More Chinese media coverage

Seemingly, a second Phoenix TV story on the "term sheet" discussion coverage.

My WPR column of this week (Obstacles to a U.S.-China Partnership Made in U.S.A.?) gets translated into Chinese and then posted by:

• Xinhua.net
• ChinaDaily.com 

The Chinese essay on the "term sheet" in Lianhezaobao（联合早报) of Singapore has been re-posted by the two influential website of China. See below:

• 星岛环球网 (Website Stnn.cc) 
• 中国选举与治理网(Website China Elections and Governance)

Our plans to bomb the length and breadth of China

From AirSea Battle:  A Point-of-Departure Operational Concept, by Jan Van Tol and others at the Center for Strategic and Budgetary Assessments.

Under the section, "Blind PLA ISR Systems," this is the map of all the sites we'd presumably want to bomb as early in the campaign as possible:

Then in the section, "Executing a Missile Suppression Campaign," here's all the sites we'd want to hit early as well:

Then here's the sub bases we'd need to strike as part of our "Defeating the PLA submarine force":

It's interesting for our president to meet China's and sign a joint declaration where both sides say they don't consider the other to be an enemy and then to have a Pentagon-favorite military think tank publish maps of strike sites all over China that we'd want to hit in the opening days of our war with the Mainland over Taiwan.

When you're that open with your plans, it's hard to describe anything the Chinese do in return as particularly "provocative." And yet, we do offer Beijing the benefit of our transparency on the subject.

Me?  If somebody publishes maps of the U.S. delineating all the places they'd want to bomb on the first day of the war . . . I'd take that kinda personally.  No, I'm not naive enough to believe the Chinese don't have theirs. But it takes a certain chutzpah to publish yours so openly while decrying Chinese "provocations" and "throwing their weight around."  China hasn't waged war in a very long time.  The U.S. does so regularly.  Whose maps should we take more seriously?

I know, I know. We must think these bad thoughts in order to prevent their occurrence. I'm sure we have similar maps for every country in the world yes?  Just to be certain?

Fox Business News interview on Esquire China piece & "term sheet" proposal

COMMENTARY:  Felt I did alright considering all the pain meds over the past few days (I went cold turkey this ayem).  My right ear certainly stands out!  If you look closely, you'll see black-and-blue bruising.  The ENT basically had to enter my ear canal from behind the ear, so it's like he cut it off and then sewed it back on--hence the absurd swelling and why my ear sticks out so.  But trust me, I look 1000% better than the day before, and then the day before that, and so on. When I got home Friday, I looked like some CG monster!

Feed was nice into my left ear, and because I couldn't hear anything out of my right, I was sort of nicely insulated (i.e., no listening to myself live in the room and feeling disconnected from my interviewer in NYC). Jerry sat off to my right and watched the whole show quietly, but he found it weird that I would suddenly speak and then go silent and then speak and then go silent and . . ..

Felt it was a decent performance, considering the surgery recovery and all.  Nice limo ride into Indy for it, which Jerry enjoyed.  Felt I mentioned Esquire and my Beijing partners sufficiently, and the book and Wikistrat got nice plugs.  Obviously could have gone on far longer and there was so much more ground I wanted to cover, but there you have it in 5-6 minutes.

Final indignity:  vid stops right when I blink, like somebody turned the robot off!

On Fox Business News today b/t 1100-1130 EST

The details:

SHOW: FOX BUSINESS DAYTIME
ANCHORS: DAGEN MCDOWELL & CONNELL MCSHANE
INTERVIEW WINDOW: 11:00-11:30AM ET

I hope to post link to online video once it's up.  Waiting on Fox.

Meanwhile:

• Singaporean Chinese-language newspaper Lianhezaobao covers the term sheet solution
• That story's picked up by Ta Kung Pao.

POSTSCRIPT:  Got to WFYI (local PBS) early and had some fun with son Jerry.

WPR's The New Rules: Obstacles to a U.S.-China Partnership Made in U.S.A.?

 

In a column two weeks ago, I described the outlines of a proposed grand-strategic bargain between China and the United States. Basically, the "term sheet" that I helped draw up proposed various bilateral compromises over the security issues -- Taiwan, North Korea, Iran and the South China Sea, among others -- that keep the relationship clouded by profound strategic mistrust. The resulting climate of confidence would encourage Beijing to invest some of the trillions of dollars it holds more directly into our economy, instead of simply using them to facilitate our skyrocketing public debt. Since the column appeared, I and my co-authors spent two weeks in Beijing meeting with top government-sponsored think tanks and retired Chinese senior diplomats to discuss and revise the proposal. I thought it would be useful to report on this dialogue.

Read the entire column at World Politics Review.

Esquire's Politics Blog: Obama's Afghanistan Review, Decoded

So the White House just released its much-anticipated review of our ongoing military efforts in Afghanistan (and Pakistan, mind you). And while President Obama, Bob Gates, and Hillary Clinton took pains to explain in a press conference on Thursday that "this continues to be a very difficult endeavor," it can also be very difficult to parse propaganda from, you know, the actual end of a modern war. But since this is a reasonably well-written document that the president's talking about here — and since it more or less outlines the past, present, and future of our troops' presence in region in a still-untidy five pages — it seems worthwhile to deconstruct the review line-by-line... and (white) lie-by-lie. Here goes.

Read the entire post at Esquire's The Politics Blog.

More Chinese coverage of grand strategy "solution" term sheet

Found here at the newspaper Ta Kung Pao.  This is a shot, left to right, of John Milligan-Whyte of the Center for America-China Partnership (New York/Beijing), President Chen Yulu of Beijing Foreign Studies University (which trains the bulk of China's diplomats), me, and Dai Min also of the Center.  That was last Saturday late afternoon/evening.  Across the table were a bunch of senior policy-experts/academics, the anchor of CCTV4 (I recognized her from watching her in DC when I catch it) and other press.  Beyond them were four rows of audience from all over the place. They did simultaneous translation (I'm wearing an earpiece you can't see). Maybe total audience of 60-75.

It was a good event:  opening bit from Chen, 5 or so from Dai Min, 20 or so from me, then John for 20, and then an hour of questions. Later a dinner.

The second s/c-ite comes from Phoenix TV out of Hong Kong. Basic summary of event (citing Takungpao story) and then interview of expert.

Filming was done by the Center of all of meetings.  I am expecting to have access to some edited compilation in the near term.  When I do, I will embed here from Center's site.

Bloomberg BusinessWeek pickup of my China Daily article

Found here.

Back home, finally.  Couple of days to get things done and then I have ear drum fixed.

The "term sheet" roster of dialogue

Some of the organizations we conducted meetings with, focused specifically around the grand strategy "term sheet," as we called it.

I will post a final draft of the term sheet agreement here in conjunction with a second WPR column that recounts the journey and summarizes the feedback/impressions gathered.

Here's the official rundown:

The Proposed China-US Grand Strategy Agreement was drafted by John Milligan-Whyte and Dai Min of the Center for America-China Partnership and Dr. Thomas P.M. Barnett of Wikistrat.

In the past week, we have been meeting series of distinguished individrals and institutions in China to discuss and improve this proposal. They are include but not limited to (in sequence of meetings):

• President of Shanghai Institutes of International Studies 上海国际关系研究院院长
• Former PRC Minister of Foreign Affairs 前中国外交部长
• Two Former PRC Ambassadors to US and UN 前中国驻联合国大使
• Former Deputy Chief of the General Staff of People's Liberation Army (PLA) 前中国人民解放军副总参谋长
• Former PLA attache to North Korea and Israel 前中国驻北朝鲜和以色列大使馆武官
• Former PRC Vice Minister of Commerce 前中国商业部副部长，中国国际经济交流中心秘书长
• IISS-PSCC - Institute of International Strategic Studies of Central Party School 中央党校国际战略研究所
• CCIEE - China Center for Economic Exchange, 中国国际经济交流中心
• CIISS - China Institute For International Strategic Studies, 中国国际战略学会
• CFISS - China Foundation for International & Strategic Studies. 中国国际战略基金会
• CPIFA - The Chinese People’s Institute of Foreign Affairs 中国外交学会
• The Boao Forum 博鳌论坛
• BFSU - Beijing Foreign Studies University 北京外国语大学
• CICIR - China Institutes of Contemporary International Relations 中国现代国际关系研究院.

To say the least, the lengthy dialogues in each instance were fascinating.  I learned a ton, because this time, instead of being in book promotion mode, the whole discussion centered around the proposal, which everybody really was thrilled to discuss. They kept saying that this was such a new and innovative way to to something like this, instead of the usual presentation of respective views that get bundled up in these joint statements (something the Chinese take very seriously but I can't say that we do on our side).

Much as in the case of the Russians today, I think China should be putting its own experts up on American TV rather than having their country interpreted by U.S. experts on China.  I think that if this was the case, Americans would view China very differently.  I just don't think the country's real story gets through.

WPR's The New Rules: Setting the Terms for a U.S.-China Grand Bargain

History tells us that, when a rising great power approaches the standing of the dominant system-shaping great power, conflict is inevitable, either directly or in such regions where their two spheres of influence intersect. The great counterexample is the acceptance by a "rising" America of the late-19th century of Great Britain's implicit offer of a "special relationship," which allowed the latter to punch above its weight throughout the 20th century. That alliance was subsequently forged in opposition to common enemies: first the Kaiser and then Nazi Germany, followed by the Soviet Union. 

China and the United States have no such common enemy of that stature. Lacking an obvious evil to fight, we are left with only an obvious collective good to preserve: globalization. This fortunate reality nonetheless encourages zero-sum thinking: China's inevitable rise is America's inevitable decline. Instead of a world to be shared and shaped, expert voices increasingly warn of a world to be divided and destroyed by wars over resources. 

To present an alternative to such zero-sum thinking, I've spent the past several months working with the Beijing-based Center for America-China Partnership and its chairman, John Milligan-Whyte, drawing up a proposed "China-U.S. Presidential New Grand Strategy Agreement." The document -- which Whyte and his partner, Dai Min, published in People's Daily Online last week -- proposes a diplomatic and economic "grand bargain" between China and the United States, one that breaks through the rising hostility and mutual suspicions that define the world's most important bilateral relationship. 

Read the entire column at World Politics Review.

Blast from my past: "Recasting the Long War as a Joint Sino-American Venture" (2007)

Recasting the Long War as a Joint Sino-American Venture

Thomas P.M. Barnett

Baker Center Journal of Applied Public Policy

Fall, 2007, pp. 34-44.

In this so-called long war against the global jihadist movement, the Bush administration’s greatest failure has been its lack of strategic imagination. It has added the right enemies to our to-do list, but failed to enlist the necessary new allies, giving our people the misperception that it’s America against the world.

This need not be the case. Our natural allies are now located on the frontiers of globalization, or among the three billion-plus new capitalists who joined global markets over the last generation, chiefly among them the Chinese.

The integrating core of globalization—namely the old West plus the emerging markets of the East and South—have effectively outsourced the global policing function to the United States by refusing to balance our immense warfighting and power projection capabilities with their own. Instead, Western Europe focuses on economically integrating the former Soviet bloc, while rising titans like China and India, for reasons of rising energy requirements, focus overwhelmingly on integrating—on relatively narrow terms—resource providers located in those regions least connected to the global economy, or what I call globalization’s non-integrating gap (e.g., the Caribbean rim, Africa, the Middle East, Central Asia, and the southeast Asian littoral states).

Not surprisingly, the Pentagon’s new map in this long war corresponds greatly to those gap regions, for there we find the preponderance of “moderate” dictators, rogue regimes, and failed states, all of whom either attract the attention of transnational terrorists or support their activities for their own nefarious reasons. Viewed in this light, our victory is logically defined as the successful building out of globalization’s core and the simultaneous shrinking—or successful economic integration—of those gap regions. As we’ve seen in Afghanistan and Iraq, this is no mean task and one that generates significant labor requirements.

So I say, locate the labor where the problem is.

A New Strategic Value Proposition

America has the wherewithal to wage any conventional wars necessary to defeat traditionally arrayed enemies (i.e., militaries). But in today’s “flat world” competitive landscape, war’s just the first-stage defensive acquisition. Real stability comes only after the second-stage postwar merger that extends globalization’s broadband connectivity to the previously disenfranchised masses and—yes, Virginia—exposes all that cheap labor to “exploitation” by outside capital that typically pays significantly higher wages than the local economy can muster.

Let me give you my definition of the value proposition here and see if it doesn’t make sense.

America’s got a first-half offering without peer: a Leviathan with an unparalleled capacity for war-making and the unspoken power of deciding when other states can make war themselves. What we lack is a credible second-half offering, or what I’ve dubbed a “system administrator” force capable of winning the peace through effective stabilization and reconstruction operations. Ultimately, this force needs to be more civilian than uniformed military, and fueled more by private sector investment than public sector aid. It also can’t be an American-only operation. The Bush administration’s big mistake in Iraq was telling allies, “If you’re not tough enough to show up for the war, don’t show up for the peace, and forget about any contracts!”

Based on our efforts to date in this long war, America currently fields a first-half team in a league that insists on keeping score until the end of the game. We lost less than 150 personnel in the Iraq “war” (major combat operations). We’ve lost more than 2,000 in the “peace” (postwar) that hasn’t quite followed.

So yeah, it matters.

Right now, our enemies in this long war field a better, more capable version of the sysadmin force than we do. Don’t believe me? Then you haven’t been paying attention to new entrants to the market like Hamas and Hezbollah, two tribe-building enterprises that excel at the second half while not even trying to compete in the first half, as Israel recently discovered in Lebanon and the West Bank to its growing regret.

So if the gap’s new entrants to the postwar market should be sizing our sysadmin force (just like the Soviets once sized our Leviathan force during the Cold War), it seems clear who should be increasingly populating the core’s second-half team today: new entrants to globalization’s “systems integration” market such as China and India.

Think about that for a minute. Stability and reconstruction operations associated with postwar and post-disaster environments require lots of bodies, both in terms of uniformed boots on the ground and relatively cheap labor to lay down all that necessary infrastructure—both hard (physical) and soft (institutional). China and India both have million-man armies, as well as a long-demonstrated willingness to send their best and brightest (along with their most desperate) civilians the world over in search of economic opportunity (e.g., “non-resident Indians” are outnumbered only by the multitude of “overseas Chinese”).

More to the point, the best nation-building brand out there right now is the Chinese model. I know, I know, it doesn’t meet our threshold definitions of democracy and human rights (not to mention coming nowhere near our EPA standards), but it sure as hell beats America’s post-Cold War product line of Somalia, Haiti, Afghanistan and Iraq. Let’s be honest: China’s leveraged buyouts, as mercantilist as they are, beat our hostile takeovers—hands down.

And that just tells you how bad America’s military intervention “brand” has become. Emerging from World War II, the world believed that an American invasion was a fundamentally good thing, or something that got you tons of aid and propelled you to the top of the pile (e.g., West Germany, Japan, South Korea). Back then there was no shortage of “mice” that wanted to “roar” for our attention, but somewhere along the way, probably thanks to the influence of nuclear weapons on our military strategy, we lost that second-half skill set, probably because it seemed pointless in a world perverted by the looming threat of mutually-assured destruction. So, starting with Vietnam, where we first displayed our sad combination of increasing ineptitude at, and discomfort with, the second-half game, our brand has suffered a precipitous decline.

So why not turn to the original market-maker in the field of “revolutionary war,” otherwise known as the People’s Republic of China? If we face a future of insurgents and what the our military calls “fourth-generation war” (in which our enemies seek to deflate our will rather than defeat our forces), why not ally ourselves with the best counter-insurgency model operating in those gap regions today, one that effectively—and rather preemptively—woos both dictators and failed states alike?

Put another way, you can invade the country and then start up your counter-insurgency/reconstruction ops (the American route), or maybe you might just co-opt the major players pre-conflict with investment offers they can’t refuse (the Chinese route). So maybe it’s not always the case that if you want it bad, you get it bad.

Don’t get me wrong. I’m not advocating America continues its whack-a-mole approach to regime-toppling interventions inside the gap, only to turn over the aftermarket opportunities to the Chinese . . . uh . . . actually, I’m coming uncomfortably close to saying just that. I just believe that if we combined our chocolate (military interventions with a moral compass) with China’s peanut butter (economic interventions with a practical mindset), we might actually come up with a whole superpower, or basically a joint offering that finally covers the market—as in, defeats our political enemies while connecting the economically disenfranchised.

I’m asking you to come to the inescapable conclusion that America under the Bush-Cheney management team has become an un-sellable global brand in a market (modern globalization) that we made. That’s just wrong.

It’s wrong because it gets our people needlessly killed and because our interventions end up leaving the targeted state more disconnected from globalization than we found it (or worse, increasing its negative connectivity in the form of criminal and terrorist ties), meaning we’re not making the world a better place and we’re discrediting ourselves in the process.

So I’m asking you to invest in something better, or what I think will truly answer the mail in this long war—a full-service superpower that can wage both war and peace effectively. Combine the United States, a seemingly unprincipled Leviathan willing to invade anywhere inside the gap, with China, a seemingly unprincipled sysadmin willing to invest anywhere inside the gap, and I believe you’re looking at a superpower built whole, a long war legitimately won, and a globalization made truly global.

Now let me take you through the prospectus.

Less Clausewitz, More Sun Tzu

We know full well that America can defeat any traditionally arrayed opponent in major combat operations, known as “phase 3” in Pentagon parlance. But both Afghanistan and Iraq show that we’re simply not up to snuff in “phase 4” operations, otherwise known as the postwar. As we’re not credible in the postwar, our enemies have simply ceased fighting us in the war, knowing that a persistent postwar insurgency can defeat an impatient superpower. If your enemy’s goal is simply to kill 3 or 4 of your personnel a day and he’s willing to throw virtually unlimited labor at that goal, you’re going to lose over the long haul unless you figure out how to deny him ready access to his labor pool. That means jobs are our exit strategy.

Run into this savvy fourth-generation-warfare (4GW) competitor enough times and the American public will inevitably tire of engaging in any major combat operations, sensing a pointlessly ineffective postwar outcome. When that happens, our enemies in this long war have achieved an effective lock out, fencing off the roughly two billion people in these gap regions for their version of fundamentalist isolation.

Get good at phase 4 operations, however, and not only are your war threats made credible, but likewise your up-front offers of—for lack of a better phrase—pre-canned bankruptcies for failing regimes. I mean, why not make a pre-emptive bid instead of launching a pre-emptive war? By doing so, we turn on its head Karl von Clausewitz’s famous definition of war as “ . . . continuation of politics by other means.”

Inside the Pentagon, strategists describe this goal as getting so adept at phase 4 operations that you can wage them up front, in the pre-crisis period known as “phase 0.” At this point, you’re in Sun Tzu’s preferred venue, and your battles are won long before shots are fired. You’re basically the peacekeeper and infrastructure builder who shows up before the crises boil over, effectively keeping the situation just cool enough to avoid a major military intervention. Think of it as limited-liability nation building.

Imagine the Iraq scenario this way: according to insider accounts, the Arab League convinced Saddam Hussein to agree to go into exile and avert a war months before the U.S.-led invasion occurred. In the end, Arab leaders abandoned the plan because of disputes among themselves over how it would have played out. No imagination required there: the region’s leaders were of many minds regarding the possibility of a real “cake walk” for the Americans. But consider this possibility: what if, at the right moment in that negotiation, a proposal is made for a consortium of Chinese, Indian and Russian elements (both governmental and private-sector) to run the postwar reconstruction? Imagine how the zero-sum sheen is rubbed off the potential American-dominated postwar occupation.

Then consider how the Chinese could have conducted the rebuilding of Iraq’s shattered infrastructure—on time and under budget. And then consider how President Bush’s “big bang” strategy (i.e., making post-Saddam Iraq a shining example of potential reform in the region) might have unfolded differently, primarily because popular expectations—both here and in Iraq—would have shifted from instant democracy to rapid reconnection to the global economy.

Seriously, do you think we’d have the same deprivations and lack of economic activity that fuel sectarian violence in Iraq today if we had picked the Chinese over the Coalition Provisional Authority? Or let me put it this way: could the Chinese have done any worse?

Do you find such a scenario implausible? Then you haven’t been paying attention to Africa recently. Anyone’s who done any business or peacekeeping in Africa in the past decade will tell you that the “China LLC” (with an emphasis on “limited”) is already up and running across most of the continent. For example, China recently became the 13th-largest provider of peacekeeping troops across gap regions, with a concentration in Africa (Congo, Liberia, Sudan) and a nascent portfolio in the Middle East (Lebanon) and the Caribbean (Haiti).

Chinese trade and aid throughout Africa has risen dramatically in recent years, to include a sandals-on-the-ground presence of 80,000 nationals. China’s goods are in every market, its vehicles ply every road (many of which are laid with Chinese funds and laborers), and its logistical and information networks are sprouting up everywhere valuable raw materials are found—especially oil.

Beijing recently hosted an unprecedented summit of 30 African leaders and guess what topped the agenda? It surely wasn’t the Bush administration’s soda straw view of globalization, otherwise known as the “war on terror.” Instead, the summit focused on debt relief, human resource development and training, investment and aid, and reduced trade barriers. Just survey America’s strategic debates concerning Africa today (“Do we intervene in Darfur with troops?” “Go back to Somalia to deal with the Islamists?” “Set up an Africa Command?”), and it seems clear: we’re stuck in a phase-3, Clausewitzian mindset while China’s winning early-stage, phase-0 contracts (and allies) in a way Sun Tzu would readily approve.

Whether we care to admit it or not, China effectively limits America’s strategic liability across Africa already. Sudan is a good example: many in the West want to criticize China’s large-scale investments in the nation’s infrastructure and oil industry. But quite frankly, absent the West’s interest in providing significant numbers of peacekeepers for Darfur, what China does in Sudan with its ongoing investments is limit our potential strategic liability.

In that forest, large branches may fall, but not the entire tree. So long as the latter does not occur, America hears nothing.

Cynical? Hell yes. But if we’re not going to beat ‘em, please don’t deny we’re implicitly joining them in this liability-limiting endeavor. As the world’s sole military superpower, America is the silent partner in every non-intervention the global community launches.

So No Rest For the Weary Leviathan

Let’s be honest about the capabilities at hand for solving Africa’s endemic conflicts (and they are so many). NATO (the Europeans) have basically “been there, done that” decades ago and exhibit little desire to return. Meanwhile, the African Union, the continent’s putative peacekeeping arm, is essentially the UN without the swagger (I know, hard to imagine). When the AU hit the ground in Darfur, for example, they quickly settled into a passive observation role, basically documenting the ongoing atrocities and little else (they shoot photos, don’t they?).

America needs to get real with itself. Africa is not ours and ours alone to ignore strategically, and it’s got to be so much more than just the experimental playground for Bono and the “two Bills” (Gates, Clinton). Tied down as we are militarily in the Persian Gulf, the U.S. shouldn’t look a gift horse in the mouth, because China’s effectively “prepping the battlefield” for us in Africa, and that’s where this fight heads next.

As the U.S. and its Western allies squeeze the balloon of the global jihadist movement currently centered in the Middle East, that balloon can expand in two directions: north into Central Asia and south into sub-Saharan Africa. This fight won’t go north simply because that region is surrounded by interested powers (e.g., Russia, Turkey, India, China) willing to do whatever killing is required to stop the spread of Al Qaeda’s influence—and yes, that includes Shiite Iran, no friend to the exclusively Sunni-derived radical Salafi movement currently fronted by Bin Laden.

So if it can’t go north, this fight’s heading south.

Frankly, it’s the combination of that inevitability plus China’s rising influence on the continent that drives the Pentagon to stand up an Africa Command (already in prototype in European Command’s Joint Task Force-Horn of Africa). But here we risk repeating the Bush Administration’s mistake of adding new enemies but no new allies. Instead of viewing China’s growing presence as a strategic complication, America needs to recognize it as a natural partnering opportunity.

Africa is enjoying an economic upswing, thanks in no small part to China’s rising resource draw. The continent’s business climate is improving dramatically, and about half of the world’s top-20 fastest growing economies can be found here. Hell, when American hedge funds start moving in, you know something’s brewing.

America has the sad tendency for viewing Africa primarily as an aid sinkhole, whereas maturing emerging markets like China view it as a logical target for future expansion. Yes, Beijing’s resource requirements drive everything for now, but think ahead to when China’s “inexhaustible” cheap labor supply dwindles due to higher production costs and a burgeoning middle class more focused on consumerism than savings. To whom does China outsource the low-end jobs while it scrambles up the production ladder? Clearly, Beijing will divert as many jobs as possible to China’s underdeveloped interior, and just enough to its neighbors to keep the regional peace, but eventually a good portion will flow to Africa, in large part to balance the very real imbalances created to date by China’s mercantilist trade profile.

There are plenty of China hawks in the Pentagon who are dead certain we’re headed for some military showdown with Beijing over Taiwan. But more of Wall Street is coming to the conclusion that our real competition with China is all about who makes the most markets in globalization’s gap regions. That makes Africa the logical ground zero in both the long war and this ever “flattening” global competitive landscape.

But you know what, this is exactly the kind of race America needs to be running.

Racing to the Bottom of the Pyramid

China today is not the market it was as recently as five years ago, when basically any foreign company and investment were welcomed with open arms, giving foreign multinationals control over roughly 60 percent of the country’s current exports. Today’s China sits atop a huge pile of domestic savings and approximately one trillion in U.S. reserve currency, giving it a confidence far distant from the fears barely suppressed during the Asian flu of the late 1990s. One way that confidence is expressed is increased developmental aid to trade partners, largely focused on accessing their raw materials.

As China becomes more outgoing in its foreign policy, however, its economic focus turns inward to a host of structural problems: its rickety financial sector, the imbalance between the booming coast and the dreadfully impoverished interior, and the rapidly aging population (no country in human history has ever aged as quickly as China will over the next three decades). Toss in the greatest migration in human history (internally, from rural to urban areas), and we’re talking about hundreds of millions of new consumers rapidly surfacing in China’s burgeoning middle class.

Thus, what was primarily an investment dynamic by which foreign companies rented China’s cheap labor for export creation now rapidly shifts into strategic alliances with rising domestic companies that Beijing not only positions to dominate the growing internal market but likewise plans on growing into successful global brands. This new inside-out growth strategy (i.e., domestic dominance leading to global dominance) is interpreted by many Western investors as a “nationalist backlash,” but as long-time China watcher Harry Hardin argued recently in the Wall Street Journal, this is a “marginal adjustment to, rather than a fundamental repudiation of, Beijing’s broader embrace of globalization.”

In short, China’s just wants to elevate its game.

The car industry is a good example. Western firms jumped into China years ago primarily to access the cheap labor on auto parts. But now, as China’s car market explodes (it’s already roughly the equivalent of the U.S. and European markets and soon to become the world’s largest domestic market), the strategy of such global giants as GM, Ford, Honda, and Volkswagen shifts from accessing labor to accessing customers. As Bill Ford Jr. recently told the Wall Street Journal, “We’re barely scratching the surface in China.”

There’s been a lot of hyperbole recently about how quickly Chinese automobile manufacturers can wedge themselves into the U.S. market as the third coming of Toyota and the second coming of Hyundai. But the real export opportunities in joint ventures with rising Chinese firms (e.g., Geely, Chery, Great Wall, SAIC) will appear first in other emerging markets and developing economies. It is in these lower-end markets that companies tap into what University of Michigan economist C.K. Prahalad dubs “the power at the bottom of the pyramid.”

That dynamic is important to consider as we contemplate the long-term integration of such gap regions as the Middle East, Africa, Latin America, and southeast Asia, especially as we retool our approach to postwar and post-disaster stability and reconstruction operations.

The problem is, when the rich, know-it-all Americans show up on the post-whatever scene, our tendency is to cost everything out at Six Sigma prices, when in reality, what’s typically appropriate is something on par with One or Two Sigma outcomes. We go for the grand and complex when the simpler and more robust usually works better in such austere environments. So it’s wireless, not landlines. It’s cell phones, not laptops.

Pricing out Africa’s integration at American prices makes no sense whatsoever. Africa is going to be a knock-off of India and China, which in turn can be considered knock-offs of Singapore and South Korea, which in turn can be considered knock-offs of Japan, Asia’s original knock-off of America. Think of it as a realistic “six degrees of integration.”

So gaining access to markets like China and India isn’t just an end in itself (i.e., cheap labor), even when investments subsequently penetrate the domestic market’s expanding opportunities. In the end, Western foreign direct investment into these new pillars of globalization’s core serves as a gateway to accessing the emerging-markets-after-next, or that next wave of infrastructure development found inside the very gap regions where this long war against radical extremism plays itself out.

Taken as a whole, the infrastructure building opportunities inside emerging markets—both existing and future—over the next three decades is considered by developmental experts as unprecedented in size. Asif Shaikh, CEO of International Resources Group, an international professional services firm specializing in developing markets, estimates that six trillion dollars of infrastructure will be built in the energy sector alone, with an additional four trillion dollars spent on water. Much of this work will occur in the twin pillars of China and India, so expect a roll-up of Western and local firms to create the multinational behemoths capable of handling this enormous flow of construction.

Then imagine what these resulting giants will be capable of accomplishing in postwar and post-disaster reconstruction environments in Africa and other gap regions.

The strategic importance of allying with Chinese and Indian firms is that they re-acquaint us with the twin realities of selling successfully to modest-wealth classes and building markets on globalization’s rough-and-ready frontiers, two skill sets many Western firms have essentially lost as our economies moved far away from such experiences. America’s last frontier, for example, closed over a century ago.

But it’s worth recollecting that market-making, frontier-integrating period known as the “settling of the American West,” because it reminds us of the intensely close relationship that once existed between our military and the private sector, something that was lost during the Cold War period, except in the rather closed club of the military-industrial complex. Now, as we look to postwar experiences in places like Afghanistan and Iraq, where new contractors galore have entered the nation-building market, it’s clear that the military-market nexus has once again become the centerpiece of our national security strategy—that is, if we’re serious about winning the long war.

Let me tell you, the Chinese are just as serious on this score as we are. To its credit, the Bush administration has spent a lot of time encouraging Beijing to become a “responsible stakeholder.” What the White House hasn’t done effectively is define—in a sufficiently expansive fashion—which stakes America truly shares with China.

An Offer They—and We—Can’t Refuse

Britain was smart enough at the start of the 20th century to hitch itself to the rising star in the West called America. That strategic mentoring role and resulting “special relationship” allowed the Brits to punch above their weight through three world wars (two hot and one cold). America faces a similar decision on China today: do we mentor Beijing into the halls of power or do we succumb to the realists’ predictions that war with the Middle Kingdom is inevitable in this “Pacific century”?

Britain went to war twice with fellow first-tier great power Germany in the first half of the 20th century and both were radically reduced to second-tier powers as a result, so I guess it all depends on how long America wants to remain a first-tier superpower. If the world isn’t big enough for a second one, then we’ve got a real problem. But is the world is ready for a superpower partnership . . . ?

The fact is, China’s already our silent partner in virtually every crisis spot around the globe. Want to fix Sudan? Better involve China. Want to tame Chavez? Better involve China. Want to economically isolate WMD-seeking Iran? Forget about it, because China and India (not to mention far-more-reliant-on-imports-Japan) have already made that call on both oil and gas. But help on taming Tehran? Under the right conditions, better involve China.

Then there’s Kim Jong Il.

It’s no secret that with the tie-down of American forces in Iraq we can’t do much of anything but bomb North Korea into the stone age, which—of course—would instantly trigger that which Beijing fears most: the mass flow of refugees north. So, in so many words (okay, just hearing Bush say the word “diplomacy” is enough), the Bush-Cheney team has let it be known that it would be fine by them if somebody rid them of this horrible man. You know, next time Kim’s train simply comes back empty.

Actually, the Chinese have studied the KGB-engineered fall of Nicolae Ceaucescu in Romania, going so far as to interview senior players there, so the concept of forcing Kim out from within is no joke. After all, Lil’ Kim runs a serious kleptocracy, and criminals can be flipped.

Then there’s what would be waiting on the far side of a united Korea: the makings of an East Asian NATO that rules out great power war on the continent. Simply put, it’s the biggest missing link in America’s current long war strategy, trapping—as it does—far too many of our military assets in a Cold War-era strategic posture.

But get an East Asian NATO set up and two things happen: 1) it frees up U.S. troops stationed there; and 2) we’re finally able to seriously tap the region’s trio of great powers (China, Japan, Korea) for military help in places where it’s more needed, like the Middle East and Africa. Finally, it’s important because, historically speaking, it’s not a good idea to have both Japan and China powerful at the same time without some sort of arrangement in place.

So what’s the state of our military-to-military relationship with China under the Bush administration?

In a word, guarded.

The Bush neocons came into power in 2001 obviously gunning for China. Remember the EP-3 spy plane incident off Hainan? Well, if Cheney and Rumsfeld hadn’t been interrupted by 9/11, that preview of the coming distractions would have been amazingly prescient.

Following 9/11, though, China fell off the Pentagon’s radar until . . . that is, when the most recent long-range planning cycle (2005 Quadrennial Defense Review) kicked into gear and many of the defense-industrial complex’s pet weapons systems and hugely expensive platforms were threatened by the ongoing operational costs (re: Iraq) of this long war. At that point, the China hawks went into overdrive and have stayed at that level since, cranking out warning after warning about China’s “huge” military build-up and how it threatens Taiwan and the rest of Asia.

How huge is that build-up? The highest estimates say that in twenty years China might be spending roughly half as much on its military as the U.S. spends on its military today! I don’t know about you, but I think our lead is safe for now. Plus, quite frankly, 85 percent of China’s arms purchases are from the Russians, so seriously, how bad can that be? Or did I miss something about who lost the Cold War?

Ah, but plenty of security experts will reveal—only on background, of course—that “if you only knew what I knew about Chinese attempts to [blank],” then you’d never even consider treating them as anything but globalization’s fifth column, just waiting to spring up and disable our entire economy with their cyber-jujitsu!

I say, it’s finally nice to have somebody surpass the Japanese and French in trying to steal our technology.

Seriously, every rising power in human history has sought to catch up to the leaders by engaging in persistent and pervasive economic espionage. America did it to the Europeans throughout most of the 19th century, begetting large portions of our industrial revolution in the process. Why should the Chinese be any different from the rest? The fact that they engage in such theft more over the Internet than the traditional route of sending their spies into our factories doesn’t make them unique. It makes them up-to-date.

Given all the situations where we’d like China’s help around the planet, the truly sad reality right now is that our military-to-military cooperation with the People’s Liberation Army (PLA) remains embryonic at best. For example, just as Kim Jong Il was popping his first nuke last summer, the U.S. Navy held its first-ever ship training exercise with a single Chinese naval vessel off the coast of San Diego. Seventeen years after the Berlin Wall and Tiananmen and that’s all we’ve managed.

Meanwhile, we’d love it if Beijing could somehow make Kim go away on its own, instantly shifting that security risk to China. I mean, talk about wanting to go all the way on the first date!

Outside of Asia, strategic risks are shifting against China, especially in the realm of energy security. Americans like to think we’re dependent on foreign oil drawn from unstable regions, but truth be told, we’re not. Roughly 70 percent of our imported oil comes from the Western hemisphere and Europe/Russia, with only 30 percent drawn from Africa and the Middle East (15 percent each), so that gives us a 70/30 split between stable/unstable sources, and those percentages aren’t predicted to change much in the future.

China, on the other hand, faces a riskier import profile over time. Today, China draws just over 40 percent of its imports from the less stable regions of Africa and the Middle East, but according to our Department of Energy, by 2030 that share will rise inexorably to almost 70 percent, making Beijing’s stability profile the mirror image of our own.

So it was no surprise to hear China’s top official on long-range energy planning recently propose that our two nations should come together to jointly explore, produce and—most importantly—protect energy sources in politically unstable regions.

You want China—as the Bush administration has long declared—to become a “responsible stakeholder” in global affairs? Well, Beijing just gave you a clear signal about which stakes matter most to China. Are we paying attention or just jerking knees?

When I go to Beijing and brief government and military long-range planners on these concepts, it’s easy to get a lot of warm smiles in reply. Hell, I’m making it sound like America’s got no choice but to partner with China all over these unstable regions. But you want to know how I quickly wipe smiles off those smug faces?

I tell them this: “For now, people inside the gap tend to equate globalization with Americanization, so we’re the bad guys they take hostage and blow up in the name of Allah and drive out of their lands to achieve their dream of civilizational apartheid. But know this, globalization is increasingly taking on a distinctly Asian flavor, with China firmly in the front, giving it a new face. Faster than you realize, you’ll see Chinese being taken hostage, Chinese being blown up, Chinese held up to the camera and having their heads cut off. And it’ll all happen because the radicals and extremists and jihadists and terrorists will inevitably come to this conclusion: the best way to drive off globalization is to drive off those infidel Chinese!”

Works every time.

Why? It’s one of the Chinese leadership’s greatest fears. That’s fundamentally why they keep such an amazingly low profile inside the gap despite the steep rise in their investments, peacekeeper deployments, and energy dependence. For now, America is the only place where fear of globalization equates to fear of China. But soon, that fear will spread to most of the planet, linking our two nations in the temptation common to all great powers: self-loathing.

Stuck in the Middle With Hu—For Now

The good news is, China’s self-limiting lack of self-confidence is going away as Beijing’s bosses experience a much anticipated generational shift from the so-called fourth generation (e.g., President Hu Jintao, Premier Wen Jiabao) to the far different fifth generation (the equivalent of our late Boomers, or roughly Barack Obama’s cohort born in early 1960s—like me).

China’s leadership generations go like this: Mao Zedong fronted the first generation of revolutionary giants (1949-1976), while the second (through the 1980s) was led by radical reformer Deng Xiaoping, who sent China down the path of markets and thus did more to shape our current world than any leader of the late 20^th century. The third generation, helmed by Jiang Zemin, ruled China across the 1990s and right through 9/11. Jiang’s was the first generation of leaders trained abroad, overwhelmingly in the Soviet Union—birthplace of socialism. This was crucial, because the technocratic tinge of that formative experience made Jiang’s generation confident enough to extend Deng’s reform movement further, creating the “China Inc.” we know and fear today in global business.

The current leaders, known as the fourth generation, did not travel abroad for their education, trapped as they were in the nationwide insanity of Mao’s Cultural Revolution in the late 1960s. The result? A careful bunch of homebodies whose foreign policy consists of the soothing slogans (“peacefully rising China,” recently scaled back to “peacefully developing China” lest it seem too confrontational) and whose economic vision has turned increasingly inward to focus on the left-behind rural poor of the interior provinces.

So it’s not too surprising that America hasn’t gotten very far with Beijing recently in any seriously strategic dialogue: our neocons aren’t asking and their fourth-generation leaders aren’t listening. Toss in ever-paranoid Taiwan as the figurative third monkey holding his hands over his eyes (i.e., unable to see future integration with the mainland), and you’ve basically got the entire dysfunctional matched set.

But real change is just around the corner—and I’m not just talking about the 2008 American presidential election.

Next year the Chinese Communist Party will most likely pick from among the fifth generation pool the leaders who will assume the reins officially in 2012 but whose lengthy succession begins rolling out almost immediately. This generation may be known to many of you already, because whether you realize or not, you went to college with many of them in the late 70s and early 80s. So yeah, this crowd does get America. In fact, these guys get globalization better than our current leaders do, because China is so much closer—historically speaking—to the infrastructure build-out process associated with globalization’s Borg-like integration wave.

What’s so amazing about this next generation is how they look at the world: a Kantian naiveté bordering on Thomas Friedman (“Got McDonald’s? You’re in!”). But beyond that wide-eyed optimism there is a growing and rather steely awareness that, as Spiderman’s uncle famously intoned, “with great power comes great responsibility.” Having spent days in deep discussion with this crowd, I will tend you what impresses me most about them is their earnestness. They are perceptively shifting—echoing John F. Kennedy’s generational call—from thinking about what the world owes China to what China owes the world.

There’s not a moment to waste.

When I last sat down with PLA strategists, I told them their biggest challenge over the next decade or so is rebranding their military from “revolutionary warrior” to “globalization’s security guard” in support of China’s role as globalization’s general contractor in the great build-out to come. This repositioning of China’s global security profile must be approached carefully, setting up easy wins that mark the PLA as both competent in its execution and trustworthy in its presence—especially in partnership with U.S. military forces. A joint response to Asia’s 2004 Christmas tsunamis would have been a good opportunity. It worked for the Indian Navy, but China’s military was nowhere to be found.

Over time, the Pentagon and the PLA need to prove out this strategic alliance in a series of early-stage engagements—preferably in Africa—that demonstrate how market economies—both old and new—come together to shrink globalization’s gap. Yes, I realize that many in my country consider the cultural and political gaps between America and China to be insurmountable in any time frame worth mentioning, but in my opinion, that Cold War mindset plays into the strategic goals of the global jihadist movement, which wants nothing more than to pit a rising East against an aging West with radical Islam as the great balancer.

I say we deny Osama that dream—as soon as possible.

Rehabilitating failed states is a labor-intensive process, because postwar and post-disaster environments—our most likely traction points—simply demand it. When you have a body requirement, you go to body shops, locating the labor where the problem is.

In the Cold War, our strategic triad consisted of missiles located on land, at sea and in the air. In the long war, many Pentagon planners have taken to describing America’s new strategic triad as the Army, the Marines,and Special Operations Command.

No argument there.

But what I’m telling you is that, on an international scale, we’re looking at a strategic triad consisting of the United States, China, and India—the three million-man militaries out there today (once North Korea is liquidated). This is the sysadmin’s strategic triad that, when backed up by half the world’s economic power come 2026 (according to The Economist), makes the dream of shrinking globalization’s gap entirely feasible.

But, as always, the way ahead is determined by will as much as by wealth, and here is where America’s current leadership vacuum is so damaging. We’re staring at two years of a badly wounded, lame duck presidency suffering the whims of a protectionist, know-nothing, Democrat-led Congress. So waiting on the politicians is not an option. President Hu Jintao’s recent tour of America demonstrated this in spades: the deep warmth on the west coast segueing to the damp cool in the Bush White House.

That’s why business leaders must play a leading role right now in transcending the lack of strategic imagination currently afflicting Washington, first and foremost by framing the subject of China in the already looming 2008 presidential race.

I know my argument will strike many as naïve, but I don’t believe it’s naïve to trust greed over political ideology, either in America or in China. I trust people to be exactly who they are, and I expect the Chinese to remain Chinese.

I also expect greed to drive much of our debates on China here in the States. On one side, we’ll find protectionists and defense hawks offering all arguments imaginable as to China’s “inevitable” threats and treachery. They will seek to make money off your fear—or, in the case of Lou Dobbs, just pump up his ratings. On the other side, we’ll find corporations and investors offering every opposing argument imaginable as to China’s unlimited” potential and market. They will seek to make money off your hope—and your fondness for Wal-Mart’s low prices.

But rest assured, both sides seek to make money off China’s rise. It’s just a question of who cleans up the most. My immediate goal is to see our Army and Marines get the funding they need to survive the challenges of this long war, and so long as China is held up as the holy grail of the “big war” crowd within the Pentagon, that shift in priorities—from smarter weapons to smarter soldiers—will not come about.

My long-term goal is to harness China’s rise for something beyond the final assembly of our low-cost goods. I believe that something is to become the final assembler of low-cost countries, a market niche that sole military superpower America needs desperately filled right now.

America cannot deal with its strategic future until its leaders finally let go of its Cold War past. History will judge us all very harshly for wasting the strategic opportunity staring us in the face.

Background slides re: grand bargain proposal

Drew these up as a way of putting my head in the right space before we attempted the first drafts of the proposal.

Esquire's Politics Blog: 5 Ways the U.S. Can Fend Off the Next Korean War

Well North Korea seems determined to stay on the front pages this month, having very proudly unveiled to a visiting American scientist a couple of weeks ago the existence of yet another uranium-enrichment facility (yes, it's apparently state-of-the-art and, yes, we already knew about it) and then launching an artillery barrage on Tuesday in self-declared retaliation for an apparently routine South Korea military exercise along the border. While it's tempting to write this off as just the latest shenanigans from Pyongyang designed to keep us on our toes, understand that virtually every all-out war scenario on the peninsula begins with a North Korean artillery barrage, so South Korea's decision to retaliate is no small matter.

Before this thing get out of hand too quickly, here's how the Obama administration can keep our already oversubscribed military away from another Axis of Evil war.

Read the entire post at Esquire's The Politics Blog.

 

New China-U.S. grand strategy proposal, as published in People's Daily Online

The Center for America China Partnership, Barnett Consulting LLP and leading  Chinese policy experts have been spent the past few weeks preparing a China-US Grand Strategy Proposal that was published on People's Daily Online yesterday, 22 Nov 2010. 

I will be in Beijing participating in meetings with Chinese government decision-makers and business- and thought-leaders regarding the proposal and other issues from December 3-13.

My next WPR column will offer my take on the piece, a bit more backstory, and plumb the same basic trade-offs. 

My point in this exercise: I wanted to explore what a serious and ambitious rebalancing of the U.S.-China relationship would logically entail.  Where would be the compromises?  What would constitute the breakthroughs?  

The full text:

Here is the package of arrangements in a new China-U.S. grand strategy implementing essential bilateral and multilateral breakthroughs, which current policies, proposals and ad hoc arrangements cannot create. 

When agreed upon by the presidents of both nations through an "executive agreement" not subject to U.S. Senate ratification, it will promote U.S. economic recovery, increase U.S. exports to China, create 12 million US jobs, balance China-US trade as well as reduce U.S. government deficits and debt. Furthermore, it will stabilize the U.S. dollar, global currency and bond markets. It will also enable reform of international institutions, cooperative climate change remediation, international trade, global security breakthroughs as well as facilitate the economic progress of developed and developing economies, the stabilization and rebuilding of failed states and security of sea transport. 

The essence of the grand strategy is that the United States and China will balance their bilateral trade and never go to war with each other, and the US will refrain from seeking regime change and interference in China's internal affairs with regard to Taiwan, Tibet, Xinjiang, the Internet, human rights etc. and China will continue its political, legal, economic and human rights reforms.

The Taiwan situation will be demilitarized by an informal U.S. presidential moratorium on arms transfers to Taiwan, China's reduction of strike forces arrayed against it, a reduction of U.S. strike forces arrayed against China and ongoing joint peacekeeping exercises by U.S., Chinese and Taiwan militaries.

The strategic uncertainty surrounding nuclear program in Democratic People's Republic of Korea (DPRK) will be de-escalated by the U.S. eschewing DPRK regime change goals and China ensuring that DPRK adopt policies along the lines of Deng Xiaoping's economic reforms and terminate its nuclear weapons program. China, U.S., South Korean and other military forces will together ensure maritime safety in the Yellow Sea.

The U.S. and its allies will not attack, invade or seek regime change and eliminate trade restrictions and promote trade with Iran. China will ensure Iran suspends development of nuclear weapons.

China will negotiate the eventual resolution of sovereignty disputes on the basis of the ASEAN Code of Conduct and propose and substantially invest in a new South China Sea Regional Development Corporation in which its neighbors Brunei, Cambodia, Indonesia, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam are shareholders.

The United States and China will harmonize and coordinate their roles in Asian Economic and Regional Security and relations with Asian nations to ensure the peaceful coexistence and the economic stability and growth of ASEAN nations in their bilateral and multilateral relations and roles in ASEAN, APEC, etc.

The United States and China will hold regular joint naval exercises in Asian waters, with rotating invitations to other regional navies; have permanent officer-exchange programs and create a joint peacekeeping force and command; establish a joint commission collaborating constantly on U.S. and PRC technology sharing and budget expenditures; and participate in a Peacekeeping Administrative System in which the U.N. Security Council functions like a prosecutor indicting individuals and nations violating the UN Charter, the United States and other U.N. members act as sheriff, and United States, China and other U.N. members provide economic and national security-building resources.

The annual Strategic and Economic Dialogue will become a permanently sitting commission for ongoing senior-level communications and collaboration bilaterally and multilaterally on implementing principles in the Preamble, Article 1, and other articles of the U.N. Charter. It will also focus on the rehabilitation of failing and failed states as well as the coordination of U.S. and Chinese technology and financing to ensure technologies needed for rapid and effective pollution remediation are affordable and to promote the development and financing of sustainable energy and globally needed green and other technologies. 

The strategic dialogues will also center on the procurement of other resources in order to ensure global economic growth and security and will pay close attention to economic and peacekeeping issues, including reform and innovations at the United Nations, climate change negotiations, IMF, World Bank, WTO, G 20, Doha Agreement etc. and joint space exploration with other U.N. members. The Strategic and Economic Dialogue Commission will review all existing tariffs, WTO complaints and other trade and economic disputes and issues. The United States and China will collaborate in the Strategic and Economic Dialogues Commission to ensure full attainment of job creation and employment and regional development goals throughout the United States and China in areas suffering from unemployment or needing special economic growth arrangements.

China will invest up to 1 trillion U.S. dollars at the request of the U.S. President to implement the following package of new economic and business relations. The U.S. will lift export bans on high technology put in place on the assumption of possible military conflict with China. China will purchase sufficient U.S. goods and services to balance trade each year in exchange for providing U.S. American companies access to the Chinese market equal to the access that Chinese companies enjoy on the U.S. market. 

The U.S. and China will encourage global joint ventures between U.S. and Chinese companies. An initial example of this will involve General Motors, which is currently 61 percent owned by the U.S. government. On a case-by-case basis, ownership limits for new investments by Chinese companies in American-owned or controlled corporations will be no more than 45 percent of each company's shares. Another 45 percent will remain with non-Chinese shareholders, and 10 percent will be reserved for U.S., Chinese and other nations' pension funds and other long-term investors. Similarly, the ownership limit for new U.S. companies' investments in China will be 45 percent with 45 percent remaining with Chinese ownership and 10 percent reserved for U.S., Chinese and other nations' pension funds and long-term investors. 

Nothing in this grand strategy constitutes, is intended to nor permits the creation or operation of a "G2," nor creates an alliance between the United States and China, nor does it replace U.S. alliances. Everything in the grand strategy creates an improved framework for collaboration among the US, China and other United Nation members and facilitates the U.S. and China and all other nations' economic and national security being aligned pursuant to the Preamble and Article I and other Articles of the U.N. Charter. The agreement and implementation of this new grand strategy will immediately and sustainably reset the global economy and increase the economic, national security and progress of all nations, which is urgently required to prevent the global financial and resulting plethora of economic and national security crises from continuing to destabilize all nations. 

This grand strategy proposal was created in a collaboration of John Milligan-Whyte and Dai Min, authors of China and America's Leadership in Peaceful Coexistence: China-US Relations in the Obama Administration: Facing Shared Challenges and other seven books in the America China Partnership Book Series, and Dr. Thomas P.M. Barnett, author of The Pentagon's New Map, and Blueprint For Action: A Future Worth Creating and America and The World After Bush, and leading Chinese policy experts.

The articles in this column represent the author's views only. They do not represent opinions of People's Daily or People's Daily Online.

WPR's The New Rules: The End of the U.S. Security Backstop

The global financial crisis was a true system perturbation, revealing the gap between widely perceived risk and actual underlying risk in the world's increasingly integrated financial system. As with any such vertical shock, the resulting horizontal waves continue to be felt long after the initial blow. When gaps in capabilities and rule-sets were subsequently discovered, the world's major economies effected changes, like shifting economic oversight from the G-7 to the expanded G-20 and updating the Basel banking accord. In a world without true global government, these surges of great-power cooperation constitute a critical reassurance function, letting us know that an international commitment, however vague and informal, exists to backstop each nation's individual backstops already in place.

Read the entire column at World Politics Review.

Strange Days (follow up)

Good comments below, triggering this follow-up

I don't argue for not having a strong military and I don't argue for pulling out of regions in terms of bases, even as I want them to shrink in size (more ATMs, less branches).  But I think the passive-aggressive hedge (I'm keeping an eye on you, buster, don't think of making a wrong move in your neighborhood, because here I am, ready to lay down my law!  Oh, and by the way, if you're willing to be my junior partner on all things, I might have a spot for you in my posse.) is counterproductive and oddly detached from the larger economic reality.

So I'd use my force to embrace China security-wise as quickly and as broadly as possible.  I lose nothing in doing this--capabilities wise, and gain a ton of transparency on their side.  I don't pretend that cooperating with them gets me everything I want on every security situation on the planet where our interests collide/overlap. I expect to bargain on all of it if I want the Chinese to truly be my ally.  

So I get off my f--king high horse and extend a hand, choosing to accept satisfycing answers more often than I-get-my-way outcomes.  To me, that's realism, while this I'm-going-to-manage-the-entire-security/democracy-world-agenda-on-my-terms-while-expecting-to-bully-people-on-economics-and-pretend-I-get-to-yea-or-nay-on-great-powers-like-China-rising is just nuts.

Our definition of a "responsible stakeholder" is "do everything the way I want it and THEN you can be my friend!"  That's not how you treat an ally; that's how you treat a dog.  If we have FDR today, he'd deal and he'd deal with confidence.  That guy believed in his system, and had no fears dealing with authoritarian regimes. But we don't have any FDRs today.  Reagan and Clinton were the last, it seems:  guys who knew how to cut deals, compromise, move the ball--with confidence in their country and its future.  Now we have such little people with little minds (yeah, Bloomberg said it and I repeat it!).  We bluster and we strut and we're being ignored more and more--a trend I trace back to the beginning of W's 2nd term (Katrina proves we can't nation-build abroad or at home).  

Obama made everybody like us for a bit, but the realization abroad takes hold again relatively quickly, thanks to the global recession:  we are not serious about dealing with our own problems and hence we're not willing to make deals, so we are not to be taken seriously.  Obama on Afghanistan is proof positive (Get the Russians in there! Get China in there!  Get India in there!  Get Turkey in there!  Even get Iran in there!  Cut the deals and stop running to NATO for permission!), so is the goofy nuclear-free-world nonsense.  He keeps trying to recast the problem so it seems like we're being flexible while, foreign policy-wise, he's just as rigid and unimaginative as Bush and the neocons were.  This is not community consensus building here, this is deal-making--real politics.

So yeah, I cut the deals to lock in China at today's prices (higher than in 2005, when I first proposed, but there you have it). And then I'd make other breakthroughs possible on diplomacy and economics, like attracting a good-sized chunk of that money they've accumulated to revitalize myself.

Oooh! You'd say. Taking money from our betters?  We took money, and lots of it from the Brits after two wars with them. We went a long way to making China what it is today by encouraging its return to the world and encouraging and enabling and accepting its export-driven rise (allowing them to do to us what Japan and South Korea did before), so I have zero problems tapping their reserves to rebalance the global economy directly by revitalizing my economy.

Plus, long term I love my country's chances and find China's kinda scary by comparison, so no, I'm not threatened by an even closer economic embrace.  I know exactly what America is capable of, and I trust in our resilience completely. I'm just being uber-realistic here on what "rebalancing" really means, where I think a lot of people are not being realistic whatsoever (just cut taxes and we're home free!).

So when we do this passive-aggressive hedge, we not only threaten our banker, we threaten the key investor source going forward, and that's just not thinking in a grand strategic way (which most dumbass types think means thinking ahead about possible wars and possible opponents and little else), even as it may make sense from national security's narrow perspective.

But again, if you want to think truly strategically, it's thinking about war but only within the context of everything else--which is looming large right now.

Strange days

Economist cover story on coming wave of Chinese takeovers.

As the chart shows, China's outward stock of FDI (accumulated overseas foreign direct investment) remains low, by historical standards.  But since it's got the money, it's naturally going to rise.

Fascinating really:  you can see the decline of the British empire, then the US stepping in to fund so much of the world post-WWII, and then our own progressive decline as the rest of the West recovered, then Japan rose (and fell), and now China rises.  Naturally, some will wish to make the comparison of the decline of the US "empire" with that of the Brits', but our system was never set up to maintain dominance.  It was set up to encourage the rise of others peacefully, which it's done (65 years of no great power war and counting, the biggest increase in human wealth/income ever seen, billions avoid poverty).  The world simply couldn't handle the rise of great powers--until we came along and forced a system that could. It is, without doubt, the greatest accomplishment of any great power in human history.

But with our success comes adjustment, especially since, in our most recent decades of encouraging globalization's rise, we got addicted to the cheap money mindset afforded us by having the world's reserve currency.  Again, granted, the rise of so many powers simultaneously in Asia is a huge accomplishment, but now we seem intent on turning that wonderful thing into something dangerous--dangerous enough to torpedo the system.

And we're alone in this quest.  NATO's new strategic concept, as summed up beautifully by The Economist, is to expect "fewer dragons, more snakes."  But we seem to reverse that equation, at least in our AirSea Battle power-projection forces (Navy, Air Force).  I realize we've been Leviathan for a long time, but we're setting ourselves up for hedging/containment/struggle with our bankers--truly an awkward choice.  

And we're sending these tough signals at a time when it's clear, if we're going to tap inbound FDI in coming years, we best figure out how to accept it from China, lest we go into a funk that calls into question all manner of met responsibilities around the world.  

China is most definitely cheating its way to the top, just like we did in the 19th century, and more recently in the obviously mercantilist rise of both Japan and South Korea.  We imagine them cheating their way right past us, but, as history has shown, it's one thing to dig stuff out of the ground, make steel and then build buildings and infrastructure, but it's quite another thing to dominant innovation-based industries.

China has its way of taking over Western companies, and the flavoring smells of all sorts of legacy communist mindset (meaning, state in charge), but what is the great success rate here? Not as high as imagined.  They have no secret capabilities, just secret plans they imagine are unique and unfathomable. They are neither.  

The more China reaches out and tries to own, the more it will become subject to global rules, just like any other firm that operates effectively.  If China chooses politics over efficiency, its "reign" will be historically short, and its vast pool of money mostly wasted.  

We can pull for such an outcome--most definitely.  But it's a cutting-off-our-noses-to-spite-our-face logic.  We can benefit from China's money.  Indeed, it seems hard to imagine our recovery without further integration with those to whom we've sent so much money, thanks to our deficit spending.  It will not be an easy path. We'll be working out this clash of cultures mentally in movies, TV and books for years to come, just like we did with the great Japanese "threat" that preceded. The only real difference here is size--as in China's market and wealth and our responsibilities and debts.  

So no, at this time in history and globalization's evolution, I wouldn't be arguing for the U.S. to be planning and preparing openly for war with China (how else do you describe the AirSea Battle Concept?), no matter how carefully I hedged my language. Everybody knows what we're capable of, and that we have the only great-power military in the world with any sort of hardcore recent combat experience (and lots of it). By doing this, we invite uncertainty at unacceptable levels and risk China's long-term effort to shut us out of Asia defensively, because, yeah, a rising power of that size and strength deserves its place in the world--not merely the small space in its own region that we offer it. Did Britain have military bases surrounding the U.S. during it's rise in the late 19th century?  Did it constantly get up into our grill?  No, it was more sensible than that and we should be too.

China's integration into the global economy enters a whole new phase now. We can accept that and seek to shape it--hopefully to our own short-term economic advantage, or we can play long-term blocker, and watch the money and the relationships go elsewhere.  

Europe isn't preparing for war with China, but we are.

WPR's The New Rules: Globalization's Massive Demographic Bet

By calling the Chinese out explicitly on their currency manipulation in his concluding address to the G-20 summit last week, President Barack Obama may have torpedoed his relationship with Beijing for the remainder of what China's bosses most certainly now hope is his first and only term. Burdened by a Republican-controlled, Tea Party-infused House, and bathed in hypocrisy thanks to the Fed's own, just-announced currency manipulation (aka, QE2), Obama seems not to recognize either the gravity of his nation's long-term economic situation or the degree to which his own political fate now hinges on his administration's increasingly stormy ties with China. 

Read the entire column at World Politics Review.

Obama zigged in India when he should have zagged

Good FT op-ed by Mansoor Ijaz, who "jointly authored the blueprint for a ceasefire of hostilities between Indian security forces and Islamist militants in Kashmir in July and August 2000," so he knows from where he speaks.

In line with my bit about making India happy before Pakistan, he says you need to make India happy enough to chill Pakistan if you want any sort of real answer on Afghanistan, which I would thereupon say needs some Indian effort/presence to boot (piling on, perhaps, but if you're going to make such effort, why not get maximum response?).

Starts with story about how in 2004 the Indian intell discovered a jihadist plot to kill Musharraf and immediately decided to tell the Pakistanis about it, averting in their minds that disaster.  The logic?  The terrorists were now everyone's problem, says Ijaz, "for Pakistan is a country that can no longer manage the monsters it has created."

Ijaz's primary sale here is an "open security architecture" for the region, by which he means one helluva lot more transparency than currently exists.  

Frankly, the same should be done on the South China Sea with China, to include the subsets of NorKo and Taiwan.  There simply should be no joint exercises that don't include damn near everybody.  Why?  We are fooling around with very important countries in a fairly fragile global economy--simply put, bigger fish to fry.

Ijaz argues that if we got the Pakistani and Indian militaries/security forces cooperating openly, then:

Such co-operation would reduce stress not only along the Indo-Pakistani border, enabling those resources to be spent elsewhere in stabilising Pakistan, but also in Afghanistan, where Islamabad perceives an Indian effort to squeeze it out of a traditional power base. Defusing mistrust here is critical. As a confidence-building measure, India could for example ask Pakistan’s military to join its own in training the new Afghan army.

Same trade answer useful here as in the Korean peninsula, where the US should ratify its free trade agreement with South Korea immediately:  get an Indian-Pakistani free trade accord.

And so on and so forth.

My point:  Obama comes and makes this empty gesture of supporting India's bid for a permanent UN Security Council seat. "Empty" because it's not his to give and very unlikely anytime soon, so he offers it at zero cost/risk.

Instead, as all the media coverage notes, he references common terror threats and totally sidesteps the Kashmir issue--again an empty gesture as far as the Indians are concerned, because their terror fears start there, as do Pakistan's need to keep those networks and militias available for employment against India. Unless we eliminate that requirement, Pakistan will continue double-dealing with us, and the Afghanistan solution will not come.

Good piece, good logic.

So far Obama's done an unimaginative rerun in Afghanistan of Bush logic in Iraq:  surge + no real regional diplomatic dealmaking. We get away with it in Iraq because the dominant group was allowed to win, and its tentativeness ever since has been due to our letting the dominant group win.  We face no such neat opportunity in Afghanistan. To settle that place, we need to settle the Pashtun, and to settle the Pashtun, we need to settle Pakistan, and to settle Pakistan we need to get India in the right space with Pakistan.

The bold move would have been to get that rolling on Obama's big-time trip to India, but, unless I'm missing something here, that did not happen. The coverage I've read said Kashmir was strictly avoided.

And that, to me, sounds like a president--notwithstanding the Nobel--overmatched by the dealmaking required to make some genuine peace happen.  Obama either lacks the imagination or the will, because that was a wasted trip.

Again, cool all right, just empty in outcomes.

WPR's The New Rules: Using China to Scare Ourselves Straight

Judging from the accounts of virtually every pundit, the Chinese emerged as the foreign threat of choice in the just-concluded U.S. elections, with the breakthrough “Chinese Professor” ad being compared by the always-calm James Fallows to such incendiary hall-of-famers as “Daisy Girl” (1964) and “Willie Horton” (1988).  I’m with Fallows:  The exceedingly clever ad represents a crystallizing moment in our increasingly contentious relationship with China, elevating the Chinese far beyond Iran’s mullahs and Osama Bin Laden as the pre-eminent fear-driven threat dynamic motivating calls to get our house in order.

Read the rest of the column at World Politics Review.