I
was forced to suspend this blog when I suffered a serious stroke about fourteen
months ago. Now that I have recovered enough to start writing again, I’m
looking forward to resume sharing my thoughts about China, Asia, Sino-American
relations, and US relations with Asia in the months ahead.
I
plan to begin with comments on the leadership transitions that are about to
occur in China and the United States and their likely impact on the U.S.-China
relationship. I’ll start with China, and
write about the U.S. presidential election in my next posting.
A
few weeks back, I was asked to participate in a discussion organized around the
question of whether China’s new leadership will present an “opportunity for the
United States.” My schedule didn’t
permit me to accept that invitation, but I did reflect a bit on the intriguing
question it contained. I concluded that
the opportunities presented by the impending leadership transition at the Eighteenth
Party Congress are far greater for China than for the U.S., but if the new Chinese
leadership elected at the congress seizes those opportunities, there could be
positive consequences for the United States and for the Sino-American
relationship as well as for China itself.
The
most important question posed by China’s leadership transition is whether the country’s
new leaders, presumably headed by Xi Jinping and Li Keqiang, will be prepared
to boldly and successfully address the key challenges facing their country at
home and abroad. The domestic challenges
are numerous, but the most important ones are an economic model that overemphasizes
state-directed investment and exports as engines of growth, enterprise, depresses
household consumption, privileges large state-owned enterprises, restricts credit to private entrepreneurs, and offers
limited outlets for the investment of household savings. Economically, this model has produced a property
bubble, a weak banking system, and the chronic risk of inflation. Politically, China remains vulnerable to
popular unrest and, as a result, maintains tight control over the press, social
media, and non-governmental organizations.
The
issue is whether the new leadership will have the desire and the power to deal
with these challenges. At least one leader
who will retire at the Party Congress, Premier Wen Jiabao, has forcefully
advocated limited political reform and has repeatedly warned of the unsustainability
of China’s imbalanced economic model. But
it is not yet clear that his views will be shared by a majority of the incoming
leadership. The dismissal of Bo Xilai,
the populist leader of Chongqing, is a positive development for proponents of
economic and political reform, but Bo’s are not isolated views in the Party,
and it remains to be seen whether the positions he espoused will be championed
by other incoming members of the Politburo and, if so, what share of power they
will hold.
Internationally,
the steady increase in Chinese military power, Beijing’s increasingly muscular
assertion of territorial claims in the East China and South China Seas, and the
lack of transparency about its military budgets and foreign policy objectives
have led to a growing willingness among neighboring states to engage in at
least a “soft balancing of China, as well as a more open American hedging
against the risks posed by China’s rise..
Some unethical Chinese economic activities in the Third World, Beijing’s
failure to support or fully honor international sanctions regimes against
countries like Iran, Syria, and North Korea, and its reluctance to more fuller
open its economy to imports and incoming investment, have posed serious
reputational risks to China and have limited China’s efforts to develop its
soft power. As in domestic affairs, the upcoming Party Congress presents the
opportunity to select a new generation of leaders who are prepared to address
these international issues, but whether the Party ‘s new collective leadership
will tilt in that direction is as yet unknown.
If China’s
new leaders are more oriented to political and economic reform at home, and
more conciliatory and cooperative abroad, that will indeed present opportunities
for the United States. Indeed, it will present opportunities for both countries
to forge a closer and more stable relationship. But, in the first instance, the
opportunities are China’s – 
