Concluding my year with the Center for America-China Partnership

Set this up with John Milligan-Whyte and Dai Min of the center last year while I was in Beijing with them selling the "grand bargain" term sheet that I've discussed plenty of times over the months since. It was a fascinating collaboration and I enjoyed fulfilling my one-year "adjunct" stint at the Center.

I wish John and Dai Min the best in their continuing efforts to improve US-China relations. Unfortunately, my increased participation in, and workload at, Wikistrat simply doesn't allow me to sign up for another year.

Then again, having Wikistrat take off is a very good thing.

US-China grand strategy agreement advertised in Foreign Affairs, new US-China Relations.net website launched

The following ad appeared in the current issue of Foreign Affairs, touting the work I performed with John Milligan-Whyte and Dai Min at the Center for America-China Partnership.

Go to the just launched US-China Relations.net website for more coverage (note that not all the videos are up and working yet).  Go there for printable versions of the PDFs.

I join the Center for America-China Partnership

Happy and excited to join the team/theme.  

China - US Grand Strategy Agreement Proposal

PRESS RELEASE
For Immediate Release: 31 December 2010

A proposed China-US Grand Strategy Executive Agreement between Presidents Hu and Obama formally delivered today to the China’s State Council and U.S. Ambassador was drafted by John Milligan-Whyte, Dai Min and Dr. Thomas P.M. Barnett with input from China’s:

  - Former Minister of Foreign Affairs;
  - Former UN ambassador,
  - Former U.S. ambassador,
  - Former Deputy Chief of the General Staff of the PLA,
  - Former Military Attaché to North Korea and Israel,
  - Former Vice Minister of Commerce,
  - President of Shanghai Institutes of International Studies,
  - China’s Central Party School Institute of International Strategic Studies,
  - Chinese People’s Institute of Foreign Affairs,
  - China Center for International Economic Exchanges,
  - China Institute For International Strategic Studies,
  - China Foundation for International & Strategic Studies,
  - Boao Forum,
  - China Institutes of Contemporary International Relations.

The resulting final text of the proposed executive agreement published in China Daily Online, World Politics Review and Seeking Alpha is posted for free download in the publication section at www.CenterACP.com.

The purpose of the executive agreement is to ensure that U.S. and China balance their bilateral investment and trade, never go to war with each other, the US will refrain from seeking regime change and interference in China's internal affairs and China will continue its political, legal, economic reforms.

It combines in three pages a comprehensive package of bilateral and multilateral breakthroughs not otherwise achievable in 2011 for:

  - U.S. economic recovery,
  - Increasing U.S. exports to China,
  - Balancing China-US trade,
  - Creating 12 million US jobs,
  - Reducing U.S. government deficits and debt,
  - Stabilizing the dollar, global currency and bond markets,
  - Protecting the security of sea transport,
  - Rebuilding failed states,
  - Reforming international institutions,
  - Ensuring collaboration on climate change remediation, energy efficiency, and affordable green technologies essential for rapid and effective pollution remediation globally.

To achieve greater economic stability it provides the new grand strategy and framework that align the economic and national security of the U.S. and China, which 192 other nations depend upon for economic recovery. Creating 12 million jobs for Americans in 2011-2012is essential for the U.S.’s economic recovery and creating support for the executive agreement among Democratic and Republican members of Congress, governors, mayors and the American people. In order to create the12 million U.S. jobs:

  - Chinese companies will invest up to 1 trillion U.S. dollars at the request of the U.S. President,
  - The U.S. will lift export bans on high technology,
  - China will purchase sufficient U.S. goods and services to balance their bilateral trade each year,
  - The Strategic and Economic Dialogues will become a permanently sitting commission for constant senior-level collaboration,
  - U.S. companies’ access to the Chinese market will be equal to the access that Chinese companies have in the U.S. market,
  - The U.S. and China will encourage global joint ventures between U.S. and Chinese companies.

To achieve greater geopolitical stability the executive agreement provides that:

  - The U.S. and China will hold regular joint naval exercises in Asian waters, with invitations to other regional navies; have permanent officer-exchange programs and create a joint peacekeeping force and command; and establish a joint commission collaborating constantly on U.S. and PRC technology sharing and budget expenditures.
  - There will be a reduction of China’s strike forces arrayed against Taiwan, a U.S. moratorium on arms transfers to Taiwan, and a reduction of U.S. strike forces arrayed against China. - China and the U.S. will support a reunification of North and South Korea. The U.S. will eschew its regime change goals for North Korea, which will terminate its nuclear weapons program, and China will assist North Korea’s economic reforms.
  - The U.S. and its allies will not attack or seek regime change and will eliminate trade restrictions against Iran and China will encourage Iran to suspend development of nuclear weapons.
  - China will create and invest in a South China Sea Regional Joint Development Corporation with other shareholders that have conflicting sovereignty claims and negotiate the eventual resolution of sovereignty disputes on the basis of the 2002 Declaration of the Conduct of Parties in the South China Sea.
  - The U.S. and China will harmonize and coordinate their roles in Asian Economic and Regional Security and relations.

The executive agreement is not a treaty, does not require U.S. Senate confirmation, does not constitute a "G2" or an alliance between the U.S. and China, nor replace existing U.S. alliances. It is an improved framework for collaboration among all UN members pursuant to the Preamble and Article I of the U.N. Charter.

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.

The final version of the Sino-American grand strategy "term sheet"

Downloadable PDF

U.S.-P.R.C. Presidential Executive Agreement 

For Peaceful Coexistence & Economically Balanced Relationship 

Prepared by John Milligan-Whyte, Dai Min and Thomas P.M. Barnett 

Dec. 14th, 2010 

Presidents of U.S. and P.R.C. sign an executive agreement containing each nation’s pledge that: 

1. U.S. and P.R.C will never go to war with the other; 
2. Each will respect the other’s sovereignty and distinct political and economic systems; 
3. U.S. pledge to eschew regime change in P.R.C. and of non-interference in its internal affairs; 
4. P.R.C pledges to continue its economic, social, and political reforms. 

Taiwan 

Pledged demilitarization of Taiwan situation, to include: 

• Informal U.S. moratorium on arms transfers to Taiwan; 
• U.S. President’s adherence to defense requirements of Taiwan Relations Act of1979 is achieved through the following alternative means; 
• P.R.C. reduction of strike forces arrayed against Island; 
• U.S. reduction of strike forces arrayed against P.R.C. Mainland; and 
• Negotiation and promulgation of confidence building measures between U.S. and P.R.C. militaries. 

North Korea 

Pledged de-escalation of strategic uncertainty surrounding North Korea nuclear program, to include: 

• U.S. eschews regime change in North Korea; 
• P.R.C. encourages North Korea to adopt economic reform policies to be implemented on terms appropriate to North Korea’s own situation; 
• North Korea agrees to terminate nuclear program and resume economic cooperation with South Korea; and 
• U.S. and P.R.C. support peaceful reunification of North and South Korea on terms and timetable determined by North and South Korea. 

Iran 

Pledged management of relations with Iran to include: 

• U.S. eschews regime change in Iran; 
• P.R.C to support Iran’s peaceful development of its nuclear energy program; 
• Iran to willingly submit to regular international inspections of its nuclear energy program; and 
• U.S. to eliminate trade restrictions and promote trade with Iran. 

South China Sea & East China Sea 

Pledged management of sovereignty disputes to be solved peacefully and bilaterally, to include: 

• P.R.C. sets up multilateral South China Sea Regional Joint Development Corporation with neighboring claimant states; and 
• P.R.C. pledges to negotiate resolution of all such disputes on the basis of the P.R.C.-ASEAN agreement entitled, “The 2002 Declaration on the Conduct of Parties in the South China Sea.” 

ASEAN Economic and Peacekeeping Collaboration 

U.S. and P.R.C pledge: 

• Harmonization and coordination of their respective roles in regional economic and security forums; 
• Pursuit of peaceful coexistence in their bilateral relations with other Asian nations; and 
• Promotion of economic stability and growth of ASEAN nations in their multilateral relations within ASEAN, APEC, etc. 

Military-to-Military Ties 

U.S and P.R.C. pledge to cooperate on international and non-traditional security issues, to include: 

• Lifting of U.S. embargo on military sales to China; 
• Regular scheduling of joint naval exercises in Asian waters, with standing invitations to other regional navies; 
• Permanent expansion of officer-exchange program; 
• Creation of joint peacekeeping force/command in conjunction with other countries within the UN Security Council framework; 
• Expansion of U.S.-P.R.C Maritime and Military Security Agreement to include frequency of U.S. close-in reconnaissance; and 
• Establlishment of joint commission collaborating annually on U.S. and P.R.C. technology sharing and transparency of budget expenditures. 

Existing and Future International Institutions and Issues 

U.S. and P.R.C. pledge to support continued reform of existing institutions (e.g., UN, IMF, World Bank, WTO, G20) to better reflect the evolving global economy and international issues, to include climate change, Doha Agreement, etc. 

Strategic and Economic Dialogue (SED) 

To implement the new collaborations: 

• SED becomes permanently sitting commission for continuous senior-level communications and collaboration on economic and security issues; and 
• SED reviews all existing tariffs, WTO complaints, and other trade and economic disputes and issues. 

P.R.C. Investment into U.S. Economy 

P.R.C. pledges to invest up to 1 trillion USD directly into U.S. companies at direction of U.S. President in exchange for: 

• U.S. removes trade restrictions and high-technology export bans with P.R.C.; 
• P.R.C. commits to purchase sufficient amount of U.S. goods/services to balance bilateral trade on annual basis; 
• P.R.C. companies’ access to U.S. market made equal to that of U.S. companies access to P.R.C. market; 
• Ownership limit for new P.R.C. investments in U.S.-owned or controlled corporations limited to 45 percent of shares, with additional 10 percent reserved for preferred equity/pension funds on a case-by-case basis and final 45 percent remaining with non-P.R.C. ownership; 
• Ownership limit for new U.S. companies’ investments in P.R.C. limited to 45 percent with additional 10 percent reserved for preferred equity/pension funds on a case-by-case basis and final 45 percent remaining with P.R.C. ownership; 
• U.S. and P.R.C. to facilitate global joint ventures between U.S. and P.R.C. companies, with initial example to involve major U.S. firm, possibly General Motors; and 
• U.S. and P.R.C. to collaborate in SED on goal of full employment throughout each economy, targeting in particular areas suffering inordinate unemployment or needing special economic growth arrangements. 

Other Areas of Bilateral and Multilateral Cooperation 

P.R.C. and U.S. to collaborate: 

• Implementing principles in the Preamble, Article 1 of the UN Charter; 
• Rehabilitation of failing and failed states seeking assistance; 
• Combining U.S. and P.R.C. markets, technology and financing to ensure affordable costs for all nations of effective pollution remediation and sustainable energy and financing of globally needed technology; and 
• Joint space exploration with other UN member states. 

No Creation or Operation of “G2” Arrangement 

Nothing in this Executive Agreement constitutes, is intended to, nor permits the creation or operation of a “G2”, and instead this Agreement: 

• Establishes an improved framework of collaboration among the U.S., P.R.C. and other UN member states; 
• Neither seeks nor infers any formal alliance between the U.S. and P.R.C.; and 
• Creates a new U.S. and P.R.C. partnership commitment to the Principles of Peaceful Coexistence in the UN Charter. 

Mutually agreed on the _______day of_________ 2011. 

____________________________________            ______________________________________ 

President of the United States Barack Obama           People’s Republic of China President Hu Jintao 

China Daily coverage of interview

Think tank offers plan for US-China relations

By Ma Liyao (chinadaily.com.cn)
Updated: 2010-12-08 14:23

BEIJING - The United States and China are at a point to establish a new collaborative relationship to deal with the possible conflicts emerging between the two big economies, which happen to be the world’s two big militaries, said analysts from a US think tank.

"The basic idea is that we need to clear out some of the strategic mistrust …that has at its roots an imbalanced economic relationship that we seek to radically rebalance in a direct way by encouraging investment from China directly into the US economy," Thomas P.M. Barnett said on Monday in an exclusive interview with China Daily.

Barnett, chief analyst at Wikistrat, an Israeli startup company that offers strategy consulting, is in Beijing to promote the “Whyte-Barnett Solution,” a new China-US grand strategy proposal he proposed together with his partner, John Milligan-Whyte and Dai Min, heads of the Center for America-China Partnership, one of the first think tanks to combine US and Chinese perspectives.

The four-page proposal suggests specifically on the investment floor to encourage large Chinese direct investment into the US market.

"I think the key thing is… to suggest to the American public the win-win opportunity here that … Chinese companies going global doesn’t result in a zero-sum outcome for the West," Barnett explained, adding that “it represents a very positive and potentially a very tremendous large-scale infusion of capital into distressed companies in the US and elsewhere.”

He said that he believed China will be interested in that kind of rebalance, getting the “less useful path” of discussion on the value of RMB off the table.

Talking about the recent military tension in northeast Asia, Barnett said that the key and crucial aspect is to increase transparency between the two militaries as much as possible, especially when there has been a lot of concern about China’s military building.

The US held a meeting in Washington on Monday with Japan and the Republic of Korea to discuss the current security situation in the region, without China, Russia and the Democratic People’s Republic of Korea’s attendance, after rejecting China’s proposal of a meeting among the six.

Barnett said that he didn’t see anything wrong with trying to reassure its long-time allies as long as it quickly progresses into Six-Party Talks, but “you have to include China every step of the way.”

"Because if not, you are not increasing the transparency."

Milligan-Whyte, the co-presenter of the strategy proposal, said that the global financial crisis is actually a good opportunity for China and the US to collaborate on a new strategy.

Between 2000, when China enter the WTO, and 2008, when the financial crisis hit the world, the US dollar appreciated about 40 percent. Between 2005 and 2008, Chinese yuan appreciated about 21 percent. But it did not help the trade deficit, which is around $260 billion to $300 billion a year now, said Milligan-Whyte.

"The trade deficit is caused principally because … the United States doesn’t want to sell high technology to China, which China therefore buys from Europe and … elsewhere," he said.

Milligan-Whyte said that he believed the financial crisis is still in its early stages and anytime in the next two years, the market will just freeze up. And the only thing that can prevent that is “this type of breakthrough in US-China relations.”

"You will see the financial crisis will be very hard for 23% of the American homeowners. It’s going to be 50%. Unemployment will be 25% in some places, and over 10% in others. It’s going to be a really terrible situation. That is going to trigger a new deal between China and the US."

Chinese Premier Wen Jiabao said on Sep 23 in New York while meeting US President Barack Obama that China is willing to push a healthy economic cooperation with the US, in hopes that the US would loosen its export restraints on China.

Chinese President Hu Jintao expressed a similar will months later in November while meeting with Obama in Seoul, urging the US to lift its export restraints and give Chinese companies a fair competition environment in the US market.

The Whyte-Barnett Solution is designed as a presidential strategy agreement.

Hu is scheduled to visit the US next year.

Additional repostings of this article:

• NationalPublicRadio (US)
• USAToday
• IndiaTimes (which thereupon also reposted this very post!)
• IndiaVision
• DailyIndia
• NewsTrackIndia
• OneIndiaNews
• Asian News International
• South Asia News
• SifyNews

China Daily interview video re: grand strategy term sheet

12-13 minutes long.  Find it here.