What China Wants

Last week’s APEC meeting in Beijing shed new light on China’s relationship with America and the world. It has become increasing clear what China wants. China seeks a role in Asia comparable to the role that America has enjoyed with regard to Europe; as the unquestioned (but not always followed) leader of an alliance that seeks to protect their region from outside pressures and influences.

As with the U.S. and Europe, China will continue to seek strong economic ties outside the alliance where those are helpful, but for security it wants clear leadership and support from other countries in Asia for China’s goals of greater economic and military power. China does not simply view the U.S. as a hegemon that it wants to supplant, but as a country whose days as global hegemon are over. In Beijing’s view, Washington should make way for other, equal powers, to have leadership over some areas of the globe.

In fact, I think China will find its relationship with other Asian countries more like America’s relationship with Latin America – that is, other Asian countries will view Chinese power with a mixture of admiration and suspicion, and will foster their own nationalism and resistance to China’s hegemony even while seeking advantages from allying with China on certain issues.

Overall, China’s rise to greater regional power and America’s loss of global hegemon status are inevitable. America’s dominance was a result of victories in WWII and the Cold War that left other powers weak. But with China’s rise – now with over four times the population and an economy of equal size (in PPP terms) to the U.S. – it is inevitable that a more balanced arrangement of global power should arise. The only real question is whether that transition will lead to more cooperation between a China and U.S. who increasingly share responsibility for major global issues, or to conflict.

There is a major risk that China and America become rivals, fighting proxy wars or even direct skirmishes over Chinese control of archipelagos in the western Pacific, and over Chinese conflicts with Japan, the Philippines, Vietnam, or other countries. Yet that seems to me the less likely outcome. In fact, China and America share so many interests – in a stable global economy, in free and open sea lanes for transit of raw materials and manufactures, in maintaining peace in the Asia-Pacific region, and in coping with global environmental threats – that cooperation for the most part is more likely.

Last week’s agreement between China and the U.S. on goals to reduce carbon emissions is an excellent example of that cooperation.  At the same, last week showed how differences could be handled.  On human rights, one of the most contentious issues, Chinese President Xi Jinping claimed that China was making progress, although that progress was not yet complete; while President Obama had to make public declarations that the U.S. is not involved in fomenting unrest in Hong Kong.

On the whole, last week’s meeting should reassure those who have been forecasting an inevitable war between a rising China and a declining U.S.  The nature of the relationship will change, but that is good; the world is changing fast and the relationship between the U.S. and China needs to develop and mature to keep abreast of those changes. Judging from last week, that process is moving forward nicely.

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What we learned from the U.S. Election

1) American voters can still swing. Older voters, working-class whites, and young voters can swing in their votes or their participation (huge increases in youth and minority turnout are good for Democrats; weak participation by these groups is good for Republicans) enough to dramatically change election outcomes.   We have seen Democratic triumphs and a Democratic Congress during the Clinton and Obama first terms, and Republican triumphs and a Republican Congress in their second.  But we also saw Republican triumphs during the GW Bush first term, and Congressional changes or even Presidential losses after Republicans George HW Bush’s first term and GW Bush’s second term.  So all predictions of a “permanent” Republic or Democratic majority – which seem to issue forth every eight years! – look hollow.

2) American remains geographically and ideologically polarized. The Northeast and West Coast look predominantly Democratic; the Plains states, Rocky Mountains, and the South look predominantly Republican.   National elections rest less on changing these patterns than on the ability to get out the vote and win strong majorities among supporters in a few key swing states, especially in the mountain states (Colorado, Nevada and New Mexico), the Midwest (Iowa, Ohio, Minnesota, Wisconsin, Michigan), and the mid-Atlantic (Virginia, North Carolina, and Pennsylvania) plus Florida.

3) American foreign policy is more than ever a hostage to domestic politics. If President Obama chooses to persist in his policies of withdrawal and caution in the international arena and in eastern Europe, the Middle East and Afghanistan in particular, he will gain little cooperation from Congress, and will be perceived more than ever as weak and unable to act effectively.  On the other hand, if President Obama chooses to work with a united Republican Congress and adopt a firmer military and strategic stance, he may yet manage to revive perceptions of American strength and resolve.  But that also risks making foreign policy dependent on a Republican hard-core in Congress that has been more aggressive in foreign affairs than most Americans believe is wise.

4) American domestic and economic policy is now essentially frozen for the next two years. Congress is likely to block any progressive changes on immigration or taxation policy, while Obama is likely to veto any changes in health care policy.  It also remains to be seen whether Obama will be able to make any appointments to the federal judiciary or bureaucracy in the next two years; if not the government will continue to suffer from crucial shortfalls in key personnel.

It is now two years until the next major shake-up in American politics.  Hilary Rodham Clinton looks like the politician to beat — but the Republicans, now controlling  Congress and more governorships and state houses than ever — will do everything they can to prevent a Democratic Presidential victory in 2016.  But do the Republicans have any candidate who can beat history?  I do not see anyone now — but two years is an eternity in politics, and it will not be until middle of next year until we know for sure how the race will shape up.  It will be an interesting year.

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Addicted to Denial

Few countries would want, as their national bird, an ostrich with its head firmly in the sand.   Yet more and more countries would seem to qualify.

In Brazil, this week’s elections pivoted in part on the devastating impact in Sao Paolo of the worst drought in 80 years, which has led to water cut-offs, water trucks under police escort, and Sao Paolo’s main reservoir being drawn down to only 4% of its capacity. How could the situation grow so dire in one of the wettest countries on Earth?   The answer: Denial.   For many months, the PDSB political party, which controls Sao Paolo state, refused to admit a problem or implement water rationing for fear it would hurt the chances of Aecio Neves, the PSDB candidate in presidential elections.  But as the drought has continued, the policy has backfired, with Neves held accountable not only for the drought but for PSDB’s mismanagement of water supplies, and losing out in the presidential poll.

Brazil’s PSDB is not alone in preferring denial of a problem to taking action to solve it. Indeed, that seems to be the preferred strategy for leaders facing difficult issues.   Citizens of Europe and the United States were assured that there was no risk of Ebola spreading outside of Africa – until cases appeared in Madrid and Dallas, where denial had produced a lack of preparation among hospital staff to deal with infected victims.

Such denial is familiar to workers in Europe, who have been assured by their leaders that austerity policies are working and leading to economic recovery – until news came this month that growth was still anemic and many European states had slipped back into recession. In the U.S., economic policy-makers similarly deny that their measures to deal with the impact of the 2008 recession have failed, pointing to a fall in unemployment as evidence of their success.  But they ignore the fact that labor force participation rates remain well below their levels before the crisis, and that real wages have not recovered and private debts remain high.  If the core of the Great Recession was excessive debt and stagnating incomes, then we are still in it, and denying that does no one any good.

Throughout the year, European and American foreign policy leaders strived to deny the extent of Russia’s role eastern Ukraine, labelling the movement of Russian troops and armaments onto Ukraine’s territory merely an “incursion.”  The risks to stability in Iraq from the Islamic State were similarly underplayed, leading to utter shock when IS took over large chunks of Iraqi territory.

Of course, the greatest and most prolonged denial is that the U.S. faces any risks from climate change, or that there is anything that we can do about it.   Despite the rising losses of U.S. land to seawater incursions in Florida and Louisiana, despite the damage caused by tidewater flooding during hurricanes Sandy and Katrina, despite the visible movement of dozens of species northwards and the resumption of steady upward temperature rises (summer of 2014 is now officially the hottest summer ever recorded), denial that climate change exists continues apace.

Even on the most basic domestic issues, with problems well-supported by facts, the majority of politicians and the public are happy in their denial: for example that much of U.S. infrastructure is dangerous and lags well behind our economic competitors in China and elsewhere, or that health care in the United States is twice as expensive as in most other developed countries and produces worse outcomes. (The Commonwealth Fund has ranked the U.S. dead last in its survey on the quality of health care in developed nations in every survey since 2004; the U.S. is first in spending per capita but 11th out of 11 in Access to care, Efficiency, Equity, and Healthy Lives).   Yet politicians constantly block spending on much-needed infrastructure, and conservative pundits complain that any government interference will ruin the best health care system in the world.

There was a time when America and other nations rewarded the media and scientists for identifying and publicizing problems that affected their security, health, and well-being; and they rewarded politicians who competed to provide the best solutions. Yet those days seem gone.  Today the highest pay goes to spin-doctors who can obfuscate or create plausible deniability about problems or our ability to respond to them; and politicians seem to feel safest if they can simply deny a problem exists, at least long enough to pass the cumulating crises on to their successors.

Whether it is on health care, economic growth, real wages, epidemics, threats to international security, our climate or our infrastructure, the public and the media should demand that problems be acknowledged, and that responses – even if painful – be undertaken before crises become overwhelming.

Denial is more comforting, of course, than tackling a difficult problem and taking measures to stop it from growing.   However, as Brazilians in Sao Paulo have come to realize, as they now face not only water shortages but the threat of electricity rationing and massive layoffs from industrial facilities that lack power and water because reservoirs have been drawn down to where they can no longer produce hydroelectricity, it is much better to face up to a problem and implement plans to deal with it before it becomes an insurmountable crisis.  Ebola and ISIS are only the two latest cases of small problems that grew far more dangerous while leaders denied the risks.

Truth is dangerous and often hard to find. Still, when problems first become visible, people should not be comforted by politicans’ denials, but be suspicious and questioning.  We need to find leaders who can act like far-sighted eagles, not ostriches.

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Help Ebola victims

You don’t have to just panic about Ebola: you can help its victims in Africa and thus reduce its rate of spread.

Here is an easy place to help:

http://igg.me/p/community-response-to-ebola-in-sierra-leone/x/8912561

Join me in giving whatever you can to help.

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Drifting toward decline

I have just returned from a week visiting Hong Kong and Japan.  What I found there was inspiring and somewhat hopeful in Hong Kong, but distressing in Japan.

In Hong Kong — which in many ways represents China’s best hope for a place where pluralism and free speech and free markets can produce the innovations that China needs to move its economy up the ladder to breakthrough products, instead of labor-intensive manufacturing and local services — China has commendably refrained from harsh repression.  Yet while waiting out the protests, instead of seeking to build trust with the youth of Hong Kong through discussion and some half-measures, it has condemned them as traitors to China’s harmonious order, accusing them of following the promptings of Britain and the US to undermine China.

The courage of the young people of Hong Kong and those who have supported them is inspiring, as was their orderly, disciplined and non-violent protest;  Beijing’s response, while perhaps predictable, is disappointing nonetheless.   My hope is that the determination of Hong Kong’s youth to continue to strive for democracy, but doing so with order and reasonableness, will eventually produce some modest improvements to support Hong Kong’s democracy, such as stronger political parties, or a more effective legislative council.  But my fear is that China’s new leader Xi Jinping will see Hong Kong’s freedoms only as a threat and not appreciate what it can offer to China.  It would be a tragedy, not only of risks of confrontation and clashes, but of lost potential for China, if Hong Kong is slowly drained of its freedoms.

And in Japan, which remains a model of freedom and prosperity, one sees a desperate race with time, technology and culture to adjust to dramatically changing circumstances.   The race with time is against the rapid aging of Japan’s population, which has already begun.  Within another fifteen years, the large post-war cohort, which propelled Japan’s economy and society through economic reforms which made Japan one of the world’s largest economies and the dominant power in East Asia, and in return enjoyed secure employment for life, will enter their seventies.  At the same time, entering the work force will be the smallest cohort of 20 year-olds in history, and moreover a cohort that has already experienced a shift toward temporary employment instead of stable careers, young men who have opted for video games over dating and marriage, and young women for whom work is a greater priority than families.  On current trends, Japan’s working-age population (15-64) will decline by one-quarter in the next thirty years.

With a very low birth rate, and high longevity, after 2030 Japan will have more people aged 80 and over than aged 15-24; this raises the question of who will care for the elderly, and whose wages will be taxed to pay for their health care and pensions.  Japan has responded to increasing government expenses for its aging population by borrowing rather than raising taxes; at over 200% of GDP it now has the highest debt of any developed nation.  This is an awkward situation from which to face another doubling in the ratio of elderly to workers that will come in the next two decades.

While the obvious solution is to encourage immigration of young workers from the still growing nearby populations of the Philippines, Indonesia, and Vietnam, the Japanese population has rejected that solution.  As I was told, the view in Japan of a population facing a decline in workers and rapidly growing needs for elderly care is “We would rather be taken care of by robots than foreigners.”   The distrust and anxiety regarding foreigners is so great, the Japanese would rather gamble their future on technical breakthroughs than recruit willing workers from abroad.

Will it work?  For the technological gamble to pay off, two things have to happen.  First, Japanese companies need to find technology to replace workers and upgrade technology fast enough to generate positive economic growth despite a workforce that will decline by about 1% a year.  This means the productivity of the existing workforce has to increase by 2-3% per year.  Only this will keep the economy growing and provide the resources to care for the fast-growing ranks of the elderly without punitive taxes on the working population.  Second, Japanese companies need to find technology for care of the elderly – everything from providing medical and surgical care to nursing home and companionship – with robotics instead of human workers.  And they need to have all this move from experimental stages to real-world deployment, at affordable cost, within fifteen years!

While one cannot dismiss the possibilities of such breakthroughs out of hand, the past decade does not inspire hope.  In the last few years Japan’s economy has stagnated, with real GDP and GDP/capita flat or declining; productivity has risen but only because hours worked have fallen so that the existing capital stock has been deployed by fewer workers.  Japanese companies have lost market share to Korean and Chinese competitors (and even US and European competitors in autos and computing), as they no longer are producing world-beating advances in quality or design.

Japan has made  huge advances in producing humanoid robots (with smiling faces and the ability to hold simple conversations) and pet robots (which do produce an emotionally positive response).  Humanoid robots that can lift elderly humans start at about $80,000, but a humanoid robot that can climb and descend stairs costs over $2,000,000.  Perhaps crash development for what will clearly be a big market will lead to breakthroughs that allow a robot in every home by 2040!

Could robots be to the Japan of the 2030s what automobiles were to the Japan of the 1970s and 1980s — a world-beating export industry that establishes Japanese industrial leadership and economic power?  That is clearly the hope and prayer of Japanese business and political leaders.  The difference is that automobiles were a well-established consumer good with a simple design; Japan only had to learn to produce them with higher quality and lower cost than inefficient competitors to take over a large portion of the world market.  Here Japan has to pioneer an entirely new product, establish its safety and desirability for different markets, and produce it in large volumes at low costs.  Perhaps a better analogy is the Walkman or SLR camera; new products in which Japan became a world leader.  But again for those products Japan’s global leadership was brief, before I-pods and digital cameras made the Sony’s and Pentax’s of the world also-rans instead of global leaders.

Meanwhile, Japan’s youth avoids marriage, struggles to find secure work, and takes refuge in video games; and its politicians and older generation stick to xenophobic Japanese nationalism.

Japan has a further cultural problem to overcome — it’s traditional attitudes toward women.  Japan has the lowest rate of female labor force participation in the developed world; and women’s prospects for executive positions remain slim.  Japan thus is seeking to rebuild its future with gender bias effectively tying one hand behind its back.  To be sure, women are highly educated and effective workers; the problem is corporations’ reluctance to promote them and trust them as leaders.

So Japan has to overcome technical and cultural obstacles, and soon.  Otherwise, its slide will accelerate and its time as a dominant power in East Asia will be a memory by the second half of this century.

 

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Hong Kong is NOT Tiananmen

Hong Kong’s protests present a major problem for China’s leadership in Beijing. This is not 1989, when China used its army and tanks to dispel student protests in Tiananmen Square.  Both China and the world have changed; and Hong Kong is not Beijing.

In 1989, China could easily control media coverage of its actions, both within China and to the world. And while there were protests in many cities, the action in Beijing was concentrated in the giant central space of Tiananmen Square, a place served by broad boulevards where one could bring large infantry formations and even tanks to bear.  Such forces were easily shifted from distant areas in northern China and deployed to the capital.  After a warning, Chinese authorities could turn out the lights and send forces to disperse the students in the square, who had little recourse.  China suffered some international outrage and a brief spell of sanctions, but these hardly affected its booming growth.

Today, it is far more difficult to suppress news of events in Hong Kong within mainland China, and virtually impossible to prevent images of events in Hong Kong from reaching the outside world.   Suppression of these protests is thus much harder to carry off without creating outrage.  Indeed, within Hong Kong – as in Gezi Square in Turkey and in the Maidan in Kiev – the adoption of harsh crowd control tactics by authorities made matters worse, provoking far more people to join the protests than had originally participated.

In China in 1989, students were demonstrating in hope of creating something new: novel democratic concessions from the Communist Party. Yet in Hong Kong in 2014, people are demonstrating to defend rights they have already enjoyed for decades, namely the right to peaceful protest and free expression, as well to protest the withdrawal of a promise they believed China had made to allow local elections with full and free suffrage in 2017.  Also, today’s protestors in Hong Kong have been able to learn from decades of practice and international teaching in tactics of non-violent protest, including coordination via social media and cell phones to fuel “flash-mob” demonstrations in different places to evade police; use of vehicles (again coordinated by social media) to form “flash” barricades; and how to cope with tear gas and pepper spray while maintaining peaceful civil disobedience.   Today’s Hong Kong protests are better organized, more dispersed, more skilled, and far better justified and clear on their demands than their predecessors at Tiananmen.

All of these factors make it almost impossible for police using ordinary crowd-control methods to disperse the protests. That would take a greater degree of military, perhaps lethal, force; yet the prospect of a massacre of thousands of peaceful protestors in Hong Kong by Chinese military forces is a nightmare that Chinese leaders will try to avoid.  Such a massacre would have a much larger impact today on China’s economy should it result in sanctions affecting China’s enormous imports and exports.  It would also undermine China’s efforts to position itself in organizations such as the Shanghai Cooperation Organization and ASEAN as the harmonious alternative to the United States as the hegemon of East Asia, and weaken its efforts to appeal to Taiwan.

In fact, even in mainland China, where hundreds of protests take place every year over environmental concerns and land seizures for property development, China’s government has sought to avoid use of lethal force in dealing with angry crowds. Instead, China uses non-lethal force to contain the protests; places leaders under arrest or in detention; makes some kind of deal or concession to the crowd; and disciplines local party leaders for failure to anticipate and meet popular demands.  These tactics have kept protests small and contained, and allowed China’s leaders to present themselves as responsible rulers, not tyrants.

So if massacres in Hong Kong are unacceptable, what will China’s government do?

The mandarins in Beijing have two alternatives. One is to do nothing, and try to kill the protest with inaction and disinterest:  they may simply say they have made their decisions and the people of Hong Kong are free to express their opinion, letting students occupy the streets until the Hong Kong business community itself tires of the disruption and asks for the demonstrations to end.   That is risky, however:  even peaceful demonstrations may grow into verbal attacks on the Communist Party and on party leader Xi Jinping; these would be even more dangerous than current demands for the resignation of Hong Kong’s leader Leung Chun-ying, and for open voting in 2017 for his successor.   Moreover, as shown in Kiev, modern protests have remarkable staying power and can go on for months, including “pop-up” demonstrations in different locations that surprise police and create economic disruption.

The second alternative is more likely, and more consistent with China’s approach to handling smaller protests on the mainland. That would be to make some concessions, arrest protest leaders, but also discipline local authorities.  The leadership in Beijing could ask for Leung’s resignation, blaming him for protests getting out of hand.  They could then offer a compromise for the 2017 election, in which a committee picked by Beijing would select one or more candidates, but in which other candidates could emerge from primaries.  Beijing could then use its financial muscle to back its preferred candidate, and count on the popularly-selected candidates to split the opposition vote, making it very likely that Beijing’s preferred choice for Hong Kong’s leadership would prevail, while still honoring the principle of open and free elections.

The real risk is if Xi views the Hong Kong protests as a test of his authority, and deems any concession to be weakness. If Xi takes that course, and confronts the demonstrations head-on, he risks a situation spinning out of control, in which his hand is forced and violence results.  Such an outcome would be terrible for Hong Kong, undermining its role as an international financial center within China boasting English-style security of law and civil rights.  But it would also be terrible for China, undoing decades of efforts to present China as a beneficent, moral, Confucian authoritarian regime capable of raising its people in a peaceful and stable fashion.

Let us hope Xi and China’s leadership choose the path of mixed concessions and responses that avoid a violent clash. With so many violent fault-lines already in the world, and the global economy already weak, we can ill afford another.

 

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Words from God, Lessons for Man

This past week, I was visiting the United Kingdom (still United, thank goodness), to attend a conference at Cambridge University.

While there, I also took a trip north to York University to do some historical study.

While there, I stayed in the old walled city of York.  One evening, I attended an Evensong choir service at the magnificent York minster Cathedral.  There, dwarfed beneath the tallest tower and the widest nave of any medieval church in Europe, I listened to two very apt readings from scripture.

The first was from the book of Job, in which Job wails about the misery he is experiencing without reason.  Job tells us that God brings misery to the just and terrible losses to good men and women, because He can do so.  The second was from the gospels, detailing the crucifixion of Christ and his suffering — again the suffering of a good man who had done nothing to deserve such a fate.

So the world is full of suffering, even among good people, and God will do nothing to prevent it.  A horrible, depressing pair of readings, really.  And with the four horseman of the apocalypse loose in the world – Ebola (pestilence) in Africa, war in the Middle East, famine (from drought) again in the Sahel, and death visible as never before (live on YouTube–beheadings!) – they seemed all too apt.

Yet the message of these texts really is that it is up to us to deal with the terrible turns of fate that inevitably arise, and try to make something out of the challenge and suffering that redeems them.  Whether you believe that Christ actually came back, or that Job’s life really had a happy ending (some scholars believe that was tacked on like a change in editing in a Hollywood movie), what is clear is that we have to continue to make our own efforts to bring closer a world where suffering by good people will be rare or not occur.

In that context, President Obama’s speech today at the UN was extraordinary.  He did not shy away from calling to account all those who contribute to suffering by good people — whether a faceless virus that the US will try to fight, or radical clerics encouraging people to hate and kill, or states that invade their neighbors.  He didn’t sell the task short:  He took on the big historical issue, pointing out that only resolving Sunni-Shi’a conflicts, even if that takes a decade, is the only way to “stop the madness” of continued cycles of violence.

At the same time, Obama didn’t exaggerate the ability, role, or purity of the US.  He pointed to our own racial conflicts, and rightly said the only thing that separates us is that we have transparent media, laws that work, and hold leaders accountable in ways that allow us to gradually move closer to our ideals.

This is potentially a turning point for the Middle East and North Africa. If the various religious conflicts in the region can be diminished, it could be comparable to the ending of the Wars of Religion in Europe in the 17th century — which by the way kicked off the Enlightenment, scientific advance, religious pluralism and eventually the birth of the United States.  So this is a big, big goal, worth all the time and effort it will take to pursue.

Obama ended his speech by saying that peace begins close to home, in people’s neighborhoods, schools, and work.  This morning, driving to my Metro stop in suburban Virginia, I passed a school bus picking up children.  There was a tall blond mother waving to her daughter; alongside her were women in headscarves and robes waving to their sons and daughters — all of them wanted only one thing at that moment: for their children to have a good day.   America is a place where most children can go to school, and most of the time hope for a good day, regardless of their religion (to be sure, and sadly, for different racial and ethnic groups we can’t say that so often).  That should be the goal — a world where in all regions all mothers can send their children off to school, believing they will be safe, get a good education, and be able to plan for a better future.  When we get there, we should also have a lot less needless suffering by good people.

 

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