The year of the anti-tiger

WORLD NEWS: "China Complains to WTO About EU Tariffs: Petition Against Antidumping Duties on Shoes Extends Fight Against What Beijing Says Is Unfair Protectionism," by John W. Miller, Wall Street Journal, 5 February 2010.

WORLD NEWS: "Beijing feels the heat of mounting US anger," by James Politi and Daniel Dombey, Financial Times, 4 February 2010.

COMMENT: "It is the poor who pay for the weak renminbi," by Arvind Subramanian, Financial Times, 4 February 2010.

WORLD NEWS: "China's Export Focus Breeds Backlash: Developing Nations Join West in Criticism of Beijing's Policies to Support Its Factories Despite Fears of Global Imbalance," by Andrew Batson, Wall Street Journal, 6-7 February 2010.

OPINION: "Why Antagonize China?," by George Gilder, Wall Street Journal, 5 February 2010.

Great chart in first story: countries most affected by total protectionist measures, with China way out in front at 337, then the EU at 276 and the US at 213.

Welcome to the big boys club, Beijing.

But China is catching heat from all sides now: the EU is disillusioned, the US is intimidated, the other BRICs are feeling ripped off by the currency manipulation, and the developing Gap regions are feeling blocked by the same (i.e., the China model is unusable because China itself blocks replication by occupying such a wide swath of the global production chain), thus increasing their relative impoverishment.

Everybody wants the U.S. to carry the water on the currency issue, but we are uniquely ill-equipped--all our debt being carried by the Chinese.

And yet the pain caused by China's increased efforts at export growth (and clear success across this crisis) is so much more widespread. China's exports to fellow BRICs and Gap regions is skyrocketing, and so our complaints about "imbalance" are rapidly shifting from U.S.-centric to damn near universal.

So why are we being sold so heavily on this notion of the superiority of authoritarian capitalism? Are not the limits of the catch-up, export-driven developmental model apparent? Is this not beggaring-your-neighbor in new garb?

Still, no one with any sense wants to toss out the baby (the emergence of Asian capitalism) with the bathwater (resistance to single-party-rule China's clear mercantilism), so playing down to their low game with things like arms sales to Taiwan makes little sense, argues Gilder perceptively.

Iraq was not the first democracy to hold an election during significant civil strife

The first democracy that ever held an election during civil war was the United States--with a few states "abstaining."

1864.

When you gotta go, you should be able to go

FRONT PAGE: "Assisted-Suicide Pioneer Stirs a Legal Backlash," by Deborah Ball and Julia Mengewein, Wall Street Journal, 6-7 February 2010.

I am a big believer that people, in their old age and/or infirmity and/or disease should be able to choose the timing and method of their deaths. I think this issue only balloons as life spans are radically extended. People will demand the control and will demand the government stay the hell out of their decision-making--just like abortion throughout the vast majority of the Core.

China on rogues: hitting 'em where they (the West) ain't

WORLD NEWS: "China extends trade with Iran: Rivals EU as biggest partner; Beijing hesitant on Tehran sanctions," by Najmeh Bozorgmehr and Geoff Dyer, Financial Times, 9 February 2010.

China becomes Iran's biggest trade partner, overtaking the EU. China gets 11% of its energy needs from Iran. If that's total energy needs, then China relies on Iran a lot more than we do on Saudi Arabia. When measured as a percent of total energy usage in the U.S., the Gulf stands in the middle single digits, last time I calculated.

Does it mean Beijing will save Iran's bacon in a pinch? When we ran the NewRuleSets wargame back in 2005, we found that our Chinese team was adept at keeping Iran not quite America's problem and not quite Europe's problem and not quite China's problem--hence, almost nothing ever got done but the peace was maintained and China's energy bonds preserved. In retrospect, the game seemed highly predictive of the years to follow.

Are there two Ukraines?

WORLD NEWS: "Leader more at home in Moscow than Brussels: The likely victor will struggle to cement power and stabilize the economy," by Stefan Wagstyl and Roman Olearchyk, Financial Times, 9 February 2010.

Same weird vote split as last time: the entire West belongs to Tymoshenko and the entire East goes for Yanukovich. The geographic split, as stark as it is, reflects a Western desire to tilt toward Europe and an Eastern comfort level with Moscow.

To me that suggests two countries: a West that is more ambitious and confident and willing to compete with and across the EU, and an East that is more cautious and wanting to hold back.

So you have to wonder how a single government survives over the long haul if that profound split persists.

Garten, as usual, talking sense on China

COMMENT: "America can no longer go it alone with China," by Jeffrey Garten, Wall Street Journal, 9 February 2010.

The usual chest-pounding at bilats (seen under Clinton and Bush) will prove no better with Obama, because it didn't work back then and now China is much stronger and we're much weaker. Plus, back then the bilat approach made more sense: we sought to draw China out, but now it's plenty out all right.

Now China's impact is global, and so its dialogue with the world's great powers needs to be expanded beyond what will be an increasingly frustrating effort by the U.S. to steer Beijing on its own.

Conclusion:

The only policy that could move China from its deeply entrenched positions would be to weave a web of multilateral arrangements into which China could fit, and by which China would be bound. China would, of course, need to have a substantial say in the shape of such arrangements.

Upshot? More WTO and G20 and less reliance on these strategic dialogues.

China's weak efforts at cyber-deterrence

ARTICLE: 2 China Schools Said to Be Tied to Online Attacks, By JOHN MARKOFF and DAVID BARBOZA, New York Times, February 18, 2010

Fascinating article that describes what I consider to be China's rather logical and highly asymmetrical approach on deterrence vis-a-vis the U.S.:

Independent researchers who monitor Chinese information warfare caution that the Chinese have adopted a highly distributed approach to online espionage, making it almost impossible to prove where an attack originated.

"We have to understand that they have a different model for computer network exploit operations," said James C. Mulvenon, a Chinese military specialist and a director at the Center for Intelligence Research and Analysis in Washington. Rather than tightly compartmentalizing online espionage within agencies as the United States does, he said, the Chinese government often involves volunteer "patriotic hackers" to support its policies.

These are, in effect, clandestine operations that seek to create just enough doubt within the U.S. military about its ability to safeguard its nets that such fears may be enough to dissuade our contemplation of attack in this networked age.

Is it a tactic of the weak? Yes.

Does it make sense in this age? Yes.

Is it particularly provocative? Not really. It simply indicates that the Chinese are doing whatever they can to dissuade us from direct conflict, and that they see greater purchase of deterrence in this realm than in the traditional strategic ones.

At the end of the day, the Chinese are doing their best to bolster the notion that great-power conflict is too scary/complicated/uncontrollable/self-destructive to engage.

Oh, and they'll steal our industrial secrets wherever they can while they're at it. But that's true of everybody nowadays.

This is not an apology for Chinese actions, but simply an explanation that gets past the emotion.

There's much more to our relationship with China than politics

ARTICLE: Rift Grows as U.S. and China Seek Differing Goals, By EDWARD WONG, New York Times, February 19, 2010

All this really says is that America's role as a true global superpower doesn't match up well with China's current self-image, which is one of a middle-sized power that wants all its boxes checked (every little border issue resolved in its favor, etc.) before it's willing to talk seriously about global responsibilities.

We will live with that gap for the next decade or so, in my mind, and that's been my take for a while.

So when I say, seek out alliance with China, understand that I don't expect it to happen by next week--and I never did.

But if you want it to happen as fast as it can (later in this decade at the earliest), then the message needs to be consistent.

Is the USG the only purveyor of this message? Hardly. Washington controls only a tiny fraction of our overall relationship with China, just like Beijing's party bosses are only in control of a small fraction.

But we like pretending that it's all run by our two presidents, through summitry, and "crucial" disagreements/agreements typed up and signed by officials. Reducing the great complexity of this relationship to such absurdities is at once comforting (somebody's in charge!) and frightening (but what if our president says the wrong thing?!).

This is why I prefer the FT over the NYT on coverage of this relationship. The FT sees the larger underlying economic reality, whereas the NYT tends to overemphasize the politics.

I say, don't confuse economic force with political friction.

Troubled boat people link Somalia and Yemen

ARTICLE: Somalia refugees risk passage to Yemen, By Haley Sweetland Edwards, Los Angeles Times, February 15, 2010

The fundamental reason why Somalia and Yemen are linked in the universe of al-Qaeda: boat people traffic from the troubled former eventually troubles the latter.

(Via WPR's Media Roundup)

US-Iran deal thinkable

ARTICLE: Thinking About the Unthinkable: A U.S.-Iranian Deal, By George Friedman, Stratfor, March 1, 2010

Ultimately, everybody comes around to this eventuality.

(Thanks: Patrick O'Connor)

Land of Boone

Portrait of Daniel Boone, Boone Tavern, Berea KY. Hanging out with officers and spouses of the Big Red One at offsite. Speaking Friday.

Pirates bring people together

ARTICLE: Multinational policing curbs piracy off Somalia, By Nicholas Kralev, Washington Times, February 19, 2010

You take your optimistic precedents where you get them:

More than 20 countries are now taking part in an international naval force, and the membership of the Contact Group on Piracy off the Coast of Somalia, formed at the height of successful vessel hijackings last year, has grown from 24 to 47, said Tom Countryman, principal deputy assistant secretary of state for political-military affairs.

"What is perhaps more impressive is that the melding of United States, European Union, NATO forces, together with individual contributions by a number of other countries, including Russia and China, has been accomplished with a shared mechanism for coordination and de-confliction, and without the need for there to be a supreme commander in charge of the effort," Mr. Countryman said.

"We think it's a good model not only for the Gulf of Aden and the Somali basin, but also for future such endeavors," he told reporters.

So the Somalia pirate threat, such as it is, creates a nice corner of great-power security cooperation.

(Via WPR's Media Roundup)

FT: The need for consistency on China

EDITORIAL: "US policy to China must be consistent: President Obama has sent mixed messages to Beijing," Financial Times, 19 February 2010.

A nice statement on tactics:

The US should strive for partnership with China in their many areas of common interest. On human rights and Taiwan, it should state its disagreements frankly and openly. That is not the same as seeking confrontation. The US has little leverage and to pretend that it did would simply be counterproductive. There is, sadly, little the administration can do to help the Dalai Lama achieve his almost surreally reasonable demand for Tibetan autonomy. But it should not be seen to squirm when commending it.

If you limit "Tibetan autonomy" to just cultural issues, then I'll buy it, but true economic autonomy--much less political autonomy, is simply not in the works and won't be for the foreseeable future. I believe that the Dalai Lama's current pitch focuses on social-cultural issues, meaning he says he's for autonomy but not independence.

The next line is the real point:

The important thing is to keep both elements of the relationship to the fore, rather than fluctuating from one to the other according to circumstances--dismaying first the Chinese leaders and then the human rights activists and victims of China's abuses.

Amen. How this administration went so quickly from "strategic reassurance" to all this tough-guy posturing in about three months was truly stunning. It said, "I chase my tail as circumstances demand it."

And that won't get us any respect from the Chinese, much less flexibility.

QUIET! Africom quietly at work

WORLD NEWS: "Somali Troops Gird for Battle With Militants: Mogadishu Leadership Takes a Page From U.S. Counterinsurgency Playbook in Its Latest Effort to Secure the Capital," by Sarah Childress and Abdinasir Mohamed, Wall Street Journal, 19 February 2010.

Somali troops mass for offensive against al Shabaab, "the powerful al Qaeda allied-militia that has been trying to topple the government."

The U.S. role is deep background but meaningful: we train the African Union forces (about 5k Ugandan and Burundi personnel) that back up the Somali ones.

Africom isn't mentioned in this piece and no doubt prefers that, but I gotta believe they're in charge of all such training. Please correct me if I'm wrong to assume that.

Weird coincidence: the UN relief coordinator for Somalia is named Mark Bowden, not the US author ("Black Hawk Down") but a Brit.

Follow the green plastic road

ARTICLE: Plastic Roads Offer Greener Way to Travel in India, By MRIDU KHULLAR, New York Times, November 13, 2009

Cool story that makes a lot of sense: recycling plastic to make roads in developing regions.

Two birds, one road.

(Thanks: Jarrod Myrick)

Besides its rural poor, China has its hands full trying to not scare its neighbors

ANALYSIS: "A wider radius: South-east Asia; As China's economic and strategic influence grows, neighbours are benefiting in both aid and trade--but the fear of a new hegemony in the region is ever more evident," by Tim Johnston, Financial Times, 28 January 2010.

Good overview of growing unease across ASEAN (Association of Southeast Asian Nations--or all the small tigers and wannabes) regarding the new FTA (free-trade agreement) between China and ASEAN, creating an economic scheme covering 1.9b people (more than 1/4 of humanity) and killing tarrifs on 90 percent of the goods traded.

Naturally, everybody fears becoming economic vassals of China, not unlike LATAM states resent being attached to their huge neighbor to the north.

ASEAN's growing trade deficit with China: $6b in 2004 and now $22B.

Upside? ASEAN has four major suitors in all: China, India, Japan and the U.S. Better to have too many than too few.

True fanaticism: Wall Street year predictions based on Super Bowl winner (there's a historical catch!)

MARKETBEAT: "It's Good! Super Bowl Predictor Sees Market Grinding Out a Win: Easy Call as Both Teams Tied to Bullishness, but System's Record Shines," by William Power, Wall Street Journal, 29 Januray 2010.

The market goes up whenever an original NFL team wins, so the old school Colts versus the middle-aged expansion Saints guaranteed a good market outcome this year.

The market tends to go down whenever one of the pretender AFL teams win, and no, the Steelers were NFL-born. Another reason to hate the Pats.

This is true fanaticism: the idiotic, self-absorbed belief that, if your teams wins, your real-world life is greatly benefitted.

I am a true fan of the Packers in this regard--completely irrational. I'm only slightly irrational about the Colts--for my wife's sake.

North Korean super-statues: I understand the attraction

FRONT PAGE: "Monuments to Freedom Aren't Free, But North Korea Builds Cheap Ones: African Nations Turn to Hermit Kingdom For a Good Deal on Liberation Statues," by Christina Passariello, Wall Street Journal, 29 January 2010.

Frankly, I've always loved socialist realism art and statuary. I dig the scale and the romantic representation.

Just a funny little story about how North Korea, the only believers left, have cornered the bottom-of-the-pyramid market on "liberation statues."

It should constitute the Wikipedia entry on "irony."

Still, a country with that level of cult of personality has got to be the world leader on big, cheap and simple statues of "glorious leaders"!

There are good reasons for cities

ARTICLE: How slums can save the planet, By Stewart Brand, Prospect, 27th January 2010, Issue 167

Neat article that reminds us of the environmental opportunities presented by urbanization in all forms.

That's why I've never been a fan of the "failed mega-cities" line of analysis. Cities grow big for good reasons and are not the chaotic messes imagined--just the opposite. They're just a lot more self-organizing than most pundits realize.

(Via WPR's Media Roundup)

Mexico should hedge it's bets in Brazil

ARTICLE: As NAFTA Growth Slows, Mexico Should Look South, By Sean Goforth, World Politics Review, 19 Feb 2010

Interesting article that says Mexico has been let down by America's many unkept promises re: NAFTA and now faces an emerging alternative in Brazil that would seriously help it reduce its trade dependency on the U.S.

Sounds like a smart strategy to me.