Thursday, October 29, 2009

Public Policy in a Globalized World

One of the most exciting parts of my new job at the Batten School is to learn about the public policy issues facing the United States. In my inaugural lecture as dean, I spoke about one particularly important aspect of the American public policy agenda: the fact that public policy is being made in an increasingly globalized world, in ways that affect both the substance of policy and the process by which it is formulated.

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One of the most exciting challenges in building a new school of public policy at the University of Virginia is to design a curriculum that is suitable to the dramatic changes that are occurring in the twenty-first century. A school of public policy freshly designed today will look quite different, I think, from a school of public policy that was organized forty years ago, let alone eighty years ago.

One of the most important of these contextual changes – although not, as we will see, the only one – is globalization. Both the practice and the teaching of public policy must take into increasing account the fact that public policy is being formulated in a globalized world.

I want to address this topic under three headings:
  1. What do we mean by globalization, and why is the process of globalization occurring?
  2. How is globalization affecting the public policy agenda in countries like the United States?
  3. Equally important, how is globalization affecting the process by which public policy is made?
Globalization: what and why?

By globalization I mean the increasing level of interaction across national borders. This involves not just the flow of goods – the increasing volume of trade with which we are so familiar – but also the increasing flow of capital, people, technology, ideas, and viruses – both biological and electronic.

As my reference to viruses suggests, these flows can be either negative or positive in their impacts. Trade can involve trade of consumer goods and advanced technology, or trade in illicit drugs or the precursors for weapons of mass destruction. The flow of capital can finance productive investment, or create unhealthy asset bubbles. People crossing national borders can include tourists, businesspeople, and migrant workers; but also criminals, terrorists, or illegal immigrants. Ideas that cross borders can spark further innovation, or be regarded as alien and subversive. And alongside computer viruses and biological viruses can flow polluted water, smog, and greenhouse gases.

Why is this increased interaction occurring? Thomas Friedman has famously argued that globalization is a “fact, not a choice.” In reality, it is a bit of both.

The basic fact is that there have been several revolutions in technology that are facilitating globalization, by increasing the speed and reducing the cost of international transactions.

Many of the revolutions in speed actually occurred sometime ago. We do not communicate that much faster today than we did in the age of the telegraph and the telephone. E-mails and text messages travel at the same speed as telegrams and telephone calls – they are virtually instantaneous, although e-mails, text messages, and now phone calls no longer need the intermediacy of an operator to send them or place them. Similarly, we do not travel by sea that much faster than in the steamships of 100 years ago, or by road that much faster than the cars of 50 years ago. (In fact, because of congestion, road travel may be slower in some places.) Nor are simple calculations of today’s computers that much quicker than those of the first electronic calculators.

But other recent technological revolutions have involved speed – especially when we add to our assessment the volume of transactions that can occur at a given speed. Not only are jet aircraft faster than propeller planes, but the most modern generation of passenger jets can fly longer ranges without refueling and can carry far more people. Even more impressive is the volume of transactions that computers can handle, such that the centralized institutional computer center – exemplified by the annex next to Garrett Hall here on Grounds – is largely obsolete, replaced by much smaller although equally powerful desktops.

Perhaps most important, the cost of these transactions has collapsed. What was once prohibitively expensive (an international telegram or a transoceanic phone call) is now virtually cost-free – at least in terms of its marginal cost (an international e-mail or a phone call through Skype). And what was already affordable is now vastly more capable (today’s notebook computer compared with a laptop even ten years ago). According to data that I once learned from Joseph Nye, if the cost of automobiles had fallen at the same rate as the cost of computers, the most recent model of the Fiat convertible that I bought as a graduate student in the early 1970s would cost only $5 today.

Friedman is correct when he says that these technological facts are a major driver facilitating globalization, because they make the international transactions so much faster and cheaper. But that is not to say that globalization has not also involved choices. The present era of globalization is the result of societal decisions to reduce the barriers that once restricted the flows of goods, capital, people and ideas. China’s decision to move from autarky under Mao Zedong to integration with the global economy under Deng Xiaoping and his successors is perhaps the most dramatic example. The creation of economic unions (like the EU) and free trade agreements (like NAFTA) are somewhat less dramatic but equally important examples of choices to reduce the barriers to international economic, commercial, and societal interaction.

But just as some societies have chosen to eliminate barriers, others have chosen to retain them, all or in part. North Korea remains highly autarkic. India retains high barriers to incoming investment. Countries like India, although gradually liberalizing, remain highly protective. Even China, despite its overall embrace of globalization, retains various restrictions on imports, incoming foreign direct investment, and internet communication.

Nor are the decisions to liberalize necessarily permanent. Even in normal times, some aspects of globalization – the lower barriers to trade, investment, and migration – are highly controversial and contested, as the major demonstrations against the WTO and the G-8 in major cities have demonstrated. In the current global financial crisis we have seen an upsurge of trade and investment protectionism, as well as calls for tougher restrictions on illegal immigrants. And were there a major terrorist attack that targeted international aircraft, or that utilized international shipping to carry WMD, we would see – at least temporarily – the imposition of quite draconian restrictions.

Given these revolutions in both technological facts and policy choices, it is perfectly appropriate to ask whether the present levels of globalization are unprecedented. To some extent, the answer is “no,” in that societies have been interacting with one another, people have been on the move, and diseases have been migrating from one society to another throughout human history. Arguably, in fact, this is the third great wave of globalization that has risen over the last four centuries, during the era of the modern nation-state. Other waves of increased intersocietal interaction occurred far before that.

But other aspects of globalization are arguably unprecedented. With lower costs and greater volumes, the nature of interaction changes. Today we see not just interaction but interdependence where, for many economies, transborder interactions constitute a more and more important part of the national economy. We see not just trade between societies but transnational production processes, where capital, technology, and components flow across borders, as well as the final goods themselves. Similarly, in the cultural sphere, we see not simply the exchange between different artistic, philosophical, and religious schools - -as we have for centuries – but the emergence of transnational cultural communities, in which the national origin of artists and philosophers becomes far less relevant than their membership in the same cultural community. Increasingly, in fact, the country in which a particular product or service or cultural artifact originated is difficult to determine.

Moreover, it is correct to say that the choice to liberalize or restrict is far more bounded now than it was in previous decades. Some flows – particularly of airborne and waterborne pollutants – do not respect boundaries at all. And other flows – terrorists, viruses, and tainted products – are difficult to restrict. There is an increasingly obvious opportunity cost to countries that fail to open up or those that choose to tighten up. And once the process begins, there are vested interests in societies that want to keep borders open, just as there are those who want to tighten border controls.

Still, although the extent of globalization is unprecedented, and although the possibility of significant and lasting retrogression is low, the process of globalization is by no means complete. Just as it was premature to declare the “end of history” – the elimination of all alternatives to liberal democracy hypothesis was premature -- so may it be misleading to posit the “end of geography,” as those analysts who see the irreversibility and universality of globalization often imply. Not only have some countries chosen to opt out of globalization, or else to severely restrict the process, but more importantly some parts of some societies remain insulated from the rest of the international world economy, often by the lack of infrastructure to connect them to the globalized world, or else by the fact that the cost of connection is more than they can afford.

How does globalization affect public policy?

The process of globalization, produced by these facts and choices, affects public policy in several ways:

First, more and more public policy issues in the U.S. have become transnational in nature, blurring previous distinctions between domestic policy and foreign policy. Although these issues have a direct impact on U.S. society, their origins lie at least in part outside America’s borders. Let me cite a few examples:

  • The availability of high quality, inexpensive imported goods has created a challenge --sometimes an insurmountable challenge – to American manufacturing. Although unemployment and job insecurity have many sources, one is clearly the rise of foreign firms that can compete more effectively for American markets now that the barriers to trade have been reduced. This pattern is complicated by the fact that many of these foreign factories are subsidiaries or branches of American firms, such that they have access to American technology, management, designs, brands, and marketing channels –as well as to the American market. Macroeconomic policy in globalized societies is now inherently transnational.
  • The character of American financial markets is strongly influenced by the availability of capital from abroad. Foreign investors influence the prices of American real estate, the value of American equities, and American interest rates. The recent financial crisis was the result, in large part, of the availability of large volumes of liquidity from abroad. Here, too, financial policy must take international developments into full account.
  • Immigration to the United States – both legal and illegal – is shaped by the political stability and economic vitality of the societies from which the migrants come. Although opportunities in the American economy produce an important “pull” for foreign immigrants, unsettled circumstances in their home countries still constitutes an important “push.”
  • National security in the U.S. was once seen almost entirely as the deterrence of, or defense against, attacks by foreign armies, air forces, or missiles against America and its allies. Now, homeland security represents the defense of the U.S. and its interests against attacks that could well occur on American soil, but are often launched or coordinated from abroad by international terrorist organizations.
  • Increasingly, threats to public health are posed by diseases that come to the U.S. from abroad, whether acute diseases like SARS, avian flu, swine flu, or (potentially) the Ebola virus, or chronic diseases like HIV-AIDS.
  • The concern with energy security represents the acknowledgement that the price and availability of energy in the U.S. – especially oil – is increasingly affected by the decisions of foreign governments or the ability to foreign terrorist groups to disrupt the flow of crude oil by pipeline or tanker.

Most generally, we can say that globalization, because it still involves choice, is itself a transnational policy issue. Although Friedman is probably correct in saying that, in its most fundamental sense, globalization has become a fact for the United States and most other economies, the details of that choice are changeable and thus remain matters of debate. Trade policy, energy policy, investment policy, immigration policy, and energy policy are controversial in the U.S. precisely because globalization itself is controversial: the benefits are uneven, and there are costs in terms of the limitations on sovereignty and the correct sense of vulnerability to external forces beyond our control.

Second, in a globalized world, Americans are becoming increasingly concerned about the ability of their economy to remain competitive – in other words, to sustain the kind of economic activity that can provide higher standards of living for American workers and their families. The need to maintain and increase American competitiveness raises yet another set of policy concerns:

  • The effectiveness of the American educational system to produce skilled workers who can command high wages because they provide high-value-added goods and services
  • Whether the U.S. healthcare system can maintain public health at reasonable cost to employers and workers
  • The adequacy of American infrastructure – both traditional physical infrastructure such as roads, railroads, airports, and seaports, but also newer forms of infrastructure such as telephonic and high-speed data networks.
  • Whether American tax policy – and don’t forget this involves state as well as federal taxes -- places an excessive burden on the American economy relative to societies with lower individual and corporate tax rates
  • Whether American policy in such areas as intellectual property protection and funding for research and development adequately encourages scientific and technological innovation.

Finally, globalization is producing what some analysts have described as the “rise of the rest” – in other words the emergence of a dynamic set of emerging market economies, including most notably the BRICS (Brazil, Russia, India, China, and South Africa). Along with the industrial and post-industrial economies that emerged earlier in Europe and East Asia, these economic and political success stories make it less likely that the United States has a monopoly on “best practice” in economic and social policy. Increasingly, the U.S. will not only be sharing its positive experiences with others, but will be studying the experiences of others in an attempt to provide better solutions to its domestic social and economic problems.

How does globalization affect the U.S. policy making process?

Globalization also affects the policy making process in the U.S. in several ways.

First, transnational problems require transnational solutions. America cannot solve problems of macroeconomic management, malfunctioning capital markets, energy security, climate change, terrorism, and communicable disease by itself. The solutions involve not simply cooperation with other governments, but the creation of international regimes and organizations that can coordinate the efforts of many governments. The need to cooperate with other countries, and the development of international regimes, will limit American autonomy and will require restrictions on American sovereignty. For the United States, no less than for other countries, these restrictions will often be controversial and occasionally be painful.

Second, globalization will encourage foreign entities – foreign governments, MNCs, and NGOs – to try to penetrate the American political process to articulate their interests. The same technologies that facilitate globalization – particularly inexpensive transportation and communication, and information – will make it easier and less expensive for them to do so. Unofficial actors will have ready access to information once available only to the most advanced governments, and will have the resources to press their demands forcefully and articulately. Not only will the American political agenda be increasingly made up of transnational issues, but the American political process will increasingly feature transnational actors articulating transnational interests.

And third, the ways in which transnational issues impinge on the American agenda, foreign interests penetrate the American political system, and Americans increasingly worry about their ability to compete effectively abroad, will challenge America’s sense of identity. Significant numbers of Americans may lose the sense of confidence and optimism about the future that has previously characterized our country’s political culture.

The changing nature of politics – from interest-based to identity-based – may have several consequences. Those whose sense of identity is threatened may search for those responsible, demonizing their opponents both at home and abroad. They may seek simpler, more ideologically based solutions to their declining economic fortunes and self-esteem. And they may even begin to challenge the empirical bases of the policies that threaten their interests and identity. These are the consequences of what David Apter, in his Politics of Modernization, described as the shift from “instrumental” politics to “consummatory” politics. I would posit that some of these trends are already evident in American politics today.


In short, globalization is having significant effects on both the content of public policy issues in the U.S. and on the process by which public policy is made. Of course, globalization is not the only mega-trend that is having such an impact, and we therefore should not exaggerate its importance. Other key trends include:

  • Demographic trends, particularly the changing age and ethnic composition of the population, as well as the different attitude and values across generations, pose both challenges and opportunities for health policy, labor policy, migration policy, social security, and many other issues.
  • Climate change will require changes in the composition of our energy mix, the development of new technologies that can provide cleaner energy and greater energy efficiency. It will also most likely lead to change in policies on housing, transportation, and other sectors of the economy that consume large amounts of energy. It will also, as we have already seen, require complex international negotiations to assign the responsibility and allocate the cost of reducing carbon emissions, and then equally complex domestic negotiations on how to implement the commitments to reduce those emissions.
  • Information and communications technology is already transforming the policymaking process, perhaps most importantly by reducing the role of political middlemen, and thus reducing our ability to aggregate political interests.
  • Other new technologies, particularly biotechnology and nanotechnology, will produce great opportunities for health, agriculture, and other areas of public policy, while also posing significant questions about the ethical choices that these technologies will pose and the social and environmental risks that they may engender.
  • The “rise of the rest” is already producing major changes in the international balance of power – traditionally a major cause of instability in international politics.

Some of these trends – particularly the emergence of new information and communication technologies – constitute some of the “facts” that, as Thomas Friedman has argued, make globalization possible, if not necessary inevitable. But they also act on their own, forming additional independent variables that, along with globalization, are affecting the content of public policy and the contours of the public policy process in today’s world. These, too, will be issues with which the Batten School will be deeply concerned.

The U.S. and China: Still a "Fragile Relationship"?

The following is the text of a lecture I gave to the East Asia Center at the University of Virginia in September, reexamining the question of whether the relationship between China and the United States can best be described as "fragile."

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In 1992, I published a history of US-China relations since the Nixon visit of 1972. The book was fundamentally shaped by the Tiananmen Crisis of 1989 – whose 20th anniversary we will mark a few weeks from today. US-China relations had been significantly undermined by that tragic event – public opinion toward China had turned markedly negative, the U.S. had sharply reduced its level of official contact with China, had ended arms sales and most economic aid, and was debating the revocation of China’s most favored nation status. At the same time, China’s future course was by no means certain. Would the Tiananmen Crisis produce further economic and political reform? Or would it, as I thought at the time, let to a mixture of repression, retrogression, and political decay?

To underscore the uncertainties surrounding both the U.S.-China relationship and China itself, I therefore entitled my book A Fragile Relationship. I did not mean to imply, as some critics have suggested both then and subsequently, that the U.S. should treat China with kid gloves. I simply meant that the relationship was highly unstable, and that there was a non-trivial possibility that it would rupture.

In the seventeen years since the book was published, two things have happened that have led me to reconsider the concept of a “fragile relationship.” First, I’ve been asked on many occasions, both in the U.S. and in China, whether I still believe the relationship to be fragile. For a while, I replied that while it was not so fragile, it remained highly turbulent, as it was through the 1990s. But I did not have the occasion to think systematically about how the relationship had evolved.

The second development was the opportunity to work for almost two years in the area of political risk assessment, which I did after my term as dean of the Elliott School ended in 2005. At Eurasia Group, I learned that the concept of instability is one of the core concepts in the analysis of political risk. I also learned much more about how political forecasters assess instability. And, of course, I realized that my own reference to the “fragility” of the U.S.-China relationship was simply another way of saying that it was unstable.

So today, let me give you my assessment of the degree to which our relationship with China remains unstable. My bottom line is that the relationship is far less fragile than it was in the 1990s, and far less turbulent than it was around the turn of the century. However, it remains highly complex, with areas of both vulnerability and resilience. It would take a large trigger event to produce a crisis, but such a trigger is not inconceivable. Even more worrying, a series of lesser shocks could still weaken the relationship so that it could become less stable over time. And while the crisis management mechanisms – what might be called the “shock-absorbing mechanisms” – are far better now than they were when I wrote my book, they have some shortcomings that provide less than complete confidence about our ability to manage serious problems in the relationship.

Analytical framework

How can we assess the stability or instability of an international relationship? And how does the relationship between the U.S. and China today compare with that in the early 1990s? I will consider four dimensions that I regard as particularly important in determining the levels of vulnerability and resilience in the U.S.-China relationship:

  • The extent to which the two countries are economically interdependent, and the ways in which they evaluate the impact of that interdependence on their economies.
  • The degree to which the two countries regard their other interests as common, competing, or overlapping, and particularly the degree to which any of their vital interests diverge.
  • On this basis, whether the two countries see their overall relationship in positive terms – or, to put it slightly differently – whether the two sides have a common, positive conceptual framework for the relationship.
  • And finally, what I call the Jeff Legro question, after my colleague here at Virginia: Even if each country defines its relationship with the other in essentially positive terms, does that policy enjoy a solid domestic political base or, conversely, are there alternative, less accommodative policies that might challenge it if circumstances change?[1]

These four dimensions determine whether the U.S.-China relationship is still fragile or has become more stable. But there are still two more parts of the analysis. We need to consider whether the two countries have developed structural mechanisms that can anticipate or manage problems in their relationship. And finally, we need to identify the trigger events that might produce either a serious crisis – or a more gradual deterioration – of the U.S.-China relationship.

Stability: vulnerability vs. resilience


Although there was much talk of a mutually beneficial economic relationship as early as the mid 1980s, when China’s program of economic reform and opening was clearly underway, in fact the two countries did not begin to become highly interdependent until around fifteen years later. This interdependence was the product of three things:

  • The surge of incoming FDI that accompanied the gradual relaxation of restrictions on investment in the 1980s and especially the 1990s.
  • The growth in two-way trade, both as a result of that investment (Chinese exports to U.S.) and China’s accession to the WTO (U.S.; exports to China).
  • The accumulation of Chinese foreign exchange assets, much of which was invested in USD assets, and particularly in US treasuries and agency obligations.

A working definition of interdependence is that is a situation in which both sides would suffer significantly if their economic relationship was disrupted, or even if their domestic economies experienced a downturn. This is the reason why interdependence gives greater resilience to a bilateral relationship. And what signs do we see of an interdependent economic relationship

  • The idea that China could be decoupled from the fate of the American economy was proven incorrect by the GFC. When the U.S. economy suffers, the Chinese economy suffers – perhaps not to the same degree, and not across the board, but still significantly.
  • The idea that the trade imbalances between the U.S. and China created a one-sided American dependence on China’s willingness to finance our deficits has also been discredited by recent events. Instead, the two sides increasingly recognize that they are vulnerable to a form of mutually assured financial destruction, where a decline in the value of the US dollar or the value of USD assets, perhaps as a result of a Chinese decision to divest itself of those assets, would also inflict great costs on the Chinese financial system.

Although the Chinese and American economies have become increasingly interdependent over the last seventeen years, this has not necessarily produced an entirely stable situation, because so far we have ignored the question of relative gain. Each side may “win,” but one side may be gaining more than the other. And the irony is that each side in this interdependent relationship believes that the other side is winning more than it is.

How could this be? The U.S. is more focused on balance of trade: on the trade imbalance, which many Americans believe are destroying jobs and lowering wages, and is the result of various forms of unfair trade practices, including an undervalued Chinese currency. The Chinese are more focused on the structure of trade: on the fact that China adds relatively little value to the goods that it exports to the United States – mainly it provides some components and conducts final assembly – while foreign firms gain a larger share of revenue from the more lucrative parts of the supply chain, including profits from product design, branding, advertising, financing, and distribution.

Moreover, each side sees the other as resisting measures to address these problems. Although the Treasury Department has recently refused to cite China as a “currency manipulator” under existing legislation, some in Congress remain dissatisfied at the slow pace of revaluation, and are introducing legislation that will redefine the issue so as to make it easier for aggrieved American firms to seek countervailing duties or anti-dumping remedies against China. Chinese, in turn, believe that one way to capture more of the supply chain and to move up the value-added ladder is through Chinese investment abroad, including investing in, and even acquiring, sophisticated foreign firms – but that the U.S. (as well as other advanced economies) are blocking or restricting such efforts in the name of national security.


One of the biggest changes over the last seventeen years has been the growing ability of China and the U.S. to identify common interests and to manage their differences.

In the early 1990s, the relationship seemed to be devoid of common interests. The need for a strategic alignment against Moscow weakened with the more accommodative foreign policies of Mikhail Gorbachev, and then ended altogether with the Soviet collapse. The idea that China and the U.S. had naturally complementary economies – an idea promoted by Richard Nixon as the next basis for a positive relationship – ran afoul of the disputes over the growing imbalance of trade. And the belief that Beijing’s domestic reform program would soon produce a more democratic China was crushed along with the anti-government protests in Tiananmen Square.

It was painful to see the two sides groping to identify common interests in the early 1990s. I recall a speech by then Secretary of State Warren Christopher in which he tried to argue that the two countries had a common interest in avoiding a weak China, and in managing an emerging set of transnational issues. Neither I, nor the broader Washington audience that he was addressing, was convinced that these could possibly serve as a replacement for the powerful common interests of the 1970s and early 1980s.

But over the subsequent decade between then and now, the two countries seemed to be identifying a wider and more persuasive set of common interests. Over time, the list has included common concerns about the economic prosperity of Asia, capping the North Korean nuclear program, combating the threat of terrorism, addressing the possibility of global pandemics, and now dealing with the global financial crisis and the issue of climate change. Alone, none of these interests may have the weight of the common threat from the Soviet Union. But together, they do make a compelling argument for cooperation.

Moreover, the two countries have found ways of managing some of the issues that created the greatest tensions in the past. On trade, the U.S. and China worked hard to reach an agreement by which China could join the WTO: the agreement involved commitments to significant liberalization, gave China permanent most-favored-nation status, and provided dispute resolution mechanisms through which remaining trade conflicts could be addressed. And while continuing to criticize China’s violations of human rights, the U.S. has essentially stopped threatening economic sanctions against China, and is now placing greater emphasis on assisting China in those areas where it is willing to undertake political reform.

Still, there are at least two areas in which China and the U.S. only have divergent interests, but diverge on issues that involve vital interests – or at least could have vital interests, depending on how the two countries define their interests:

The more specific one is Taiwan. Here, the basic dilemma remains: the U.S. retains a commitment to help Taiwan defend itself in the event of an unprovoked attack by the mainland, presumably one aimed at forcing Taiwan to unify with China. Happily, each side has recently redefined its interests in ways that minimize the degree of divergence. The U.S. has offered renewed assurances that we did not seek an independent Taiwan, and China redefined its red line extremely conservatively as a de jure declaration of independence through constitutional revision. But either side could change that definition. The U.S. might decide that it would not welcome the unification of Taiwan and China, even if it occurred peacefully and with the consent of the Taiwanese people, or even that the economic integration of Taiwan and China was developing to the point that it made us uncomfortable. Or China might once again define its interest not just as deterring independence, but as actively promoting unification, through various kinds of economic, political, and military pressure, and possibly through the imposition of a deadline. That would make the Taiwan issue much more difficult to manage than it is now.

The broader issue is the overall strategic relationship between China and the U.S. We can define it this way: does the U.S. welcome the rise of China, even to the point that it becomes the most powerful single nation in Asia? And does China accept a security role for the United States in Asia, especially with regard to the maintenance of the military bases and the forward deployments that make that role meaningful? So far, we have managed the potentially crucial differences on this subject. The U.S. says that it welcomes the emergence of a more prosperous, stable, and even influential China, as long as it acts as a “responsible stakeholder” in international affairs, meaning that it does not pose an essential challenge to the status quo. This is congruent with a more general definition of our national interest as opposing the emergence, in any region, of a dominant power unfriendly to the United States. But what if we redefined our interests more ambitiously, as preventing the dominance of Asia by any other power, friendly or not? Or, more ambitiously still, as trying to ensure that the U.S. remained the dominant power in the region? And what about China? So far, Beijing says that it welcomes the “constructive role” of the U.S. in maintaining Asian security. But what if China begins to argue that the American network of alliances and bases – which Beijing already describes as remnants of the Cold War – no longer play a “constructive role”? What if it actively tries to minimize the American role in the region, by attempting to push the U.S. out of the regional security balance and to exclude it from a pan-Asian, as opposed to trans-Pacific, economic architecture?

And even in the areas where China and the U.S. have identified common interests, they continue to pursue those interests in different ways. Let me suggest some of the major categories here, citing one example of each:

  • Where interests are overlapping, but not entirely convergent. The North Korean example, where both countries agree on the desirability of eliminating the North’s nuclear program, but where China is far more concerned than the U.S. about preventing the collapse of the North Korean regime.
  • Where the two countries have common interests, but disagree over the allocation of the costs of pursuing them. The best example here is climate change, where again the two countries increasingly agree on the severity of the problem, but differ over the allocation of responsibility -- both for the emergence of the problem and for finding solutions.
  • Where the two countries agree on a problem, but differ on the most effective strategy for addressing it. Both countries agree on the importance of Third World development, but have been promoting development strategies that differ over such key issues as the role of government in the economy, the priority to be assigned to democratization, and the conditionality to be placed on aid. Both countries may agree on the severity of humanitarian problems in failing states, but differ over the conditions under which the international community can engage in humanitarian intervention.

In many cases, in turn, these differences reflect not just differences with regard to interest, cost, and strategy, but differences over underlying norms and values about the organization of both domestic society and the international system.


In addition to identifying the specific interests that promote cooperation or conflict into a relationship, countries may also seek to identify an overarching framework that describes the relationship, and that thereby provides greater coherence to its various elements. (The Chinese are particularly interested in this kind of exercise.)

As noted above, the overarching framework in the 1970s was a tacit alliance against Soviet hegemonism. In the 1980s, it was cooperation in China’s reform and opening. And, as already indicated, both frameworks collapsed in 1989, with the fall of the Berlin Wall and the suppression of the Tiananmen protests.

Just as the two sides had difficulty in defining common interests, so too did they have difficulty in defining a new framework for their relationship. At about the same time that I published A Fragile Relationship, I also published a short article in the Brookings Review, entitled “Neither Friend or Foe: A China Policy for the 1990s.” All I was trying to do was to suggest that if the U.S. and China found it hard to be friends after the Tiananmen Crisis, at least they could avoid becoming enemies. What was so fascinating about the article was how much traction it got in China: Chinese were typically looking for a new framework for the relationship, and they seemed to agree that, at this point, this definition was the best they could hope for.

But by the late 1990s, the two sides began to do better. The U.S. began to speak first of a policy of comprehensive engagement with China to address the complex set of issues on the agenda. Then it put forward the idea of integrating China into regional and global institutions as a way of managing those issues. Most recently, in 2005, it has further declared its desire to see China become a more “responsible stakeholder” in those institutions.

For its part, China tried to forge what it called “strategic partnerships” with other countries, including the United States. This implied that the relationship should focus on what Beijing regards as fundamental long-term issues (that’s the “strategic” element), and should be based on the principle that common interests are more important than differences in interests or values (that’s the “partnership”). In 1997-98, when this concept was presented to the Clinton Administration, it was reluctant to accept that the U.S. and China had already formed such a strategic partnership, but did agree to state that it was its goal to “build toward” such a relationship for the 21st century.

Although the two sides developed and put forward policy frameworks that cast their relationship in relatively positive terms, these frameworks were not entirely identical, and each contained elements that the other side finds questionable.

Although the George W. Bush Administration stopped calling China a “strategic competitor” shortly after taking office in January 2001, it never agreed label Beijing as a “strategic partner,” even a prospective one. Nor has the Obama Administration. To the best of my knowledge, the U.S. has never explained why it finds the Chinese formulation unacceptable, but my hunch is that it implies a more one-sidedly cooperative relationship than the U.S. believes exists, and perhaps therefore suggests constraints on the American ability to criticize China for policies of which it disapproves.

Conversely, the Chinese still chafe somewhat at the American concept of China becoming “integrated into the international community” as a “responsible stakeholder,” since this suggests that China should accept the norms and structures of an international community that it did not help form, and that the U.S. should retain the ability to judge the degree to which Beijing is acting “responsibly.”

In the Obama Administration, the differences have narrowed further. Each government now describes the relationship in the same terms, as “positive, comprehensive, and cooperative relationship for the 21st century,” downplaying the terms (“strategic partnership” and “responsible stakeholder”) that had proven problematic for the other side,

Still, each side’s policy framework contains elements that acknowledge the remaining uncertainties in the relationship. The U.S. talks of hedging against the risks that might be produced by a rising China; China says that this reflects an unwarranted degree of mistrust about its longer-term intentions. China says that alliances are “relics of the Cold War”; the U.S. fears that this reflects an attempt to undermine the American security posture in the Western Pacific.

And underlying all this are large normative differences between the two countries’ overall foreign policies. In many ways, China remains what might be called a “modern” power normatively, committed to Westphalian norms of national sovereignty, the juridical equality of states, and non-intervention in the internal affairs of other countries. The U.S. in contrast, is what might by comparison by called a “post-modern” nation, asserting norms that limit sovereignty, distinguish between “responsible” and “irresponsible” actors, and assert the right to engage in humanitarian intervention in the case of severe threats to human security. So while the words are now the same, the “background music” for each country’s foreign policy remains quite different.

Policy challengers

Another factor that contributes to the stability of the relationship is that the development of these frameworks has reflected a growing consensus in each country about policy toward the other.

In the U.S., the Tiananmen Crisis had produced a very intense debate over policy toward China, reflected in the prominence of the issue in the 1992 presidential election campaign between George H.W. Bush and Bill Clinton, and in the debates between the White House and Congress over China policy under both administrations. Even in the 2000 campaign, George W. Bush declared that he regarded China as a strategic competitor of the U.S., rather than even a prospective strategic partner.

Today, in contrast, the policies of engagement and integration appears to be have gained a stronger basis of political support in the U.S., especially since the Bush Administration slightly hardened that policy by asking China to become a more responsible stakeholder in the international system and by stating that the U.S. would continue to hedge against the possibility that China might not do so. A strong majority of the public appears to support this revised mainstream policy, as reflected in the fact that China policy was a not really an issue in the 2008 presidential election – a minor issue in the primaries, and no issue in the general election itself.

In China, the American response to the Tiananmen Crisis also produced considerable debate. Initially, the dominant Chinese reaction seemed to be that the U.S. was intent on destabilizing China – was posing a near-existential threat to the survival of the Communist regime – but that the end of the Cold War would produce a more multipolar world that would give China greater room to resist American pressure.

Gradually, however, Chinese analysts concluded that the U.S. intentions were not so malign, that Beijing could successfully prevent the U.S. from forging a united front against China on the human rights issue, but that few other countries would join China in an effort to challenge American dominance in the post-Cold War world. Moreover, that consensus also incorporated the idea that China needed a stable, and hopefully cooperative, relationship with the U.S., so that it could continue to concentrate its energies on the economic development that Chinese leaders regarded as key to bolstering political stability and to enhancing China’s role in the world.

Although there does seem to be a broad base of support in each country for a cooperative relationship with the other, there are also areas of potential dissent that are worrying.

First, neither society has a particularly positive view of the other. True, few Americans hold strongly negative views of China, and American assessments of China have improved considerably since 1989, but less than half (now 41%) take a favorable view of China, and the trend toward more positive images seems to have peaked, at least temporarily, in the middle of this decade. The plurality of Americans – 44% -- believes that the rise of Chinese influence is “mainly negative.”

Similarly, Chinese are also evenly divided in their overall assessments of the United States. And they hold a negative view of America’s role in the world – in one recent BBC poll, 58% of Chinese believe that role to be “mainly negative,” although admittedly not as negative as that of some other countries, including some of America’s allies. Perhaps we have stopped idealizing or demonizing the other, but the result is still a set of mixed perceptions that continue to have significant negative elements.

Second, public opinion holds a more cautious view of the relationship than official rhetoric would suggest. A Pew poll from 2008 revealed that only 13% of Chinese regarded the U.S. as “more of a partner,” whereas 34% saw it as “more of an enemy.” American views of the U.S.-China relationship are somewhat more positive: 23% in a recent Harris poll see China as an “unfriendly enemy,” whereas 30% see it as friendly or even a “close ally,” and 40% see it as neither friend nor foe. Far more see each other as competitors, at least in an economic sense, than as collaborators.

Third, and potentially most important, non-trivial minorities in each country favor a tougher policy toward the other. In china, the recent publication of the controversial book China is Unhappy is but the latest in a series of books, beginning with the equally notorious China Can Say No, that call for greater resistance to American demands on China. In the U.S., about a third of the public believe that the U.S. should try to “limit the growth of China’s power,” rather than to “undertake friendly cooperation and engagement.”

Thus, the stage is set, at least conceivably, for a switch, either sudden or gradual, toward a policy framework whose content is much less cooperative and far more competitive, or even confrontational.

Relationship management: mitigation vs. exacerbation

One of the most worrying consequences of the Tiananmen Crisis was the American decision to suspend all official contact above the level of assistant secretary – with the noteworthy exceptions of the Scowcroft-Eagleburger missions to China that, because they seemed to violate the policy against high level conduct, and because one of them was therefore conducted in secret – became highly controversial in the U.S. In fact, the suspension of high-level contact was one reason I regarded the U.S.-China relationship in the early 1990s as being so fragile.

It took a crisis – the missile tests in the Taiwan Strait in 1995-96 – to persuade the two sides to resume high-level dialogue. For a time, the U.S. and China returned to the familiar pattern of “trip-driven diplomacy,” with summit meetings in each country intended to address all the key issues in an increasingly burdened agenda.

Today, in contrast, we have evolved what I regard as a more feasible and sustainable pattern. The pattern still features occasional top-level visits in both directions, but with fewer expectations about their results. Equally important are more frequent, and briefer, meetings on the sidelines of major multilateral conferences (particularly the UN, APEC, and the G-8 or G-20) to engage in consultations without pressure to achieve results – and even more frequent telephone conversations to deal with the most urgent questions.

Also useful has been the inauguration of cabinet and sub-cabinet level discussions of key issues: the Senior Dialogue on political issues dating from 2005, the somewhat better known Strategic Economic Dialogue that began in 2006, and now the combined Strategic and Economic Dialogue that will commence later this year. The main feature of these dialogues is that they provide opportunities for direct communication among a number of functional agencies in both countries responsible for the issues in question – opportunities that may enhance coordination within each country as much as facilitating cooperation between the countries.\

But although there are now robust mechanisms for consultation between civilian officials between the two countries, the same cannot be said for the military sector. True, a hot line has been established, but its effectiveness in the event of crisis remains untested. Even more important, military-to-military dialogue has not yet produced grater transparency about Chinese military capabilities or intentions – and that dialogue remains highly vulnerable to suspension if Beijing is displeased about some aspect of American security policy relevant to China. It does not bode well that a mechanism intended to prevent or manage crises would be suspended at the first sign of a problem in the relationship.


Overall, I believe that the relationship is sufficiently stable that it would take a very powerful shock to be fundamentally disruptive. Three such shocks are conceivable: a military crisis in the Taiwan Strait, a collapse of North Korea in a way that invited external intervention, or a major incident of instability and repression in China comparable to the Tiananmen Crisis of 1989. All of these potential trigger events are what we in the risk assessment business call “long-tails”: high impact, low probability, but not inconceivable.

Over the longer term, however, perhaps the greater danger would be trends that produced greater instability in the relationship. These might include:

  • Inability to reach agreement on issues of high salience to one side or to both.
    New issues on which China and the U.S. come to differ, perhaps because of differences in underlying norms and values.
  • The evolution of the economic relationship in which the relative gains from of interdependence become more controversial in either or both countries.
  • A more assertive and ambitious definition of China’s interests, as its stake in the world economy increases and as its power grows, accompanied by an unwillingness by the U.S. to accommodate such increasing demands. (Already, Beijing seems to be chafing under the terms of tacit bargains – on issues such as the treatment of the Dalai Lama and the legitimacy of American naval patrols inside its exclusive economic zone.)

Developments such as these could produce greater skepticism in each country about the possibility of a cooperative relationship.

Conversely, however, there is also the possibility that the relationship could become even more resilient than it is now:

  • The gradual identification of more common interests and values, and more agreement on effective measures to advance those interests.
  • An ability to find ways of giving China a greater role in the existing international system, with a concomitant willingness by Beijing to take on greater regional and global responsibilities
  • Deeper economic interdependence, with greater acknowledgment of the benefits to each side
  • Greater transparency regarding military strategy and deployments.

These developments could produce greater mutual trust and greater confidence in each country about the prospects for cooperation.


In short, China and the U.S. today enjoy a relationship that is less volatile, less turbulent, and more resilient relationship. It is no longer a fragile relationship. But it is still a complex one, for the two countries have different interests and different values, and are undergoing a significant shift in their relative power. The chances for continuity – as a complex, comprehensive, but ultimately stable relationship -- are high. But there is still the “long-tail risk” of sudden deterioration of the relationship, and a higher chance yet of a more gradual devolution into a more competitive one.

[1] Jeff W. Legro, Rethinking the World: Great Power Strategies and International Order.

Monday, August 17, 2009

China's Quest for Soft Power

What is soft power? It’s easy to say what it is not, since the term was devised to distinguish it from “harder” forms of power, both military and economic. But what is it?

Joseph Nye, who has done more than anyone else to popularize the term, sees it as the power to attract or to induce emulation – the power to make others want to be what you are, or to have what you have. But not all attractive power is soft power (I may want to live in another country because of the economic opportunities I find there, not because I particularly enjoy its lifestyle), and not all soft power evokes emulation (I may appreciate and respect another country’s religion, but not want to adopt it myself).

So I see soft power slightly differently: not as power that induces emulation, but as power that induces respect. It is a wide range of non-material power – ideas, norms, values, cultural products – that enhance the reputation, influence, and legitimacy of the nations that produce them.

Over the last several years, China has placed a high priority on the development of its soft power, and has been seeking to do so in a variety of ways. First, it has been developing the modalities by which soft power is acquired and exerted. These modalities – all of which have been utilized by other countries trying to enhance their soft power -- include:

  • Symbolic actions intended to reflect China’s economic and military successes (manned space flights, hosting the Olympic Games, building the world’s tallest skyscraper, naval port calls some distance from China’s shores, etc.)
  • Global media (including CCTV-9, China’s English-language satellite news channel, and the English-language editions of China Daily and Caijing)
  • Cultural diplomacy (such as sending performing arts troupes and art exhibitions abroad)
  • Educational exchanges, both in China and overseas (e.g., the establishment of Confucius Institutes to offer Chinese language courses abroad, the creation of English-language graduate programs in Chinese universities, and the development of financial aid programs for foreign students who wish to study in China)
  • Diplomatic activities (including China’s role in creating the Shanghai Cooperation Organization, the Boao Forum, and the Six-Party Talks on the denuclearization of North Korea)

Why has China been putting so much effort into the development of its soft power? The most general answer is that Beijing has been trying to develop its “comprehensive national power,” and sees soft power as part of that package.

Even more important, soft power, in Chinese eyes, can legitimize the harder forms of power, and thus reassures others that the rise of China does not have to be contained or balanced. At the same time, as I have already argued in “The Hard Edge to Soft Power” elsewhere on this blog), Beijing understands that some kinds of soft power can delegitimize other countries’ power, either hard or soft.

China’s desire to legitimize its own power and to delegitimize the power of others helps us understand the content of China’s soft power diplomacy. Although Beijing, like other governments, conducts some programs that are intended to introduce foreigners to the attractive features of Chinese language and culture, it places particular emphasis on developing and promulgating the norms that Beijing says should govern international conduct and national development strategies. These norms are particularly important to China because they are seen as the most important means for legitimizing the development and exercise of China’s hard power, and for delegitimizing the international behavior of others.

The norms that Beijing has been formulating can be placed into three clusters, two involving international behavior, and one governing domestic development models.

The first cluster is the most traditional: the “five principles of peaceful coexistence.” These can be traced to the early years of the Soviet Union, but were more fully developed by China in the early 1950s. They include:

  • Mutual respect for each other's territorial integrity and sovereignty
  • Mutual non-aggression
  • Mutual non-interference in each other's internal affairs
  • Equality and mutual benefit
  • Peaceful co-existence

A second cluster, more recent in origin, is largely an updated version of the first. It is organized around the concept of a “harmonious world,” associated with Chinese President Hu Jintao. Interestingly, however, while that phrase has been chosen for its roots in Chinese philosophy, its more specific components are largely Western in origin:

  • Cooperative security (or what the Chinese call a “new security concept”)
  • Unconditional foreign aid
  • Limited sanctions
  • Mutual accommodation
  • International democracy
  • Cultural diversity

The differences in terminology between the first and second clusters underscore a point I made in my earlier blog. Unlike the traditional concept of soft power, where countries seek influence by persuading others to emulate their unique features (“don’t you want to be like me?”), the current Chinese conception of soft power seeks legitimation for Beijing’s behavior by persuading other major powers that, to a large degree, China is emulating them (“I want to be like you”).

The third cluster involves the model of economic and political development associated with China – what some call the “Beijing Consensus,” but what most Chinese analysts simply call the “Chinese model.” More specifically, this cluster includes the following:

  • Privatization and marketization, but under state guidance
  • Experimentation and gradualism
  • Export-led growth, with restrictions on imports
  • A consultative, but non-pluralistic, political system

These three clusters – especially the second and third -- are both familiar and different. They are familiar because they use largely Western terminology and summarize a strategy of development (export-oriented growth through developmental authoritarianism) that has been used elsewhere in Asia. But the differences between these Chinese norms and the comparable American norms enable Beijing to use them to distinguish China from the West and to delegitimize American foreign policy when it wishes to do so.

How well is China doing in its efforts to build its soft power? Over the past several years, there has been considerable interest in – and even concern about – the rise of Chinese soft power. This was largely because China’s attempts to develop soft power were coming at the same time that the U.S. was hemorrhaging soft power, particularly through its strategies in Iraq and in the global war on terror.

Today, that hemorrhaging has stopped, and we are simultaneously more aware of the limits to the growth of Chinese soft power:

  • The sustainability of China’s development model remains in doubt, thus raising questions about its attractiveness.
  • China’s domestic behavior, particularly with regard to dissidents, human rights activists, and ethnic minorities, calls both its domestic norms and its commitment to international norms into question.
  • China’s norms, particularly its continuing emphasis on sovereignty and non-intervention and its relative neglect of human rights concerns abroad, strike many as dated, insensitive to the poor and disenfranchised, and overly protective of oppressive governments. Much of Beijing’s normative framework will be more attractive to elites in authoritarian countries in the Third World than to other constituencies.
  • China’s behavior, particularly in its aid policies and its foreign investments, often departs from its articulated norms. This is particularly true in Latin America and Africa, where China has been making investments in resource and energy extraction in ways that raise allegations of maltreatment of local workers, or trying to export manufactured goods in ways that compete with local firms.
  • So far, China has shown little willingness to sacrifice to uphold these international norms. This has given China the reputation of being a free rider in international affairs.
  • China’s response to criticism has often been angry and defensive, evincing a level of insecurity that is not compatible with a high degree of soft power.

In short, China has been making impressive efforts to develop soft power, with attention to both the messages it wants to convey and the media through which it will convey them. But the effectiveness of those efforts is far from assured. And, even if China’s soft power continues to increase the relative balance of influence – how China’s soft power resources stack up relative to those of other countries – will depend as much on those other countries’ attractiveness as on China’s.

Saturday, July 4, 2009

Change and Continuity in the Obama Administration's Foreign Policy

This is a slightly revised version of another talk I gave to the Asia Society's Hong Kong Center in late May, shortly before ending my five-month stay at the University of Hong Kong and returning to the U.S. to take up my new position at the University of Virginia

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Over its first six months since the inauguration, the foreign policy of the Obama Administration has been characterized by a complex blend of continuity and change. Because Obama ran on a platform of change – and in part because there really are significant ways in which his foreign policy differs from that of the Bush Administration that preceded him -- I’ll focus on the elements of change, categorizing them as the “six R’s”: repudiation, restoration, reprioritization, resetting, reorganizing, and revitalizing. But I will follow that with a discussion of the continuities between past and present, and the uncertainties that remain in the new administration’s approach to foreign affairs


1. The Obama Administration has repudiated those aspects of the Bush Administration’s foreign policy that Obama believed to be unacceptable departures from American norms and traditions. These include his decisions to close the Guantanamo Bay detention center, to end the use of “enhanced interrogation” techniques such as “waterboarding,” and to employ military tribunals to decide the fate of the “enemy combatants” housed there. However, here a surprising degree of continuity is apparent: the Obama Administration has decided to continue the use of warrantless wiretaps to monitor transborder communications with those regarded as possible terrorists, and is having considerable difficulty in deciding where to place (and whether to try) some of the detainees presently held in Guantanamo.

2. The Obama Administration says it will restore what the Obama Administration regards as the traditional American emphasis on consultation with allies, a pragmatic approach to problems, respect for international law, and the use of established multilateral organizations – all to replace what it has claimed was an excessively unilateral and ideological approach by the Bush Administration. But from the very beginning of the administration – specifically, Vice President Biden’s speech at the Munich Security Conference – the Obama Administration has also set out exceptions to its renewed emphasis on international law and institutions, saying that the U.S. would work through international institutions when they are “credible and effective." He also echoed earlier administrations in saying that, while the U.S. would work together with friends and allies whenever it can, it will act alone “when we must,” and that it will expect its allies to do more in support of American initiatives, especially in Afghanistan.

3. In perhaps the biggest change to date, the Obama Administration has reprioritized America’s foreign policy agenda so as to place greater emphasis on neglected regions and issues. Geographically, this includes a shift of regional focus from Iraq to Afghanistan and Pakistan, renewed attention to Southeast Asia (particularly Indonesia) and the Middle East, and greater attention to the deteriorating domestic situation in Mexico. Functionally, there is a new emphasis on certain transnational issues, including not only the immediate problem of the global financial crisis, but also the longer-range issues of nuclear arms control, economic development, and (above all) climate change. This is paralleled by declining emphasis on terrorism (including a decision to stop using the term “global war on terror”) and, less expectedly, lower priority to the promotion of democracy as compared to economic and political development more generally. These new priorities are evident, too, in particular bilateral relationships – especially that with China, where managing the financial crisis and addressing the problem of climate change have supplanted the earlier emphases on trade and human rights.

4. Drawing a metaphor from computing, the new administration has spoke of “resetting” difficult relations with both rogue states and potential strategic competitors. This is reflected in its expressed willingness for engage in direct dialogue with, or at least new approaches to, countries such as Burma, Cuba, Iran, North Korea, Russia, and Venezuela. In some cases, like Burma and Cuba, this has also been accompanied by an acknowledgement that past policies have failed to achieve the desired result – although not yet by a clear definition of any alternative. In other cases, it is accompanied by a redefinition of American priorities, such as a renewed attention to strategic arms control negotiations with Russia, and somewhat less attention to the Russian invasion of Georgia. In what are perhaps the most immediately important cases, such as Iran and North Korea, the computer metaphor is particularly appropriate, since the Obama Administration seems to be trying to restart negotiations without changing the objectives, or even the incentives, that were embodied in the original program that guided those negotiations. In these areas, the change in tone is accompanied by continuities in both goals and strategies.

5. The Obama Administration is reorganizing the State Department to provide somewhat greater bandwidth to deal with the daunting agenda of international issues. The most widely reported of these organizational reforms has been the appointment of special envoys to deal with particular problems that can place huge demands on the time of regular officials, such as George Mitchell to oversee Israel-Arab relations, Richard Holbrooke to deal with Afghanistan and Pakistan, Steven Bosworth to manage the Six-Party Talks on North Korea, Scott Gration to address problems in Sudan, and Todd Stern to handle negotiations over climate change. The combination of previously separate economic and security dialogues with China into a single broader dialogue, co-chaired on the U.S. side by the Secretaries of State and Treasury, might also be mentioned here.

6. Finally, the new administration has committed itself to revitalizing the instruments of American foreign policy, under the rubric of enhancing the country’s “smart power.” This means more attention to public diplomacy and foreign aid, but also more focus on rebuilding American economic competitiveness through investment in infrastructure and education and through reform of the U.S. health care system. It also appears to mean a restructuring of the U.S. military to focus on non-conventional wars rather than on the problem of balancing potential peer competitors.


If these are the six major changes in American foreign policy under the Obama Administration, what are the continuities?
  • As noted above, there appears to be no change in some key American objectives in troubled relationships, including the desire to eliminate the Iranian and North Korean nuclear weapons programs, and to promote political reform in North Korea, Burma, Cuba, Venezuela and elsewhere.
  • Although the priority assigned to counterterrorism may have been reduced, and he attention paid to economic development increased, the other tactics used in that effort have not been fundamentally changed
  • There is no movement toward a rapid withdrawal from either Iraq or Afghanistan. Indeed, the administration’s aim is to increase NATO troop levels in Afghanistan, including the level of American forces if necessary.
  • Although there may be a reassessment of the relative importance of transnational issues, the list of items on that agenda remains more or less unchanged.
  • Above all, there is considerable continuity in overall American strategy toward major powers such as China, India, and Russia, despite some change – as noted above – in the specific issues that the administration wishes to advance.


Beyond this list of changes and continuities in the Obama Administration’s foreign policy, there are also some significant uncertainties, both with regard to American policy toward specific issues and regions and, equally important, whether those policies will prove effective.

1. How far will the administration depart from free trade principles both in handling the global financial crisis and then, over the longer term, in negotiating free trade agreements with American economic partners?

2. Will “pushing the reset button” really improve U.S. relations with countries such as Iran and North Korea, unless there is also a redefinition of underlying goals and incentives in ways that make them more persuasive? Indeed, will the more accommodative tone taken by the Obama Administration encourage rogue states such as North Korea and Iran to be more recalcitrant rather than more cooperative, as presently appears to be the case?

3. What will be the domestic reaction to the Obama Administration’s reduced emphasis on promoting human rights in countries like China and Iran? Already, it has come under sharp criticism from the human rights community for this change in tone, particularly after the disputed presidential elections in Iran.

4. How will the U.S. military balance the needs to balance against rising conventional and nuclear powers and to develop the capability to engage in non-conventional conflict? This appears to be one of the most important unresolved foreign policy issues for the new administration, made particularly difficult by the sharp increased in the federal budget deficit.

5. Which are the international organizations on which the U.S. now says it wants to rely? What reforms are envisioned for the UN, the World Bank, and the IMF? In Asia, where there is a growing interest in multilateral institutions but many competing regional organizations vying for support, will Washington decide to continue to support APEC or shift its attention to the East Asian Summit? Will Washington send its top leaders to the ASEAN Regional Forum or the Shangri-la Dialogue? Will it continue to focus on one of these two region-wide security organizations, or place greater emphasis on sub-regional organizations like the Six-Party Talks?

6. Will Congress provide the authorization or appropriations necessary for the administration to implement its policies? This is a particularly obvious problem with regard to any proposed increases in ODA and to the administration’s future military budgets. But, as the recent negative Senate vote on the relocation of detainees from Guantanamo indicated, the White House may face problems in mustering sufficient Congressional support on other issues as well.

7. And, of course, how effective will be the attempts of the Obama Administration to revitalize the U.S. economy and rebuilding its soft power?

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In short, the Obama Administration’s approach to foreign policy involves a blend of change and continuity. On balance, however, the degree of continuity is noteworthy – and comes a surprise (and sometimes a disappointment) who expected more change, and a vindication to those who predicted that much of the Bush Administration’s foreign policy was be proven to be both necessary and effective. The greatest uncertainty is whether any of those policies – those that embody change or those that reflect continuity – will be effective unless and until the U.S. can revitalize its economy and rebuild its legitimacy abroad.

Thursday, April 23, 2009

Thirty Years of Political Reform in China

A few weeks ago I participated in a panel discussion, organized by the Asia Society in Hong Kong, marking the thirtieth anniversary of China’s program of “reform and opening.” Fred Hu of Goldman Sachs spoke about the evolution of China’s foreign economic policies; I spoke about the course of political reform.

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The five most common generalizations one hears about the course of political reform in China over the past thirty years – at least the ones you hear in the United States – go something like the following:
  • Political reform has lagged behind economic reform.
  • Many promising political reforms have been rolled back, so China is actually less open and democratic today that it was in previous years.
  • China’s political system remains authoritarian (and here some would even say totalitarian).
  • China is therefore vulnerable to political upheaval in the event of a crisis.
  • And because of China’s authoritarian system, U.S.-China relations will also be vulnerable to the human rights issue.

Like most conventional wisdom, these five generalizations are not entirely wrong. But each of them needs to be modified if we are to gain a balanced assessment of the changes in China’s political structure over the thirty years of reform and opening.

1. Political reform has lagged behind economic reform

It is hard to compare the extent of economic reform with the extent of political reform, since they are such different phenomena. But, relative to the ideal types that are most commonly mentioned, it is probably true to say that China has moved farther toward becoming a privatized, marketized, globalized economy than it has moved toward becoming a liberal, pluralistic, democratic political system.

Still, each of these two comparisons should be qualified. First, however extensive it has been, China’s economic reform program has also encountered its limits. The hand of the state remains strong, both as an owner of enterprises and as a regulator of the market. There are still significant restrictions on capital flows in and out of China, and on the ability of foreign firms to participate in strategic sectors of the economy. Small and medium-sized enterprises find it difficult to get access to investment capital, largely because land is publicly owned and cannot be used as collateral for bank loans. Moreover, the global financial crisis has led to some retrogression in some areas, particularly ownership structure (toward more state ownership), the financial system (toward more non-performing loans), and market access (toward greater protection of domestic industry).

Second, despite the limits to political reform, to be discussed later below, there has also been substantial change in the nature of the Chinese politics over the past thirty years. Compared with 1978, when reform began, the Chinese political system is now characterized by:

  • More pragmatic and technocratic administration
  • Relatively institutionalized systems of political succession
  • A far freer society
  • A more extensive and effective legal system
  • A narrower political spectrum, in which most political debate is over the details of policy rather than the overall course of reform
  • Greater consultation with affected interests on specific issues

These changes make the Chinese political system very different than it was in 1978 – certainly more pragmatic and liberal, even if neither pluralistic nor democratic.

2. Many promising reforms have been rolled back

In considering this second proposition, we have to begin by distinguishing between cyclical change and secular change. China is still characterized, as it has been since 1949, by a cyclical pattern of tightening and loosening of political controls: a loosening when the regime feels more confident of public support, and a tightening when it is less so. That tightening is particularly evident with regard to freedom of political organization and expression, but in its extreme form it can take the form of curfews and travel restrictions in order to reduce the possibility of political protest. We have recently seen examples of the latter in the run-ups to the 2008 Beijing Olympics and to the fiftieth anniversary of the Tibetan uprising.

The even larger question is the extent of secular change. Has there actually been a permanent rolling back of any of the reforms summarized above? I would argue that there has not – with one important exception that is particularly sensitive in the United States. There appears to be far less enthusiasm about local elections in China now than there was in the past – and certainly less enthusiasm about extending direct elections beyond the village to higher levels of the political system. The Party’s principal rationale for village elections was to impose greater accountability on local officials from below than could be exerted administratively from above. It did not reflect any philosophical commitment to this particular mechanism as the best means of doing so. The apparent ease with which village leaders can evade that accountability through vote buying and other forms of corruption has significantly eroded support for local elections within the Party’s leadership.

In the end, however, the most important problem facing political reformers in China is not the degree of retrogression, but the lack of forward movement. Recent months have seen the imposition – or, more accurately, the restatement – of the limits on further change in political structure. Top Chinese leaders have explicitly identified, and rejected, all of the key features of pluralistic democracy, including independent political parties competing for power, an independent judiciary, or a fully independent legislature. They have also reiterated the Chinese Communist Party’s monopoly over political leadership. None of these limits is new, but their recent reiteration suggests that we should not expect further qualitative changes in China’s political structure any time soon.

3. China therefore remains an authoritarian, or even totalitarian, system

Also some continue to describe it as such, by any reasonable definition of the term China can no longer be considered to be a totalitarian political system, although it was during most of the Maoist period. It does not have any of the organizational characteristics of such a system: a charismatic leader, a powerful ideology, or an effective network of media and mass organizations that can mobilize all members of society in support of the Party’s goals and policies. Even more important, the variety range of opinion and activity in society is evidence that the Party clearly does not exercise total control over either thought or action.

China is, however, an authoritarian system – but the question is, what kind of authoritarian system is it? Here, Western political typologies fail us. They define ideal types – such as democratic and totalitarian systems -- reasonably clearly. But they do not provide much analytical insight or clarity into that far larger set of political systems that fall into neither of those two extreme categories. Authoritarian systems vary considerably one from another, but comparative politics does not offer a commonly accepted set of dimensions along which they do.

Still, let me suggest two dimensions that are particularly important in assessing the state of Chinese politics after thirty years of reform. First, China today is what some call a “soft,” or consultative form of authoritarian system – as opposed to a “harder,” more directive form. China has created several mechanisms by which society can express opinions – through the press, public opinion polls, government consultative procedures, the “blogosphere,” and increasingly through protest (even though leading protest activities can still be risky). The Party is more skeptical about some of these mechanisms (the blogosphere and protest) and more enthusiastic about others (public opinion polls, investigative reporting, and formal consultative mechanisms). But their existence means that China is a far less closed and rigid authoritarian system than it was in the 1980s, let alone in the 1960s and 70s.

Another dimension along which authoritarian systems vary is their coherence. Here, Chinese politics is characterized by a high degree of fragmentation, both vertically between central and local governments and horizontally among different bureaucratic agencies. Indeed, many China specialists use the label “fragmented authoritarianism” to describe the country’s political structure. In addition, China’s administrative system is plagued by increasing corruption as officials seek financial benefits through bribes (accepting payment in exchange for favorable decisions) and graft (acquiring state assets for personal gain). Together, fragmentation and corruption mean that the central authorities can have only limited confidence that their decisions will be faithfully implemented, or that their subordinates will enjoy legitimacy in the eyes of ordinary citizens.

4. China is vulnerable to political upheaval in the event of crisis

True, China is vulnerable to political upheaval – but the study of political risk tells us that all political systems are vulnerable in the event of crisis. The only question is the size of the shock that would be needed to trigger that instability.

And, in fact, despite its authoritarian character, and despite the fact that its political institutions are both fragmented and corrupt, China appears to be relatively stable – or at least far more stable than was anticipated by analysts who predicted, after the Tiananmen Crisis of 1989, that the country was on the verge either of democratization or collapse. Indeed, some foreign analysts are now saying that China’s political future is more likely to feature “resilient authoritarianism” than either upheaval or democracy.

There are several factors that seem to be making the Chinese political system so resilient:

  • Mechanisms for the expression of grievance, as noted above
  • Increasingly effective procedures protests – some accommodative, others repressive -- for responding to them
  • Relatively high levels of popular legitimacy, rooted largely in thirty years of sustained economic growth and growing personal freedom, and bolstered by widespread popular nationalism
  • A middle class that has been co-opted into the existing political system, and is wary of the consequences of either democratization or “chaos”
  • A leadership that has been able to maintain the appearance – and probably the reality – of relative unity

The resilience of the system has been demonstrated by its ability to ride out a number of rather serious shocks, including a stock market collapse (which predated the global financial crisis), outbreaks of communicable disease (especially SARS), the Tibetan riots, the Sichuan earthquake, the current economic downturn, and especially the melamine and other product safety scandals. These were all national (or at least regional) issues – not simply local problems that could be blamed on local officials. And yet none of them has posed a serious challenge to the stability of the Chinese political system.

It seems, then, that it would take either a more powerful shock, or else the gradual erosion of the regime’s resilience, to create the conditions by which China could experience a severe political crisis. A big shock cannot be precluded, but seems unlikely at the moment. The bigger danger is a gradual decline in the legitimacy of the political system if it is unable to manage China’s long list of social and economic contradictions effectively, especially if that decline is accompanied by growing differences of opinion among Chinese leaders over the desirability of further political reform.

5. U.S.-China relations will also be vulnerable to the human rights issue

A political crisis in China would once again produce a big shock to U.S.-China relations, just as the Tiananmen Crisis shook the relationship to its foundations in 1989. And the authoritarian character of Chinese politics does contribute to the mistrust that many Americans feel toward China, and their concern about the consequences of China’s rising power.

Even so, the human rights issue has been pushed to the side, as other issues in the relationship – the financial crisis, climate change, the North Korean nuclear program, energy security, and the like -- have come to the fore. To be sure, there will be relatively mild criticism of China by the U.S. government, particularly in the annual State Department human rights report, and far sharper criticism of China by non-governmental human rights organizations. Particular developments – especially involving Tibet, individual dissidents, and religious organizations, each of which has supporters in the U.S. – may inflame the issue from time to time. But while the human rights issue will remain an irritant in the U.S.-China relationship, it is unlikely to cause a crisis – unless the human rights issue in China itself reaches crisis proportions.

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In short, much of the conventional wisdom about China’s record political reform over the last thirty years is correct. There have been limits to political reform, the system therefore remains authoritarian, it is vulnerable to shock, and U.S.-China relations will not be immune from a serious political crisis in China. But these same generalizations have to be modified to be more fully accurate: there has been considerable political reform, China is a relatively soft and resilient authoritarian system, and it will take a very large shock – or protracted political decay – to destabilize either the U.S.-China relationship or China itself

Saturday, April 18, 2009

The Hard Edge to Soft Power

It’s increasingly clear that Chinese are interested in developing their soft power, as well as their military and economic power. Is this something that Americans should be concerned about? Is the development of another country’s soft power entirely benign, or can it legitimately be of concern to others?

Some forms of soft power are non-threatening. These include the attractiveness of a country’s culture, the beauty of its landscape, the appeal of its educational system, even the skill of its diplomatic corps. To be sure, there may be a degree of competitiveness here, in the sense that all these forms of soft power may enable a country to develop more vital hubs of cultural, tourist, intellectual, and diplomatic activity than other countries enjoy. But the overall effect is positive: everyone benefits from the emergence of these new centers of soft power.

But two other types of soft power may be somewhat less benign. They are the use of soft power to explicitly legitimize the development of one’s own harder forms of power; and then the use of soft power to delegitimize another country’s power, whether hard or soft. Both of these, especially the second, may make the acquisition of soft power a much more competitive undertaking. And while China is clearly trying – with some degree of success – to develop the benign forms of soft power, it is also attempting to create these two other forms of soft power as well.

Legitimizing Chinese power

One key purpose of soft power is to legitimize the development and deployment of harder forms of power, both military and economic. Since hard power can appear threatening, soft power can be used to reassure others about the intentions that harder power will ultimately serve.

Chinese became interested in this issue when they grappled with what initially appeared to them to be a puzzle. After the collapse of the former Soviet Union, when the United States became the world’s sole superpower, why did not the rest of the world come together to counterbalance it? Chinese analysts considered two possible explanations for this. One was that the world was truly unipolar – that the US was so powerful that the only possible response was to bandwagon, not counterbalance. But the other, seemingly more plausible to Chinese analysts who see an irreversible trend toward multipolarity, was that the US was not seen as sufficiently threatening to warrant counterbalancing. And they concluded that the main reason why American predominance was not widely regarded as threatening was that America’s hard power was legitimized by its soft power.

This conclusion became even more relevant to Beijing when the rise of Chinese economic and military power toward the end of the 1990s began to produce concerns about China’s own intentions, and to give rise to the so-called “China Threat” theory. To counter that theory, Chinese analysts realized, Beijing would have to find ways of doing what the U.S. had done so well: to use soft power to legitimize its acquisition of hard power.

Beijing could have tried to do this by putting forward an idiosyncratic set of goals and values to justify the rise of Chinese power. For example, it could have reasserted some of the ideological values rooted in the Marxist-Leninist tradition. Or it could have presented a set of cultural values drawn from Chinese civilization. And, indeed, Beijing has used both these approaches, but to a remarkably limited degree. It continues to talk about a “new international economic order,” much as it did in the 1970s; and it has started to talk about creating a “harmonious world,” using a term that has much deeper resonance in Chinese traditional rhetoric than in contemporary international parlance.

But China’s main strategy has been to invoke universal international values – not specifically Marxist-Leninist or Chinese values -- to justify its rise. In so doing, China has been exercising soft power in an unusual way. It has not taken the approach described so well by Joseph Nye: persuading others to be like China. Instead, it has taken just the opposite tack: trying to persuade others that China wants to be just like them. In other words, China has been reassuring the rest of the world it has accepted international norms and values, and therefore its rise will not be a threat to the international community that upholds those values.

But of course, in invoking those international norms, China has done so selectively, stressing those with which it felt most comfortable and, as we will see in the next section, sometimes using them to subtly delegitimize the exercise of power by the United States. This list of selected universal norms and values is a long one, but they can be summarized by grouping them into five broader categories: goals, values, transactional norms, institutional norms, and policy norms.

  • Goals: Chinese leaders speak of a variety of goals that they say China shares with other nations. Two frequently used formulations are “peace, prosperity, and partnership” for the international system as a whole, and “stability, development, and human rights” for the individual countries within it. These two formulations build on the earlier statement, associated with Deng Xiaoping, that the world is in an era of “peace and development” – a statement that, in turn, was a tacit repudiation of the Maoist formula of a world characterized by “war and revolution.”
    The Maoist formula was a good example of the presentation of an idiosyncratic set of goals that, in the end, appealed to only a relatively small number of people and to even fewer governments. By emphasizing the more universally held values of “peace and development,” in contrast, Deng's formula has been more reassuring form of soft power. The subsequent addition of values such as “prosperity,” “stability,” and “human rights” only enhances its appeal.
  • Values: Here, China has also invoked universal values, but more selectively. It has championed the Westphalian values of national sovereignty and territorial integrity, together with the more recent value of cultural diversity. These lead China to oppose intervention by stronger powers in the internal affairs of the weak, oppose unwanted regulation of sovereign states by international institutions, and defend each government’s right to define its own path of development free of foreign pressure. To be sure, Beijing China no longer absolutizes these values, and is even willing to support economic sanctions and humanitarian intervention in certain circumstances. But in general China holds to what I call the “conservative” (or “modern”) values in international affairs, whereas the U.S. upholds what might be called more “liberal” (or “post-modern”) values – values that permit intervention and sanctions in the name of the protection human security and the promotion of human rights.
  • Transactional norms: By transactional norms, I mean the norms that govern the interactions among states. Here, China has made a somewhat more original contribution – indeed, a contribution that some say will form the basis of a new Chinese theory of international relations – by saying that it stands for “partnerships” that are characterized by norms such as mutual understanding, trust, consensus, and cooperation. These are universal values, to be sure, but they have previously been applied more to domestic social relations than to the international relations among states. China also continues to uphold the related elements of the “five principles of peaceful coexistence,” including equality and mutual benefit.
  • Institutional norms: Similarly, in its discussion of international organizations, Beijing favors those that follow the norm of universal (rather than selective) membership and that operate on the basis of consensus (rather than majority rule or minority dominance). In so doing, it claims two be upholding the principle of democratic governance of international affairs, and opposing any country’s claims to hegemony or dominance.
  • Policy norms: China also has codified a set of norms that underlie specific foreign policies and development programs: For example, China says its foreign policy is organized around “defensive defense,” ”cooperative security,” “win-win” economic relationships, and unconditional foreign aid. And Beijing’s development policy advocates experimentalism, gradualism, and varied solutions to fit the particular circumstances of each developing country, all undertaken by a strong, authoritarian, pro-development state.

Delegitimizing American power

At the same time that Beijing is trying to use soft power to legitimize its growing role in the world, there are also some signs that it is simultaneously attempting, at least to a degree, to delegitimize American power and policy. It is doing so by suggesting the ways in which its selection of universal goals, values, and norms stand in contrast to America’s, and the ways in which American foreign and development policies violate the norms and values that China espouses.

Let’s proceed through the same five categories outlined above, to see how Beijing uses them to criticize the United States, and thereby attempts to delegitimize the American role in the world:

  • Goals: Here, the differences between China and the U.S. are centered more on the goals that Beijing asserts for individual countries than on its goals for the international system. On the latter, China does not imply that the U.S. does not join China in favoring international peace and prosperity as ultimate objectives. But on the former, China asserts far more differences with the U.S. By setting out China’s three goals – stability, development, and human rights -- Chinese analysts say that the U.S. is focused only on one (human rights), and even there is focused primarily on political and civil rights, rather than on the economic and social rights that have equal standing under international law. Beijing does not accept the charge that China is not as committed to human rights as is the U.S. Instead, it says that the U.S. ignores the developing world’s equal interest in stability and development, especially for poorer states, and is willing to sacrifice them in a quixotic attempt to promote democracy and pluralism in countries that are not yet “ready” to achieve them.
  • Values: Here, the differences are far starker, although not absolute. As noted above, China can be seen as upholding “conservative” values in international affairs, which Beijing then contrasts with the “liberal” values (and I stress this is my term, not Beijing’s) promoted by the United States: the right of the U.S., either unilaterally, in concert with its allies, or with the backing of international organizations, to interfere in other countries’ internal affairs to impose Western policies, institutions, and values. Increasingly, too, Beijing accuses the U.S. of a cultural bias – of a “West-centric discourse” that denies the acceptability of anything other than Western policies, institutions, or values in evaluating the domestic and foreign policies of other countries.
  • Transactional norms: As noted above, China advocates transactional norms that embody the ideal of cooperative relationships among trusting partners. Beijing accuses the United States of frequently violating those norms. It claims that America’s relationship with China, like its relationships with other countries it regards as potential threats, is characterized by mistrust and misunderstanding. China also says that the U.S. deals with other countries through sanctions and pressure, rather than in a cooperative and consensual sprit; and conducts its relations with other countries in a hierarchical or hegemonic way, rather than forming equal partnerships of the sort that Beijing claims to favor.
  • Institutional norms: China reserves some of its most pointed criticism of the United States for violating its favored institutional norms: universal membership organizations that operate on the basis of consensus. It has criticized US alliances, especially in Asia, and US proposals for the creation of a league of democracies, as “dividing the world” on the basis of “ideological thinking” and a “cold war mentality.” In other words, these are allegedly institutional reflections of a American mindset that demands allegiance to “Western values,” mistrusts and misunderstands countries that do not unequivocally accept those values, and creates hierarchical and exclusive relationships centered on the US rather than more equal and inclusive “partnerships.”
  • Policy norms: Finally, many of China’s policy norms can be seen as criticisms, direct or indirect, of American policies. For example, “defensive defense” is a criticism of the US policies of preemptive and preventive war. Similarly, China contrasts its “no-strings-attached” approach to ODA with the conditionality associated with the United States and the Washington-based international financial institutions, and contrasts the gradualistic and experimental strategy of development with the orthodox neo-liberal approach it attributes to the “Washington Consensus.”


My point here is not to suggest that China’s normative arguments are correct or unanswerable. Rather, it is to assert that China is using normative arguments to legitimate its rising military and economic power, so as to reduce the chances that China’s rise will be seen as a threat that requires other countries to counterbalance it. It is also to suggest that China is using those same normative arguments to delegitimize some aspects of American foreign and defense policy.

The main implication is that the U.S. will have develop effective counterarguments (or, in some cases, to modify its policies) if it is to maintain the international legitimacy that is such an important part of its overall national power. Many American analysts focus on the rise of the harder forms of Chinese power, or the more benign forms of soft power. They may not be paying adequate attention to the ways in which that soft power can possess a harder edge.