prosperity. It will continue to wait for foreigners to come to it for enlightenment, not pursue them to impose Chinese ways on them. Chinese have never been astonished by the well-known fact that foreigners are incorrigibly barbarous. If we and other benighted peoples continue to fail to appreciate the superiority of China’s way of doing things, Chinese will just write us off as boorish and uncultured. They will shake their heads in disbelief at the ignorance and poor judgment that make us foreign, and go on about their own business.

This brings me at last to “the Pivot” – the proposed rotation of American forces and shift of foreign policy attention to East Asia from points West. The first thing our government tells us is that the pivot is “not about China.” Of course it’s not about China, except when it is – or when there are no Chinese in the room to listen to us as we figure out how to turn our attention to the Indo-Pacific while simultaneously bombing Syria and/or Iran and continuing our crusade against militant Islam.

Strangely, we are having trouble convincing others in Asia that we’re really going to drop things elsewhere to help them balance China’s rising wealth and power not just now but over the long haul. We’re also having trouble convincing the silly Chinese that, despite everything we’re doing, it’s not our intention to remain in position to assault them from their own near seas or to keep them from having much say in what happens in their neighborhood. They just don’t seem to appreciate that we feel threatened by their belated attempts to complicate and frustrate foreign attack and undermine our omnipotence. We demand that China swear off all acts that undercut our ability to overwhelm it! We, not they, properly call the shots in East Asia. To underscore this point, we now propose to build a trans-Pacific free-trade zone that excludes China, even though it is every Asian and Pacific country’s largest trading partner.

The trouble with foreign affairs, I guess, is that it involves foreigners, who are by nature inscrutable and inexplicably disinclined to recognize our inherent benevolence as Americans.

The Chinese and others need to understand that we Americans have no choice. There’s no one else who can do what we can. So we must pivot to the East. God is on the side of the big economies and that’s where they’re beginning to be and that’s where China is too. We need to deploy our military to do something about this, even if it’s not clear exactly what economic problems an American military build-up might solve other than keeping our defense spending up while our allies keep theirs down. But military build-ups are as American as the Colt revolver and the Lone Ranger. So redeploy we must.

The problem is that China may be on the verge of developing an autistic government with a bloated military budget, a bad habit of exempting itself from international norms, and a preference for applying coercion rather than diplomacy to those who annoy it. Perhaps, in time, China will even develop some sort of ideology it can seek to impose on others with the fervor of a gang of Jehovah’s witnesses or democracy promoters. Some might say that our problem boils down to a well-founded fear of China becoming more like us. Does the world have room for another country that is strong at arms but a bit weak in the head and convinced that bombing foreigners is both an act of humanitarian assistance and the surest path to peaceful coexistence with them? We doubt it.

Americans who are nostalgic about the Cold War and eager to reenact it look forward to China mirroring us to become a true “peer competitor.” That may not include a critical mass of people in this room. But, just think! A China that modeled itself on America would justify sustaining our own bloated military budget, cure our enemy deprivation syndrome, and return us to the welcome simplicities of some sort of bipolar struggle for global dominance. For the leprechauns of the military-industrial complex, such a China is the pot of gold at the end of the congressional rainbow. So we propose to swing our military away from West Asia (the Middle East) and rebalance it to East Asia.

China’s bankers, unlike its military, seem curiously relaxed about this possibility. Perhaps it’s because they own so much American debt they can’t help noticing that we have a budget problem we are addressing by mindless disinvestment – cutting everything equally so as to avoid having to make choices or set priorities. If the United States can’t prepare itself for the future, make choices, or set priorities at home, why worry about it doing so abroad? As long as there’s an Israel Lobby to set Washington’s foreign policy priorities for it, what’s the real chance that China – as opposed to angry Arabs and militant Muslims – will become Enemy Number One for Americans? And, if Asia deserves more attention because it’s becoming the world’s economic center of gravity, will a militaristic “Pivot” affect that reality, or just waste money?

So the best bet in Beijing – like the worst fear of the military-industrial complex here – is that America’s “Pivot” will turn out to be just another blast of boastful babble from the Beltway bubble’s bureaucrats and their bloviating bosses. Of course, the People’s Liberation Army can’t be sure about that, so it will prepare for the worst. What this means is that China’s ability to fend us off will improve even if our ability to bludgeon it into submission doesn’t. This is how wasteful arms races are born. This time around the competition is with a country that does seem to know how to set priorities and whose economy is about to be bigger than ours. Despite our unmatched military capabilities, the “Pivot” strikes most America-watchers in China as too clever by half – more self-licking ice-cream cone than military menace. I suspect they’re correct.

Most likely, the “Pivot” will turn out in the end to have been part pirouette, part bluff, and part fiscal fizzle. That’s too bad. It is entirely appropriate for the United States to pay more attention to East Asia, including to shifting military balances. These involve more than the return of China to its pre-modern weight in regional affairs. Since 1945, Japan has achieved wealth, international respect, and an unsung but formidable self-defense capability. It has been followed on this path by the southern half of Korea, India, and most of the ASEAN nations. Countries like Singapore punch above their weight and, as Americans and Chinese have both learned, Vietnam is no pushover.

It is true that China is now rising, but there is no vacuum along its borders. The task before us is not to build a military Great Wall on China’s East and South, but to facilitate graceful adjustment by China’s smaller neighbors to its renewed prosperity and military vigor and by China to their wealth, power, and independent sovereignty. This task makes a robust American presence in the region desirable for some time to come. But adjustment to new regional realities will not be advanced by U.S. policies that obviate the responsibility of Asian nations to mount their own effective efforts at self-defense or that discourage their establishment of mutually respectful relationships with China, India, and other regional powers. If China’s behavior stimulates its neighbors to come together to limit its influence, this a problem for China, not one for us, still less a reason to expand our military presence in Asia.

Forty-one years ago, Richard Nixon reopened relations with China and ultimately catalyzed China’s return to wealth and power. Perhaps a word from the master is in order. In dealing with the changes since 1972, the United States should be guided by the Doctrine Nixon articulated at Guam on July 25, 1969. This put forward three principles:

“First, the United States will keep all of its treaty commitments.

“Second, we shall provide a shield if a nuclear power threatens the freedom of a nation allied with us or of a nation whose survival we consider vital to our security.

“Third, in cases involving other types of aggression, we shall furnish military and economic assistance when requested in accordance with our treaty commitments. But we shall look to the nation directly threatened to assume the primary responsibility of providing the manpower for its defense.”

That was sound policy then and it is sound policy now. I’d add only that, for the United States to meet the economic challenge of a rising, competitive Asia, we need policies that leverage Asian prosperity to the benefit of our own. If we try to divide Asia to suit our geopolitical convenience instead of accepting, accommodating, and buttressing its new balances of power, we will end by dividing Asia from ourselves. That would undercut both our prosperity and our global and regional influence. It would also necessitate an even higher level of defense spending than the unaffordable one we now have.

The United States, the Middle East, and China
Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
 | June 5, 2013
Remarks to the Far East Luncheon Group
I’m here to speak to you about the United States, the Middle East, and China. Given the topic, it seems appropriate to tout both my new book, Interesting Times: China, America, and the Shifting Balance of Prestige and my last one, America’s Misadventures in the Middle East. Both, I am told, will be available for sale by the publisher after my talk. I’ll be happy to sign copies of either or both of these books, if anyone is interested in my doing that.

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In foreign policy, national interest is the measure of all things. But interests, national or otherwise, are defined by the vectors of domestic politics. No region better illustrates this than the Middle East, the region that extends from the Eastern Mediterranean to Iran and Arabia. I want to speak to you today about the differing national interests of the states and peoples of this region, the United States, and China, which is emerging as a growing presence there as it is everywhere. One legacy of the Cold War is an American tendency to search for an arch adversary and cast relationships with it in zero-sum terms. As I will explain, I don’t think that is the correct prism through which to view China’s engagement with the Middle East.
But before I get to China, let me begin with a few observations about where we Americans now stand in the Middle East with regard to Arab-Israeli peace, strategic transit, energy security, markets, and the effects of regional instability on our domestic tranquility.

For fifty years, we have treated the achievement of security for a Jewish homeland in Palestine as our top priority in the Middle East. We have sought to achieve this by military aid to foster and guarantee Israeli military hegemony in the region and by diplomacy aimed at brokering acceptance of it by its Arab and Muslim neighbors. The results are in. At no small cost to the United States in terms of the radicalization of Arab and Muslim opinion, oil embargoes, subsidies, gifts of war materiel, wars, and now anti-American terrorism with global reach, Israel has become a regional military Goliath, enjoying a nuclear monopoly and overwhelming superiority in the region’s battle space. But U.S. diplomacy has definitively failed.

In no small measure as a result of its own decisions, the Jewish state has no recognized or secure borders. Although acknowledged as an unwelcome fact, Israel remains a pariah in its region. In many ways, acceptance of Israel’s legitimacy is receding, not advancing, under the impact of the racial and religious bigotry its policies are seen to exemplify. Israel appears to have decided to stake its existence on the dubious proposition that it can sustain military superiority over its neighbors in perpetuity. It has no diplomatic strategy for achieving acceptance by them. Nor does the United States.

The great American naval strategist, Alfred Thayer Mahan, was the first to call the region “the Middle East.” The age of oil had not then quite arrived. Admiral Mahan wanted to highlight the area’s strategic importance as the meeting place of Europe, Africa, and Asia and the focal point of the transportation corridors connecting Europe with the Indo-Pacific. The Middle East’s geopolitical location remains a central but largely unremarked aspect of its importance. Logistics is everything in military strategy but only logisticians seem to think about it. Without the ability to transit the Middle East at will, America would be much impaired as a global power. The maintenance of a permissive environment for such transit thus remains a vital U.S. interest. Our privileges in this regard rest on the value the region’s rulers assign to our commitment to protect them. That, in turn, depends on whether they judge that they have an alternative to the United States as their protector. It’s clear that, at present, no one else wants or can take on the role we have traditionally performed. So, though we are increasingly estranged from the region’s peoples, our ability to travel through it to other parts of the globe is not in immediate jeopardy.

When someone mentions the Middle East, most people think first of oil. The United States ceased to be a net exporter of petroleum in 1970, when domestic oil production peaked. By 2005, we were importing 60 percent of the oil we consumed. Most of this came from outside the Middle East. Still, about 56 percent of the world’s oil reserves are in that region, as is the only surge production capacity. What happens in the Middle East, more than anywhere else, determines both levels of global supply and prices. During the Cold War, the U.S.-led anti-Soviet coalition we called “the free world” was heavily dependent on imports from the region. Our economic and strategic interests combined to make secure access to its energy supplies a matter of vital concern. Our relationships with countries in the Middle East like Iran and Saudi Arabia reflected this. So did our emphasis on freedom of navigation in the Persian Gulf.

Our ability to extract oil and gas from shale and other previously unexploited sources at current price levels will alter these equations importantly. By the end of the decade, the United States may again be a net exporter of energy. Our reliance on imported oil could fall to as little as 10 percent before rebounding as shale reservoirs are depleted. But, regardless of North American progress toward energy self-sufficiency, the world and most of its major energy consumers will remain dependent on oil from the Middle East. What happens there will continue to have a decisive effect on energy prices. The availability of energy from shale means strategic immunity from supply disruptions outside North America. It does not mean independence from global markets.

What self-sufficiency does mean is that our interest in protecting access to the Persian Gulf’s energy resources will soon derive entirely from our aspirations for leadership of a globally healthy economy rather than from our own import dependency. This will raise obvious questions about the benefits versus the costs to our country of our traditional “lone ranger” approach to preventing the disruption of supplies and shipping in the Persian Gulf. I wouldn’t be surprised to find us looking for partners with whom to share the financial and military burdens of that mission in future.

The Middle East accounts for around 5 percent of global GDP. It is growing by about 5 percent annually and accounts for about 5 percent of U.S. exports. Arab cash purchases and generous taxpayer funding of arms transfers to Israel play a vital role in keeping production lines open and sustaining the U.S. defense industrial base. Including military goods and services, the United States has a substantial but declining share of the region’s imports – about one-fourth of them. By way of comparison, China’s share is nearly two-fifths and India’s one-fifth, almost all non military in nature. The Middle East is a significant market for American engineering, educational, and consulting services. Otherwise, as long as Arab oil producers’ currencies remain linked to the dollar, the region’s markets cannot be said to be of more than marginal importance to the U.S. export economy.

The Middle East has, however, become the principal focus of U.S. national security policy. U.S. support for Israel and military interventions in the region have made it the epicenter of anti-American terrorism with global reach. Israel is threatening war on Iran to preclude it from developing nuclear weapons. Although other countries in the region dislike – even fear – Iran, none supports preemptive attack on the Islamic Republic. Meanwhile, our cooperation with the region’s governments on counterterrorism is on the rise. So is the number of terrorists. There is a lot more hatred of America out there than there was before 9/11. We have added the resentment of most Sunnis to that of Iranian Shi`a, while igniting a civil war between these two sects of Islam and destabilizing the Fertile Crescent. No one can now say when or how any of this will end.

The peoples of the region share a desire for freedom from imperial or colonial dominance and for affirmation of their disparate religious, ethnic, or cultural identities. They are not much interested in our ideology or political practices but, by contrast with other regions, almost all seek foreign patrons to secure themselves against each other. Israeli Jews depend on us to support their ethno-religious uniqueness. Iranians believe that we menace their independence and cultural identity. Egyptians count on us because they do not know where else now to turn. Kurds hope we will back their self-determination. The Gulf Arabs seek our help and that of others to protect them against Israel and to balance Iranian power and preclude Persian hegemony.

Middle Eastern governments with oil or gas depend on energy exports to finance their defense and domestic welfare, development, and stability. Those without such resources seek subsidies for the same purposes. Despite varying degrees of foreign dependency, all jealously guard their independence and freedom of action. And none is wedded to us or any other patron. All are looking around for alternative backers.

This is where many in the region believe China could come in. In China, the Arabs see a partner who will buy their oil without demanding that they accept a foreign ideology, abandon their way of life, or make other choices they’d rather avoid. They see a country that is far away and has no imperial agenda in their region but which is technologically competent and likely in time to be militarily powerful. They see a place to buy things they can use and enjoy. They see a country that unreservedly welcomes their investments and is grateful for the jobs these create. They see a major civilization that seems determined to build a partnership with them, does not insult their religion or their way of life, values its reputation as a reliable supplier too much to engage in the promiscuous application of sanctions or other coercive measures, and has no habit of bombing or invading other countries to whose policies it objects.

In short, the Arabs see the Chinese as pretty much like Americans – that is, Americans as we used to be before we decided to experiment with diplomacy-free foreign policy, hit-and-run democratization, regime change, drone wars, and other “neocon” conceits of the age. And they see a chance to rebalance their international relationships to offset their longstanding overdependence on the United States. But the political aloofness that makes China attractive as a partner also makes it unlikely that it would agree to compete with us for the privilege of acquiring and protecting foreign client states.

China has a long history of engagement with the Middle East. Islam entered China shortly after its seventh-century revelation, in 618, the year the Tang Dynasty began. The first official envoy of the Rashiddun Caliphate arrived in Chang’an in 651. It’s little known in the West that the great Ming Admiral Zheng He, who commanded multiple voyages to South Asia, East Africa, and the Middle East from 1405 to 1433, was a Muslim whose grandfather and father had made the pilgrimage to Mecca and who had been tutored in Arabic. He was following long-established, well-mapped Arab and Chinese trade routes. Four of his seven voyages touched Arabia. He himself visited Mecca on the last of them. The connections between East and West Asia were severed and atrophied during the era of European imperialism and the Cold War. They are now being rebuilt with astonishing speed.

China’s economy grew more than six-fold over the past ten years. China became the world’s largest energy consumer in 2010. It is the world’s biggest investor in renewable energy, but last December it displaced the United States as its largest oil importer. China now consumes 21.3 percent of the world’s oil. Not surprisingly, its main interest in the Middle East is uninterrupted access to the region’s abundant energy supplies.

China imports over half its oil from the region, primarily from Saudi Arabia, though it also buys almost half the oil produced in post-Saddam Iraq, where Chinese oil companies now play a leading role, and more than two-fifths of the oil exported by Iran. To buy all that oil, China must sell goods and services to Middle Eastern oil producers. As has become so common in so many other places, China is now the top destination for the region’s exports and the largest source of its imports. Chinese companies are the largest foreign investors in a growing number of Middle Eastern countries. For non oil-producing countries that rely heavily on the tourist industry, Chinese visitors are now a significant source of hard currency. Chinese is taught in Confucius Institutes in Israel, most Arab countries, Iran, and Turkey.

American presidents up to Woodrow Wilson (and his immediate successors) would have understood today’s China’s reluctance to take sides in the quarrels of others. As a vulnerable new state, the People’s Republic of China follows a policy analogous to that recommended by our founding fathers. As Thomas Jefferson put it: “Peace, commerce, and honest friendship with all nations — entangling alliances with none.” China does not wish to be manipulated by Israel against the Arabs, by the Arabs against Israel or each other, or by either against Iran. It hopes for productive relations with all. Unique among great powers, China simultaneously maintains largely positive and substantive relations with all the region’s peoples. This is not an easy stand to take in an area prone to view events as a conflict between good and evil.

In dealing with the turmoil in Syria, China has clung to its vision of non interference in the internal affairs of sovereign nations despite the damage this has done to its image in Saudi Arabia, its most important economic partner in the region and the principal sponsor of the Syrian rebels. Its unwillingness to support the Assad government against the insurgents has meanwhile earned it no points with Iran. China has excellent relations with Israel (including a lot of military technology coooperation), but does not take the side of the Jewish state in its struggle to master and dispossess the Palestinians. Nor, as a country that seeks no enemies, is China prepared to play the role of mediator in the Middle East. It recognizes, as the Greek philosopher Bias did two-and-a-half millennia ago, that “it is better to mediate between enemies than between friends, because one of the friends is sure to become an enemy and one of the enemies a friend.”

China has sound domestic reasons to be cautious about involvement in the Middle East. There is not a single province in China without a native Muslim population. Increasing numbers of Chinese make the pilgrimage to Mecca. Although – for complex reasons – the official figures are much lower, well over 100 million Chinese are Muslim, and the number is growing. Some Uyghurs have raised the banner of Islam in a violent campaign for the secession of Xinjiang. Al-Qaeda had a a Uyghur chapter. The contagious sectarian dogmas of the Middle East could adversely affect China’s security and social tranquility.

In short, China shares neither the priorities nor the impulse to activism of the United States in the Middle East. It has no emotional commitment to the Jews of Israel or the Muslims of Arab countries, Iran, orTurkey. It did not have its diplomats taken hostage by raging students in Tehran. Its armed forces are configured to defend its national territory, not to project power on the global level or to the Middle East. China does not need security of transit through the region.

China is dependent on Middle East oil supplies but confident that the self-interest of vendors and diplomacy make the use of force largely irrelevant to the security of energy supplies. Where actual threats to this security have arisen, as from Somali piracy in the Gulf of Aden, China has independently deployed the People’s Liberation Army Navy (PLA Navy) as part of an ad hoc, U.N.-authorized, multinational effort to restore freedom of navigation. Meanwhile, China has hedged against the possibility that the United States, India, or another great power might try to break its energy supply chains by diversifying its sources of oil and gas as much as it can. And, for sound strategic reasons, unlike us, China has kept its distance from the religious struggles of the Middle East. It has been content to buy what it needs and sell what it can to cover the cost, stay out of politics, and avoid taking stands on religious issues. If that sounds like the advice your grandmother gave you for dealing with other people, that just confirms its essential wisdom.

Much as the countries of the Middle East would like to enlist China as a sponsor and protector, they are learning that China has neither the capability nor the inclination to take on these roles. Their disappointment with Chinese distance from them has not impeded their development of a robust pattern of economic interdependence with China. The good news is that China does not seek to usurp our self-appointed role as the protector of the Middle East. That, I think, is also, in some senses, the bad news. We will not easily escape the burdens we have assumed in that region.

There is room for Sino-American cooperation in the Middle East. There is no inevitability about contention between us there. One must hope that we can in fact ways to work together or in parallel. It would help to listen, not apply mirror-imaged stereotypes to each other. Perhaps we could both learn something from that. Neither coercion nor the use of force is the only way to advance the national interest. Diplomacy and other measures short of war are generally less costly and more effective. The politics of the homeland may define national interests but a clear-eyed view of the realities of the world beyond it is essential for their successful prosecution.

Despite the growing economic interdependence of the United States and China, the overall trajectory of our official relations is at present negative. We would do well to avoid adding needless elements of a zero-sum game in the Middle East to the mix. There, as elsewhere, we need to search for broader common interests within which narrow differences can be subsumed and on which policy coordination can take place. I hope the effort to do this will be a significant part of the summit meeting between Chinese Communist Party chairman Xi Jinping and President Obama that begins tomorrow.

U.S.-China Relations in an Age of Strategic Reappraisal and Realignment
Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
 | May 23, 2013

Remarks to the Foreign Affairs Retirees of New England
There comes a time in every man’s life when he has more to recall than to anticipate. Like everyone else in this room today, I keep striving to reach that point and falling short. I can’t help looking to the future, because that’s where I’m going to spend the rest of my life. Besides, it’s getting so hard to remember things.

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I can’t help thinking of the old man who was sitting with his friend in the living room while his wife rustled up dinner for them. He turned to his friend and said: “my wife and I went to this really incredible restaurant downtown last week. Amazing food. Impeccable service.”

“What’s the name of it?” his friend asked.

“Well . . . ” He scratched his head and stared into the fireplace. After a long pause, he looked at his friend and asked: “What do you call that red flower with the thorns you give to women you love?”

“A rose?” his friend suggested.

The old man turned in the direction of the kitchen and bellowed: “Hey, Rose! What was the name of that restaurant we went to last week?”

As long as we have someone like Rose to consult, hindsight is an exact science. But, even with Rose as an assistant, prediction is not.

We are living in a world no one who toiled through the Cold War ever imagined. There is no Soviet Union. There are once again wars of religion, but there is no global contest of ideas Five centuries of Western dominance is coming to an end and the world and regional orders created by European ascendancy and American primacy are disintegrating. Our republic is becoming a garrison state in which our civil liberties are contracting rather than expanding.

Except where we are making war on foreigners, they no longer pay as much attention to us as they used to. In most places, anti-Americanism is giving way to creeping indifference about what Washington and New York think. For the first time since about 1880, there will soon be an economy larger than ours. We need to adjust to China’s return to wealth and power as well as to the strikingly unfamiliar context in which this is occurring.

It’s already obvious that the 21st century will be very different from the last. Before I get to the evolving relationship between the United States and China, let me briefly sketch out some of the remarkable changes taking place in the world that the U.S. and China cohabit. These changes add up to the end of the worlds created by World War I, World War II, and the Cold War. Power is devolving to the world’s regions. No one is in overall charge. And that raises a lot of questions.

In the Middle East, the work of Mr. Sykes and M. Picot is being undone. As you’ll recall, they were the British and French bureaucrats who dismembered the Ottoman Empire’s West Asian provinces to create today’s Iraq, Jordan, Lebanon, Palestine, and Syria. The ongoing demolition of Syria very likely foreshadows the demolition of some or all of the other states Sykes and Picot agreed to set up. Meanwhile, Turkey is back as a great power in West Asia and North Africa. This, together with the Syrian turmoil and the Arab uprisings in North Africa, is a big bang on the Middle Eastern kaleidoscope. How the pieces will rearrange themselves is unclear, but some sort of rearrangement is in prospect.

So too with America’s military role in the region. The United States has begun to revert to its historic status as a major energy exporter rather than importer. Indeed, U.S. production of oil and gas will double or even triple over the coming decade. It seems certain that some Americans will question the rationale for continuing to provide free U.S. military protection to assure access by other great powers to Middle Eastern energy supplies that they can’t do without but we can. Will we ask the major consumers of this energy – China, India, Japan, Korea – to assume this politico-military burden or to share it?

Having belatedly come together to establish the world’s largest economic collective, Europe seems to be unraveling. The European Union is too big to be ignored but too feckless to be taken seriously. The good news is that, unlike the 20th century, when the fault lines in Europe triggered a series of violent changes in the global order, in the 21st century, Europe now seems more squishy than tectonically brittle.

But Europe’s divisions are sharpening. Britain is seriously contemplating secession from the European Union (EU). Scotland may hive off from England. Germany more and more openly calls the shots in the EU. France chafes at German ascendancy and the triumph of the English language in Europe but has no persuasive answer to either phenomenon. The European South is on the economic ropes.

All in all, Europe remains a puzzle, wrapped in a muddle inside a pretense. It may be becoming something, but no one can be sure or say quite what. In the meantime, its component parts are focused on each other more than on the wider world. That gives them greatly diminished influence internationally.

Europe was the birthplace of the Enlightenment values that gave America its libertarian soul. In some ways, after the battering we Americans have administered to our civil liberties since 9/11, Europeans are now more faithful to the rule of law than we are. If the two sides of the Atlantic no longer agree on the norms of constitutional democracy and international law, what future do these concepts have? Now that Asia has become the world’s economic center of gravity and seems to be outperforming the West in delivering an ever-better life to its citizens, this question can no longer be evaded.

The major challenge to the once-universal sway of Western values now comes from the Dar al Islam, the 1.6-billion and 57-nation-strong global community of Muslims. This is the last remaining ideological bloc on the planet. Islam spans four continents and is expanding on all of them. The human-guided cruise missiles of 9/11 were acts of reprisal by a small and deviant minority of this vast community. They sought revenge for the deaths at our hands or those of Israel of hundreds of thousands of Muslims. And they wanted to drive home their opposition to our perceived imperial ambitions in the Islamic heartland.

Our immediate response to 9/11 had the support of the world, including overwhelming majorities of Muslims. We squandered that support with our subsequent invasion of Iraq, our mindless transformation of our punitive raid in Afghanistan into a bloody campaign of pacification there, and our inauguration of a drone-borne reign of terror in an expanding number of Muslim countries in West Asia and North Africa. The perceived injustice and inhumanity of American policies in the Muslim world have now gone a long way toward transforming an anti-American minority into a very large majority. This is most evident in Pakistan. It is happening elsewhere as well.

The hatred that our policies engender was the proximate cause of the April 15 terrorist bombing of the Boston Marathon. The insecurity we have imposed on Muslim peoples abroad is now blowing back on our own domestic tranquility. The president’s speech last week at the National Defense University was characteristically eloquent in its analysis of this vicious cycle of causation, but typically cursory in terms of prescriptions for how to break it.

Among other unintended consequences, the so-called “war on terror” is now connecting us to Africa in new and troubling ways. Well over 40 percent of Africans are Muslim. American military action against Islamic militants now extends to West as well as East and North Africa. We are beginning to see anti-American terrorism from Africans.

Africa is no longer either the colonial playground or the humanitarian theme park the West has traditionally fancied. Africans have begun to challenge the arbitrary state borders created by European powers at the Berlin conference of 1884-1885. They are in the midst of a violent process of creating their own, indigenously crafted polities. New states have emerged in Eritrea, South Sudan, and possibly Mali, as the sea of human entropy once known as Zaire continues its bloody disintegration. But this chaos obscures the fact that Africa now has many of the world’s fastest growing economies.

Africa’s economic progress reflects and is reflected in the decisions by China, India, and Brazil to treat Africans as trading and business partners rather than as recipients of charity with strings. To the distress of foreign assistance officials in international organizations and Western capitals, this has empowered Africans to make their own decisions about how to develop their countries. The result is a lot more growth as well as more opportunities for corruption.

Africa is finally beginning to emerge as an economic force in the world. In coming decades, as wages rise in China, it is expected to give up 85 million manufacturing jobs, Africa’s abundant cheap labor assures that it is where many of these jobs will end up. China is already Africa’s largest trading partner and investor. Major projects there tend to be contracted to Chinese, Indian, and Brazilian companies.

Brazil’s rise as a great regional power is another significant part of the realignment of global affairs. Before the Spanish Empire connected North and South America, these continents were ecologically, culturally, economically, and politically isolated from each other. This pre-Colombian geopolitical division now seems to be reasserting itself. The Monroe Doctrine posited a single strategic zone in the Western Hemisphere, dominated by the United States and denied to European and – by implication – Asian influence. That notion is dead.

Canada, Mexico, Central America, and the Caribbean remain in the U.S. sphere of influence but South America has left it. Brazil now has the sixth-largest economy in the world. China overtook the U.S. as Brazil’s largest export market five years ago. Brazil’s main trading partners are now its Spanish-speaking neighbors, Europe and Asia, not North America. As Brazil becomes the center of the South American political economy and develops relationships to its east and west, it is emerging as a diplomatic actor of consequence in Africa and international organizations.

To round out this brief account of the huge geopolitical changes taking place that set the strategic context outside the Indo-Pacific region, let me say a few words about our former Soviet enemy. Moscow now lacks a messianic ideology or the means to attempt global conquest but it retains the ability to destroy any country that attempts to subjugate the Russian Federation. Although most Russians are nostalgic about the USSR’s past global power, its collapse is turning out in many ways to be a good thing for Russia. Putin’s regime may in some ways resemble a protection racket more than a government but it is afloat on an apparently inexhaustible sea of oil and natural resources of great importance to the global economy. Despite its inscrutability, Putanism seems for now to have a firm grip on Russia and the Russian imagination.

Some Russians have become very, very rich. Many others have become world travelers. The Russian middle class clogs the beaches from Goa to Hainan. Every Russian may be dissatisfied in his or her own way, but all are proud to be Russian and – Western sympathy with noisy Russian dissenters notwithstanding – a clear majority supports strongman nationalism.

That is not to say it’s at all clear where Russia is going. Still, as Cyprus and Syria illustrate, Russia’s participation is indispensable in dealing with more and more events well beyond its borders. Meanwhile, the hounds of Russian intellect are once again in joyous pursuit of the elusive fox of their country’s identity. Americans have no dog in that chase. Yet we need to decide how Russia fits into our world view. We have yet to do so.

Situated between East and West, Russia is proving able to exploit both the confusions of Europe and the dynamism of China. A geographic position long thought to be a weakness is turning out to be a strength. Russia’s neighbors are courting relations with it as a great regional rather than world power. Moscow now has the best relations in its history with Germany, Turkey, and China It is conducting experiments in strategic coordination with all of them. It is also on good terms with Iran. And in Central Asia, Russian soft power has become a welcome alternative to past imperial and Soviet might as Russia pursues accommodation with China in the Shanghai Cooperation Organization.

Russia has also retained a cooperative relationship with India, which is slowly shucking off the Fabian socialism with Soviet characteristics that long kept it from realizing its potential as a great power. India dominates South Asia except for Pakistan, which China supports to keep India off balance. India is now reaching out to Vietnam and Japan to pay China a similar favor in East Asia. It is competing with China and the United States for influence in Indonesia, which is itself emerging as a great regional actor. India’s perception of itself as the natural rival to China for leadership in Asia is becoming more plausible than it once was.

This process is accelerating under the impact of Japan’s right-wing government’s determination to make Japan a “normal country” and to abandon the pacificism imposed on it by the American occupation after World War II. Japan is taking a much more active role in its own defense. It is loudly contesting territorial disputes with China, Korea, and Russia. Prime Minister Abe openly aspires to exploit widespread apprehensions about China’s rising power to build an anti-China coalition in Asia.

This coalition would embrace other countries with territorial disputes with China like India, the Philippines, and Vietnam and those interested in rolling back Chinese influence, like Myanmar. But Japan’s prospects for leading such a coalition are impaired by the transparent lack of remorse that underlies its politicians’ formal apologies for wartime atrocities. Indeed, by marked contrast with Germany, many Japanese seem to view a “normal” Japan as one that takes pride in its imperial and militarist past. They see Japan’s principal mistake in World War II as having been to allow itself to be defeated and occupied. They are indifferent to or deny Japan’s gross mistreatment of captive populations and its violations of the laws of war in the 1930s and ‘40s.

So the rise of China, itself deeply unsettling to longstanding dispositions of power in Asia, is far from the only strategic shift in progress there. The strengthening of India and Indonesia, the maturation of south Korea as a global industrial and technological force, the failure of north Korea as a society, and the emergence of a less risk-averse and more nationalistic Japan add to the complexities of the new order in Asia. In my view, we are not dealing well with those complexities.

It is said that generals invariably prepare to fight the last war. Similarly, politicians always seem to want to reenact past approaches as new problems arise in foreign affairs. The United States clung to isolationism in the 1930s long after it was dangerously inappropriate to do so. After World War II, we went to the other extreme, promiscuously extending protection to almost half the world’s countries. Ironically, having entangled ourselves in these alliances to prevent world domination by others, we now justify them in terms of preserving the credibility of our own military supremacy and omnipotence, including especially our postwar control of the Western Pacific. Most remarkably, thirty-five years after China’s defection to cadre capitalism and twenty-five years after the collapse of the Soviet Union, we are clinging to alliance structures designed to contain the long-vanished Sino-Soviet bloc.

The so-called U.S. “pivot to Asia,” though justified by reference to regional concerns about rising Chinese power, seems less a response to demands from allies, partners, and friends than a move to retard the loss of our nearly seven decades of dominance in the Western Pacific. Threat analysis is, of course, the highest form of budget justification. China’s erosion of the traditional American military supremacy in its near seas is a timely justification for military Keynesianism – continuing high levels of defense spending to head off job losses in our military-industrial complex. By ironic contrast, the economic aspects of the “pivot” seem mostly intended to undercut China’s role as the center of the Asian economy rather than to create American jobs.

The Soviet collapse deprived our foreign policy of focus. The “pivot” takes China as the cure for this enemy deprivation syndrome. But it’s far from clear that we have the fiscal resources or freedom of maneuver away from the Middle East that the “pivot” presupposes. So far, the “pivot” – or, to give it its kinder, gentler name, the “rebalancing” – is mostly rhetoric, not action. But this has been enough to embolden some of China’s neighbors to risk provoking it, while inducing a pronounced chill in Sino-American relations. There is a risk that Americans are about to satisfy the nostalgia some evidently have for the Cold War by producing a new version of it. Last time, the game was called when the Soviet Union defaulted. It’s very unlikely that this would be the result of a similar contest with China.

The introduction of capitalism was necessary to save China but capitalism cannot now do without China. China is integral to the global economy; it cannot be isolated or “contained.” Its system, unlike that of the Soviet Union, has a history of adapting to meet the challenges before it. It is unlikely to fail. Indeed, China’s economy seems poised to match and then dwarf ours in size. Historically, there is nothing new about this. Until recently, when it had a couple of bad centuries, China accounted for one-third or more of global GDP. China’s neighbors may be apprehensive about the application of its coercive power to the minor territorial disputes they have with it, but they do not fear occupation or subjugation by it. With the possible exception of Japan, they seek to accommodate China at minimal cost to their interests, not to take sides against it. None wishes to go to war with China.

This is not America’s finest hour. Our political system is broken, our constitutional balances undone. Our bill of rights is compromised or suspended. We are disinvesting in our human and physical infrastructure. Our economic competitiveness is visibly declining. We are unable to pass a budget, still less set priorities for our languishing economy. In short, we are afflicted by budgetary bloat, political constipation, diplomatic enervation, and strategic myopia. This doesn’t seem a particularly propitious time to pick a fight with a rising power.

That’s why next week’s two-day private meeting between President Obama and President Xi Jinping is vitally important. Mr. Xi has proposed that China and the United States try to develop “a new type of great power relationship” to avoid the conflict that has so often occurred between established and rising powers and to foster cooperation instead. His concept makes sense but has little, if any content as yet. Diplomats, of course, take a professional delight in the inchoate, inane, vapid, and unspecific. So I’m sure that you, like me, will see the present lack of substance to Mr. Xi’s idea as a good thing. It’s an invitation to Mr. Obama to work with him to define a new and positive framework for Sino-American relations. And that is exactly what we need to do in the radically changing global and regional circumstances in which our two countries now find ourselves.

China and the United States are dependent on each other for our prosperity. Without cooperation between us, effective global governance is impossible. Challenges like global warming, environmental degradation, pandemic disease, the maintenance of global order and the rule of law, non proliferation, space and cyberspace as new human domains, and the achievement of security from intercontinental war will not be met. If the United States and China choose a path of confrontation, we will both lose. China has been fond of saying that it needs a peaceful international environment in which to restore itself to wealth and power. The United States now needs such an environment no less than China if we are to return to realizing the enormous potential inherent in our geography, human diversity, openness to ideas, propensity for innovation, and traditions of liberty. Next week’s meeting promises to be a turning point for both countries, for Asia, and for the world.

Asia’s New Strategic Landscape

Ambassador Chas W. Freeman, Jr.  (USFS, Ret.) |  23 April 2013, Jiaotong University, Shanghai, China

Introductory Remarks to the Seminar on U.S., Chinese, and Russian Relations

The Asia-Pacific region is now more troubled by multiple crises and confrontations than it has been in twenty years.  The crises and confrontations include:

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  • threats of nuclear war in Korea,
  • maneuvering by China and Japan over conflicting claims to the Diaoyu or Senkaku islands,
  • intermittent incidents between China and some Southeast Asian nations over claims to islands, shoals, reefs, and seabed resources in the South China Sea, and
  • escalated tensions between Japan and south Korea as well as Russia over emotionally-charged maritime boundary disputes.

These tensions reflect unexpiated historical traumas, states of war that have yet to be succeeded by formal peace agreements, and the legacy of past imperial spheres of influence, colonial conquests, and Cold War confrontations.  The flare-up of these disputes after decades of dormancy is the result of shifting balances of capabilities among the region’s powers that have yet to be reflected in readjusted relationships, new equilibriums, and patterns of mutual restraint.  The difficulty all concerned are having in handling their conflicting interests underscores the need to reach closure on historical issues, formally end bygone wars, and settle territorial disputes in the Asia-Pacific region rather than allowing them to fester and stimulate nationalist frictions.

The global stake in this region’s stability is great and growing.  East and South Asia have resumed their historic role as the global center of economic gravity and the Pacific basin has eclipsed the Atlantic as the home of the world’s most dynamic societies.  In economic terms, Asia is now Sino-centric.  China is where the region’s and the world’s supply chains converge.  It has recently joined the United States and Japan as a world economic power, meaning a country whose interests and activities must be taken into account everywhere on our planet.

With Russia, China is also increasingly active in defending the rules of international behavior enshrined in the United Nations Charter through its status as a permanent member of the Security Council.  This places China ,with a few other countries, at the managerial apex of the evolving world political order.  And, for the first time since the eighteenth century, China has a credible ability to defend the approaches to its borders as well as its territorial integrity.  It has reemerged as Asia’s greatest military power.

This is the economic, political, and military context in which the United States has announced a “pivot” to the Asia-Pacific region.  The logic of a shift in American strategic attention to Asia is irrefutable.  Characteristically, having received a directive to emphasize Asia, the U.S. military responded with disciplined speed.  The civilian elements of our government are taking their time to mobilize themselves.  This has left the impression that the “pivot” is all about military deployments.  It has also left the precise import of the “pivot” to be clarified by the passage of time and the direction of events.

In essence, however, the “pivot” or “rebalancing” is simply recognition of the heightened importance of Asia.  This acknowledgment of evolving Asian realities will find ongoing expression in American economic, political, and military strategy and activities.  America’s Asian allies, partners, and friends seek U.S. support for the process of peaceful accommodation of Asia’s new realities. They do not want to divide their region into competing spheres of influence dominated by great powers.  American facilitation of the peaceful adjustment of balances between Asian nations can and should be a constructive part of the “new pattern of great power relations” that Chinese State President Xi Jinping proposes.

The United States has been an essential element of the Asia-Pacific balance of power since the 1850s.  In 1945, America occupied and attempted to reform Japan.  Since then, the United States has filled the vacuum the overthrow of Japanese militarism and Japan’s earlier annihilation of European colonialism in Asia created.  Asian-Pacific states have come to rely on a robust American presence to stabilize their region.

The United States has acted consistently to oppose violent alteration of the status quo in Asia.  For a quarter century, this pitted America against China.  Our two countries fought directly to a standstill in Korea from 1950 to 1953 and indirectly to a U.S. defeat in Indochina, which fell to Hanoi in 1975.  Russia, in the person of the Soviet Union, was indirectly but substantially involved in both conflicts.

The United States stood aside as China used force to convince Hanoi to stand down from empire-building in Southeast Asia.  U.S. policy created a context in which China can and has promoted peaceful change through dialogue across the Taiwan Strait.  At the cost of awkwardness and occasional tension in its relations with China, the United States has opposed coercive measures against Taiwan.  But it has welcomed and supported every advance in the ongoing process of cross-Strait rapprochement and integration.  It has objected to none.  The results speak for themselves.  As a very great Chinese statesman once put it: “practice is the sole criterion of truth.”

Far from seeking to “contain” China, as some in China allege, American policy over the decades since normalization in 1979 has sought to encourage China to come out of its shell and join the councils of global governance.  China’s membership in the World Trade Organization and in the G-20, as well as the unprecedentedly elaborate consultative processes of the U.S.-China strategic and economic dialogue all attest to this.  Much of contemporary China’s success as a modernizing society reflects the welcome America extended to Beijing’s new policies of reform and openness.  The United States has welcomed Chinese students, Chinese products, and Chinese services as well as access to China’s growing market for its own goods and services.

As Russians well recall, “containment” was a grand strategy premised on the calculation that the isolation of the Soviet Union would ultimately produce its collapse, as defects in the Soviet system took their inevitable toll.  Whatever their imperfections, U.S. policies toward China since 1972  have been based on engagement, not containment.  These policies have helped to draw China into a world order it once shunned and to propel it toward ever greater wealth and power.  The Chinese and American economies are now heavily interdependent.  The concept of “containment” is totally inapplicable to China.  No one in the United States advocates applying it.

But everywhere along its borders, in relation to its neighbors, China now appears to have the military upper hand.  If fear of bullying by China is not to provoke the formation of coalitions in opposition to China, smaller, weaker Asian countries must be confident that they will not be subjected  to power politics or the use of force.  In its politico-military dimension, U.S. policy is directed at providing this reassurance.

It is entirely natural that China’s neighbors should seek American backing as they work out new relationships with China and each other that reflect the changing balances of power in Asia.  China also quite reasonably expects that the United States will counsel its allies, partners, and friends to avoid acting provocatively toward China.  America is playing this vital role.  It is a role that is consistent with longstanding American support for peaceful resolution of disputes in Asia.  It is also one that is congruent with China’s interest in managing frictions along its borders by measures short of war as it strives for greater wealth and domestic tranquility.

Of course, China cannot be sure that the “pivot,” might not become the basis for attempted American military coercion of it.  It is logical that China should insure itself against this possibility.  Shoring up China’s long-underdeveloped relationship with Russia, which stands on its other flank, is an obvious part of such an effort.  It has also been no secret that China and Russia share a concern about the potential for U.S. missile defense programs and deployments to undermine strategic deterrence.  It is natural too, given its global interests, that China should wish to reach out to regionally powerful states like Brazil, India, and South Africa as well as to developing countries with mineral and other resources that China needs.  I take it that these factors contributed to President Xi Jinping’s decision about where to make his first calls abroad.

On some topics, bilateral dialogue between great powers is not enough.  China, Russia, and the United States have common interests to which we must all three attend.  Korea is a case in point.  Our three countries need urgently to consider how best to sustain peace and stability in the Korean Peninsula in the face of all the challenges now evident there.  Afghanistan is a Central Asian state with a history of harboring and exporting terrorists. In the year ahead, as NATO and U.S. forces prepare to withdraw from Afghanistan, it will be important for China, Russia, and the United States to consult about how best to deal with the possible consequences of this for regional and global security.

These topics and others, I imagine, will be part of the “new pattern of great power relations” that China and America are committed to explore.  The concept of a new style of great power interaction clearly applies to Sino-Russian relations too.  Who knows?  It might even come to inform and improve Russo-American interaction as well.  We must hope so.

Interesting Times: China, America, and the Shifting Balance of Prestige

Washington, DC |  March 28, 2013

Book Launch, Carnegie Endowment for International Peace

I owe the two words “interesting times” in the title of this book to my publisher, the redoubtable Helena Cobban. She thought the phrase captured the spirit of the exciting, trying, exhilarating, exasperating, but always surprising progress that China, the United States, and the world have registered over the past half century.

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I see one or two notoriously finicky people here. Let me therefore admit at the outset that, while Chinese has many wonderfully descriptive epigrams, the celebrated curse, “may you live in interesting times,” is not one of them. It was apparently coined by the British ambassador to China, Sir Hughe Montgomery Knatchbull-Hugessen KCMG around 1937, after he had the “interesting” experience of being strafed and wounded by a Japanese fighter aircraft in Shanghai. So the curse originates in China but, given the inscrutability of Sir Hughe’s name, no one has ever been able to remember for long who first uttered it or where.

“Living in Interesting times” doesn’t even have a standard Chinese translation. In my view, the energetically vexing uncertainties of modern life in China deserve succinct expression in a snappy four-character phrase. So, by the way, does the other apocryphal Chinese curse, “may you come to the attention of people in authority.” Perhaps the publishers of a future Chinese edition of “Interesting Times” can crowd-source appropriate new 成语.
Let me turn to the book itself.

There is a mythical Chinese animal called the “四不像” – the “beast that is unlike four others.” It has a cow’s hooves but does not moo. It has a horse’s head but can’t be sold as beef in European butcher shops. It has a deer’s antlers but does not live near strip malls in the suburbs. It has a donkey’s body but is not an ass. Some say its bite is fatal and some are horrified by it.

This book may horrify a few people but I doubt it will bite, still less kill anybody. Like a “四不像,” it is tempting to define “Interesting Times” by what it is not. It is not your common Washington suck-up to the administration of the day, work of sinology, think-tank study, or belief-tank polemic. It contains an anecdote or two and, for better or ill, it reflects the author’s place and perspective about things when they happened, but it is not an autobiography. Nor is it a Washington-insider account of how the author invented devilishly clever policies, personally sold the president on them, and imposed them on unwitting foreigners.

The book expresses my views rather than those of any institution or group of like-minded people. In sum, it reflects who I was and who I am and what I saw and see changing in and with China. I was a career diplomat and am a businessman who dabbles in sinology, not a sinologist, securocrat, or policy wonk who dabbles in diplomacy or business.

China has been around for a long time but I first discovered it in 1963 in Widener Library at Harvard, when I sought refuge from the intellectual desert of law school by reading world history. Later, after I entered the Foreign Service of the United States, I fought to get into the Chinese language and area studies program so I could learn Mandarin and Taiwanese. I had convinced myself that geopolitics would force a Sino-American rapprochement. I thought it would be exciting to be part of that. As it turned out, it was. To one degree or another, I have been happily engaged with China for forty-four years.

“Interesting Times” contains observations about a half century or so of developments in Sino-American relations. It looks at changes in the regional and global orders brought about by China’s recovery from its previous catalepsy, convulsions, and foreign incursions. The book documents my efforts at various times to understand and explain what China was up to and to project where it might be going.

In addition to what is in print in the book, there are supplementary materials that reside online. For example, there is a memorandum inspired by a delicious bowl of noodles that I bought in Tiananmen Square in 1979. In the memo, I rashly attempted to forecast what China might be like after another 20 years. A lot of my hypotheses then and on other occasions did not coincide with the conventional wisdom and were controversial. Better analysts than I roundly criticized – sometimes denigrated – me for my views. Sometimes they were right to do so. China is a moving target that is hard to grasp.

It is difficult to overstate the speed and scope of the changes that have occurred in China and its foreign relations over the course of the forty-one years since I first set foot in Beijing. The Cultural Revolution had then shut down China’s foreign relations. China had only one full ambassador abroad – Huang Hua, whom Zhou Enlai protected by not recalling him from Cairo. Today, China is a presence everywhere and a major actor determining the reactions of the international community to events well beyond its immediate periphery. In this regard, consider, for example, G-20 and IMF meetings, peacekeeping operations in Haiti, the Congo, and Lebanon, proposals for foreign intervention in Syria, and sanctions against Iran. That’s before you get to current affairs in north Korea, the Diaoyu or Senkaku Islands, or the Russian armaments industry.

The basis for the huge expansion in Chinese global and regional influence is, of course, mostly economic. In 1972, in current dollars, China’s GDP per capita was about $130. When George W. Bush took office in 2001, this had grown to over $1,000. Last year, it was over $6,000, with purchasing power equivalent to about $9,000. Think about what that means for ordinary people in China! That’s a 47-fold rise in wealth!

In 1972, Taiwan’s 16 million people had a GDP slightly larger than the China mainland’s 875 million. The Chinese economy is now expected to surpass ours in purchasing power terms by 2016, the year in which we will hold our next presidential election. China will almost certainly overtake us in nominal exchange rate terms before the 2021 centennial of the founding of the Chinese Communist Party.

In 1972, China’s worldwide imports and exports came to $6.3 billion, including US-China trade of about $95 million. Last year China’s trade in goods alone was $3.9 trillion. US-China trade in goods and services came to $536 billion. There was no investment by either country in the other in 1972. Now there is US investment everywhere in China and our states and localities are pushing for some sort of Open Door policy for Chinese investment in the United States.

In 1972, there were no Chinese tourists or students in the United States. A few hundred Americans visited China. This year there are over 200,000 Chinese students here. Almost 1 ½ million Chinese tourists will visit and over 2 million Americans will go to China.

You get the point. This is a very consequential relationship that is in the process of becoming more so. I don’t have to drone on for you to appreciate the extraordinary dynamism of China and US-China relations and their effects on Asia and the world. And, having just waxed uncharacteristically numerical, I want to assure you that, while there are many references to facts and figures, there are no dreary charts and graphs or statistical recitations in “Interesting Times.”

The book does, however, contain a fair amount of exploration of how China changed and of the nature of what I call “cadre capitalism” – otherwise known as “socialism (or is it Leninism) with Chinese characteristics.” Cadre capitalism is something new. For ideological reasons, it’s poorly understood in China and greatly misunderstood abroad. Cadre capitalism is a party-based system that links political boosterism to economic entrepreneurship. It makes so-called state-owned enterprises formidably competitive and business in China highly efficient. It’s a unique artifact of Chinese culture that, in my view, cannot be exported as a model or borrowed abroad. Perhaps that’s just as well. If corruption is at heart the result of an inability to separate personal interests from public or enterprise interests, then cadre capitalism promotes corruption as well as business efficiency.

“Interesting Times” spends a lot of time looking at the origins and evolution of the question of Taiwan’s relationship with the rest of China and America’s role in this. One online piece looks at Taiwan in foreign strategies toward China since the 17th century. Mostly, however, the book tracks the evolution of the Taiwan issue in US-China relations, in whose development it remains a significant inhibition. And it examines the effects on China’s neighbors and the United States of China’s remarkable return to wealth and power. It looks back forty years, but it also tries to look ahead another forty.

On that incautious note, let me turn the podium back to Dr. Swaine before we turn to questions and comments.

The Global Impact of Asian Disharmony

Ambassador Chas W. Freeman, Jr. (USFS, Ret.) | 28 February 2013 | Sausalito, California

Remarks to the Winter Roundtable of the Pacific Pension Institute

It’s a pleasure to be back among friends at a Pacific Pension Institute roundtable.  The last time we were together was in July 2011, when PPI met in Vancouver.  I spoke then about the shifting strategic geometry of Asia and its impact on the world order.

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A few days ago, I reread what I said in 2011.  I’m not sure whether to be happy or distressed that most of the trends I identified have continued to play out.  A Sino-centric Asian order is upon us.  China is both the largest trading partner and greatest politico-military obsession of every nation in the Indo-Pacific region.  To a greater extent than I feared and to the dismay of most countries within it, the region looks as if it is beginning to divide itself into spheres of influence, with one sphere looking to Beijing, and one to Washington and – possibly – Tokyo.

New leaders have just taken office in China, Japan, and both south and north Korea.  Before they can consider compromise, politicians must show themselves to be tough custodians of the interests in their charge.  This is all the more the case when many of those they lead are in an assertively nationalistic frame of mind.  So Xi Jinping, Abe Shinzo, Park Geun-hye, and Kim Jong-Un are all striking defiantly uncompromising poses with respect to a growing array of issues and disputes.  The world is hearing much more than it ever wanted to hear about the Diaoyu / Senkaku archipelago, Takeshima / Dokdo, the Kuriles, the Spratleys, Yeonpyeong Do, Huangyan Dao / Scarborough Shoal, Hoang Sa / the Paracels, Arunachal Pradesh / Tawang, the Aksai Chin, and other places almost no one can find on a map.  And now we are having to learn the names of north Korean missile and nuclear test sites as well.

One-eighth of the way through the 21st century, Asia is not just Sino-centric, it is in transition and less harmonious.  Asia’s disharmonies have broadening international impact.  There is a sense that armed conflict between the region’s great and lesser powers could be in the offing.  If tensions continue to rise, Asian quarrels will have profound effects on the global political economy, which is already in many ways unhealthy, unstable, in unguided transition, and vulnerable to political-economic setbacks.

In some but not all of the territorial disputes that now threaten the peace of Asia, China is a key actor.  China has a strategic interest but no direct involvement in others.  The United States, by contrast, has explicit or implicit security commitments that to one degree or another entangle it in all these disputes.  In the absence of a clearer drawing of lines than America has so far put forward, allies and partners will challenge Washington to fulfill its undertakings as they choose to interpret them rather than as Americans may have conceived them.  If conflict erupts, except where China is directly involved, Beijing can decide to remain on the sidelines.  The United States is essentially hostage to all who have become accustomed to relying on its post-World War II dominance of the Asia-Pacific region.  In no dispute is the initiative with Washington; in none can it easily stand aside.

It is this element of automaticity in American military entanglement that, more than anything else, led former Australian prime minister Kevin Rudd to liken the current situation in the Western Pacific to that in the Balkans a century ago.  In 1914, apparently trivial events in a then deservedly obscure corner of Europe set off a great war that no one wanted or expected.  Aside from the huge butcher’s bill it entailed, World War I ended four decades of prosperity through advancing globalization. It overthrew the established political, economic, and financial orders.  It redistributed the world’s wealth and power and ushered in a seventy-five-year period of great power contention for worldwide military dominance.

Let us hope that, in recalling the events of ninety-nine years ago, Mr. Rudd proves to be a better historian than futurologist.  Still, he is right to be greatly concerned about what might be at stake as Asia’s great and lesser powers squabble and posture over barren islands, rocks, and shoals in the Sea of Japan and the East and South China Seas.

Of course, unlike comparable powers in 1914, the parties to these contests are mostly mobilizing coast guards and other civilian agencies rather than armies.  They are careful to keep their armed forces in the rear, even as they boost their military budgets and force structures and prepare for battle.  They understand that combat over piddling places of little but symbolic importance could prove catastrophic for much larger and more concrete national interests.  It is reassuring that they give every sign of determination to manage their disputes without resorting to force, despite pressure to do so from their publics.

But the focus on managing rather than resolving the causes of current tensions – though understandable – is making the risk of accidental conflict a permanent feature of the Indo-Pacific landscape.  Despite the desire of both Americans and Chinese to avoid a fight, this increases the danger that the two countries could become embroiled in a trans-Pacific war.  The rising tensions in Asia matter not just to the parties directly concerned.  They affect all who derive their prosperity from the global economy.  In this era of globalization, that means everybody everywhere.

After a couple of centuries of eclipse, the Indo-Pacific region has again become the world’s economic center of gravity – the major driver of its growth.  Unstable political relationships between China and its neighbors and in the Indo-Pacific’s core northeast Asian region could reverse the process of economic integration in Asia that has been central to the success of globalization.  If that happens, the livelihoods and prosperity of people everywhere will suffer.  The global economic outlook is already doubtful.  There is prolonged recession in the industrial democracies.  Political constipation, budgetary bloat, and fiscal fibrillations are enfeebling the United States.  The demise of effective global governance is allowing a lengthening list of serious problems to accumulate.

Substitutes for fiscal policy like quantitative easing, competitive devaluation, and other techniques of monetary stimulus risk triggering ruinous currency and trade wars.  Contingencies ranging from a collapse of confidence in the dollar-based international monetary system to global warming are going unaddressed.  The deterioration of political and economic ties between China and Japan, Japan and Korea, and China and some ASEAN nations adds significantly to the possibility that Asia will contribute to rather than cure the current global malaise.

The economic fallout from the Sino-Japanese dispute over the Senkaku or Diaoyu archipelago has already been substantial.  Over the past half year, anti-Japan backlash in China has reduced the market for Japanese goods and services and cut Japan’s already anemic growth rate by at least one percent.  It is one reason Japan is now back in recession.  The new Abe administration faces major economic policy decisions amidst security challenges on Japan’s maritime frontiers.

Tokyo has before it four major opportunities to expand Japan’s access to overseas markets through new free-trade agreements.  One is with the European Union.  Japanese companies lack the advantages that their south Korean competitors have wrested from the EU.  A similar Japanese arrangement could add a bit over one-fourth of one percent to Japan’s growth.  There is no real debate in Japan about the desirability of trade negotiations with the EU.  It is a “no brainer.”

By contrast, the other potential agreements represent major decisions about Japan’s future strategic orientation.  Two would link Japan firmly to rising prosperity in Asia.  The Regional Comprehensive Economic Partnership (RCEP) would unite the ten members of ASEAN in a vast free-trade area with Australia, China, India, Japan, south Korea, and New Zealand.  Joining the RCEP could boost Japan’s growth rate by over one percent.  The conclusion of a trilateral Japan-China-Korea free-trade agreement alone would add three-quarters of one percent to the Japanese growth rate.  Neither the pan-Asian RCEP nor the more circumscribed northeast Asian trilateral agreement has yet fallen victim to recent tensions between China, Japan, and their neighbors.  It is particularly encouraging that trilateral discussions are continuing between China, Japan, and south Korea despite bilateral tensions among them.

The fourth potential agreement would enlist Japan in a project to develop an Asia-Pacific free-trade area that excludes China.  The Trans-Pacific Partnership (TPP) was originally an arrangement between Brunei, Chile, New Zealand, and Singapore.  Washington’s belated decision to get behind the TPP was more political than economic.  The TPP is a key component of America’s “pivot” to offset and constrain Chinese influence in Asia.

China is the region’s economic center and its biggest and fastest growing market.  It is poised to overtake the United States as the world’s largest economy and the EU as its largest importer of goods and services in a few years time.  A free-trade arrangement without China does not make sense in purely economic terms.  Still, joining the TPP could boost Japan’s growth by a bit over one-half of one percent.

None of these agreements is likely to come easily, but Japan must decide very soon where to place its bets.  Despite the huge stake of Japanese business in developing Asian markets, Tokyo’s choice now seems more likely to be shaped by political nationalism than by economic self-interest, even though the latter is self-evident.  Japan has a wealth of intellectual property and high-quality, branded products, while China and other Asian countries have rapidly growing middle classes with rising purchasing power.

Over the coming fifteen years, China alone is expected to account for nearly one-fourth of the total  expansion in global consumption, adding about $6.2 trillion to current levels.  If Japanese products are unwelcome in Chinese markets, Japanese companies and the well-being of ordinary Japanese will both suffer.  But, in current Japanese politics, the economic arguments for focusing on developing Japan’s markets in China have less traction than before.

After nearly seven decades of cautious deference to the United States, Japan has only recently resumed  making its own strategic decisions.  Only Tokyo can now decide what sort of relationship with Beijing is in its interest.  Its decision will have considerable – perhaps decisive – impact on U.S.-China relations as well as on Japan’s relations with the United States, and on the strategic orientations of other Asian nations trying to come to grips with the reality of China’s rise.

At present, Sino-American relations are characterized by broad economic interdependence and selective political cooperation.  These positive elements of the relationship contrast with mutually suspicious and increasingly hostile military interaction.  Ironically, the Taiwan issue, once the only plausible cause of possible conflict between China and the United States, has become much less salient and dangerous, as Taipei and Beijing ratchet up cross-Strait rapprochement.  But, mindful that Japan’s, the Philippines’, and Vietnam’s quarrels with China could set off a Sino-American war, both the United States and China now openly seek to deter such a war by preparing to fight one.

In current circumstances, there is a substantial risk that the much-heralded “Asian century” could feature  a cold war between the United States and China.  That is not a happy prospect even if fear of triggering a nuclear exchange effectively inhibits risk-taking by both sides.  The world cannot prosper in peace if the relationship between its two largest economies and most comprehensively capable military powers is uncooperative, verging on hostile.

Sino-American cooperation on global governance and the mutually beneficial management of trans-Pacific economic interaction are essential for global peace and prosperity.  So is cooperation between China, Japan, and south Korea.  Progress is incompatible with intensifying military tensions and rivalry.  No one wants such antagonism, but it is now a real possibility.  Statesmen on both sides of the Pacific must strive to preclude it.

Asian nationalism has always been a strong undertow along Asia’s poorly demarcated frontiers.  But, since the Korean War, only India and Pakistan have been swept into full-scale wars.  For different reasons, China, Japan, and the two parts of Korea have each, however, exhibited the passive-aggressive demeanor of nations that see themselves as perennial victims of the outside world.  In this context, Japanese statements and actions evidencing a lack of contrition for the actions of the Imperial war machine in the first half of the last century easily become a regional problem.

Chinese condemnations of Japan’s denials of its past behavior have in turn empowered Japan’s rightists to push an ever-more overtly anti-China agenda.  Sino-Japanese frictions over territorial issues have inflamed nationalist passions in both countries.  Previously latent territorial disputes between Japan, Korea, and China have been reactivated.  Northeast Asia is caught in a feedback loop that reinforces animosity and reduces willingness to cooperate.

Contested memories of past cruelties have become a particular, self-perpetuated burden on Japan’s relations with its neighbors.  Japan’s political autism aggravates the problem.  How could even the most ethnocentric of Japanese politicians fail to anticipate the international consequences of renewed denial of the abuse of Korean and other Asian women in Imperial Japanese field brothels during World War II?  Such revisionism enrages other Asians – not to mention the world’s women.  It raises questions about whether Japan has truly changed.  I believe it has, but no one in Asia is going to take my word or that of any other American on this.

Similarly, Chinese statements and actions asserting claims to the murkily drawn borders of Imperial China remind Asians of past Chinese hegemonic behavior.  This is all the more the case when the People’s Republic speaks in haughtily self-righteous language echoing that of the Qing Dynasty.  No one, not even Chinese, recalls the Qing Empire or its arrogance with favor.  When joined to stepped up patrols of previously unsecured Chinese boundaries, China’s evocation of its imperial past alarms its neighbors and impels them to seek the support of both the United States and other Asians against China.

For its part, if Japan seeks international support for its sovereignty and territorial integrity, the practice of unrepentant nationalism is no way to secure this.  After more than six decades of exemplary behavior in foreign affairs, today’s Japanese leaders risk overwriting widespread admiration of their country with revived images of the mass murders, rapes, enslavements, and other war crimes carried out by previous generations of Japanese.  Japan needs at last to show other Asians that its nationalism can be respectful of theirs.

Nowhere is Japan’s task more urgent than in its relations with Korea.  By its own reckoning, in the course of its very long history, Korea has been invaded more than seventy times, mostly from what is now China.  But Korean suspicions of China pale before the bitterness aroused by three centuries of Japanese efforts to conquer Korea and the harsh rule of the Imperial Japanese Army in the peninsula from 1905 to 1945.

Last Friday, as Prime Minister Abe met with President Obama in Washington (just three days before the inauguration of Park Geun-hye as the new south Korean president), Mr. Abe sent a senior official to represent him at local celebrations of Japan’s claim to what it calls Takeshima – the islets that Koreans know as Dokdo.  These barren rocks were annexed by Japan in 1905, reclaimed by Korea in 1945, and garrisoned by it over sixty years ago – in 1952.  Japan’s reassertion of its claim predictably evokes Korean memories of past Japanese aggression and domination.  Japan’s actions and the Korean reactions to them illustrate that, in northeast Asia, there is plenty of shortsightedness to go around.

Until recently, the burgeoning cooperation among Japan, south Korea, and China was the linchpin of Asian financial and economic integration.  Last summer, however, as Sino-Japanese tensions hit their peak and amidst a Korean-Japanese war of words over Dokdo / Takeshima, Japan and Korea called off an agreement to share intelligence.  The South Korean president dramatized Korea’s control of the islands by landing on them.  The two nations withdrew their ambassadors from each other’s capitals and ended a currency swap agreement that had been widely seen as a centerpiece of progress toward Asian financial integration.  Still, Japanese cooperation with south Korea remains a real possibility, especially if it includes China.  Notwithstanding all the irritations that divide China, Japan, and Korea, the first formal negotiating session on a tripartite free trade area is due to convene in Seoul in about a month.

Even without such an agreement, south Korea’s economic integration with China is proceeding apace.  Almost five million south Koreans visited China last year.  South Koreans are the largest single group of foreign students in Chinese universities and  Chinese students outnumber all other nationalities studying in south Korea.  In December, the two countries concluded a currency-swap arrangement that will boost trade settlement in their currencies, bypassing the dollar.  China is south Korea’s largest trading partner, with two-way trade amounting to about $240 billion last year.  By contrast, although China accounts for over 70 percent of north Korea’s foreign trade, this amounts to less than $6 billion annually.

North Korea represents a huge U.S. policy failure, rooted in decades of diplomacy-free military confrontation and sanctioneering.  (The policies that helped to produce the angrily isolated and strategically dangerous nuclear nightmare that is today’s Democratic People’s Republic of Korea are now being applied with cookie-cutter mindlessness to Iran, where they promise in time to yield similar results.)

North Korea is also both a major Chinese policy failure and an instructive insight into the limitations of Chinese statecraft.  North Korea is overwhelmingly dependent on China.  There is almost nothing that Chinese like about it – its dynastic system, its ideology of self-reliant self-starvation, its paranoid belligerence and nonsensical bombast, its provocative and often criminal international behavior, its ingratitude for China’s support, or its nuclear weapons and missile programs.  Yet China has not been able to influence north Korean behavior in any important respect.

To some, this might seem an embarrassing demonstration of the limits of China’s power over a dependent, if churlish neighbor.  It certainly devalues Chinese prestige.  Yet China’s other, far more mannerly neighbors should find China’s unwillingness to bully north Korea into following its dictates reassuring.  It suggests that, in the updated version of the traditional Sino-centric order that is emerging in Asia, China will demand respect but not obedience and deference rather than submission.  This conjecture is not invalidated by China’s current quarrels with neighbors  over its maritime frontiers.

The narrative here and in much of Asia blames an inexplicable surge of “Chinese assertiveness” for these quarrels.  Certainly, China has been both imperious in its handling of them and obtusely slow to square its claims with the U.N. Convention on the Law of the Sea.  Yet the origins of these ruckuses lie less in Chinese initiatives than in the new capacity of all claimants, not just China, to exercise jurisdiction in what were previously no-man’s lands.  A comparison of the situation in the East and South China Seas  forty years ago with that today shows a much expanded presence by Japan, the Philippines, and Vietnam but only a limited growth in that of China.   Be that as it may, the efforts of all sides to colonize or police islands in these seas have now ignited nationalist passions on all sides.

China is far from the only country to require a peaceful international environment to get on with enhancing its prosperity through continued regional integration and globalization.  China can ill afford the mobilization against it by neighbors that continuing tensions over otherwise inconsequential rocks and reefs will breed.  Other claimants must expect their bargaining positions to weaken as China’s strength continues to rise.  So the earlier a resolution, the better for all sides.

At this point, unfortunately, there is no obvious path to such resolution.  The United States has made itself part of the problem.  Washington cannot mediate.  ASEAN cannot act multilaterally to solve bilateral disputes in the South China Sea when these disputes are themselves multilateral disputes within ASEAN.  For varying reasons, the parties are disinclined to resort to international arbitration.  Even as it protests Japan’s claim, Seoul insists there is no dispute about its ownership of Dokdo and refuses to talk to Tokyo.  Ironically, Tokyo similarly denies to Beijing that there is any dispute over the Senkakus.  This has galvanized Beijing into actions that contest Japan’s de facto control of the islands in order to demonstrate that there is in fact a dispute.  In an apparent attempt to remake the Peter Sellers; film, “The Mouse that Roared,”Kim Jong-un has meanwhile produced a video musing about a north Korean attack on New York.  If it weren’t so dangerous, such a muddle of childish posturing would be entertaining.

But it is dangerous and, as I have suggested, a serious risk not just to the parties but to the global economy and to Sino-American relations.  We must all hope for statesmanship from Xi Jinping, Abe Shinzo, and Park Geun-hye.  No one outside their region can manage the exceedingly difficult politics of promoting a reduction in recent tensions and a return to a modus vivendi between them.  Meanwhile, it is time for new thinking about the problems posed by an unstable and bellicose north Korea.  Sixty years after the armistice that suspended fighting in the still unfinished Korean War, it may be time to replace those makeshift arrangements with a peace treaty in Korea.

It is a measure of how much the world has changed that the global financial community cannot afford not to mount a watching brief on events in northeast and southeast Asia.  The United States sees itself as the balancer and lubricator of regional relationships.  But current U.S. policies, including the much ballyhooed “pivot to Asia” are either irrelevant or aggravating factors in these regional disputes.  The American Lone Ranger is still brave, fast, and heavily armed but this will not help solve these disputes.

It seems that answers can come only from within the region.  Perhaps they will emerge from the second coming of Prime Minister Abe or the radical reorganization of the Chinese government and the redirection of its policies promised by General Secretary Xi Jinping at the current Communist Party plenum in Beijing.  Maybe they will emerge from an initiative by south Korea’s new president.  Few countries have as much to lose as Korea from the current trend toward the division of Asia into spheres of influence.  President Park is an able and imaginative woman.  Conceivably, Indonesia, ASEAN’s greatest power, could take the lead in composing Asian differences.

We are in the midst of an uncomfortable initial demonstration of the new centrality of Asia in world affairs.  Asian states, great and small, are working out new relationships among themselves and with the United States and the world.  The Indo-Pacific region is transforming itself from the world’s factory floor into its greatest consumer market.  Its currencies are broadening their global reach.  Asia is where the growth and the money both are.  And Asia is where, for better or ill, the future of the global economy and the course of the twenty-first century will be decided.