Tag Archives: china

‘Warring States’ — The Coming New World (Dis)order

Summary:  Geopolitical understanding comes through seeing the the world through others’ eyes, from other perspectives than our own. Today we have a description of the new world order as seen from China, written by Eric Li (a Chinese venture capitalist).

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“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”

— Draft of the Defense Planning Guidance for the 1994-99 (18 February 1992) written by Undersecretary of Defense for Policy Paul Wolfowitz and his deputy Lewis “Scooter” Libby. The resulting uproar forced a prettier final version that masked the government’s true intentions. See Wikipedia for more comparisons between the honest draft and the pretend-final version.

Shang Yang

Shang Yang, statesman of Qin (390 – 338 BC)

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Contents

  1. Introduction: about the old global regime
  2. The Ailing Narrative of Dichotomy
  3. The Dragon Reemerges
  4. Levithan vs. Free Rider
  5. Leviathan Retreats, a New Future Opens
  6. About the Author
  7. For More Information

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‘Warring States’ — The Coming New World (Dis)order

By Eric Li
Originally published at The Asan Forum, 7 October 2013
Adapted from a lecture given at the Asan Institute for Policy Studies in Seoul.
Reposted here with their generous permission

The Korean Peninsula is the last citadel of a bygone era. Since the end of the Cold War, the United States as the reigning superpower has been the anchor of a global architecture built after World War II and solidified during the post-Cold War period. It is organized around a narrative of dichotomy that has dominated international relations for more than half a century. It is a single fault line narrative and ideology is its cornerstone. A worldwide Western alliance, of which South Korea has been a staunch member from almost day one, led and paid for by the United States, is charged with the mission of maintaining and continuing to expand this global architecture.

This era has gone through two phases. The first was the post-WWII phase during which two universal ideologies were engaged in an existential struggle around the globe: Soviet communism vs. democratic liberalism. Both were modern and both were Western. Furthermore, both were brands of historical determinism in that each claimed the inevitability of a preconceived destination for all mankind. In Soviet communism, class as the fundamental unit that transcended all cultural identities would take the whole world to the communist utopia. On the other side of the coin, democratic liberalism counted on divinely empowered individuals to vote their way to the liberal paradise. Both armed themselves to the teeth and drove their visions from continent to continent. In the end, the Soviet Union collapsed and the American-led West lived — hence the American century.

The second phase was the post-Cold War period. Victory in the Cold War led the West to embrace, in the traditions of Hegel and ironically, Marx, an inexorable linearity to history. The United States would lead the victorious Western alliance to implement the utopia of democratic liberalism to cover every corner of the earth. Electoral democracy and market capitalism were to be the building blocks of a new world order. Six billion rational individuals would all make the right choices in the voting booth and the marketplace and, thereby, eventually unify the world under a single set of political, economic, and even moral rules. In the euphoria of globalization many were led to believe that national sovereignty was passé and universality was within reach. Here, the single fault line is between the democratizers and market openers on one side and those who resist conversion or are yet to be converted on the other. Three approaches have been pursued against the latter: direct military containment or invasion (North Korea and Iraq), fostering color revolutions (former Soviet republics and the Middle East), and peaceful evolution (China).

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Danger, America! Wet your pants in fear of China!

Summary: Ruling requires work. Feeding internal factions to prevent collective action. Feeding fears of others, turning their gaze to foreign foes. Feeding misinformation so that they no longer clearly see or understand the world, so that they cannot predict or adapt. Fortunately Americans makes this easy. Here we examine a case study in an America lit only by propaganda.

Click to enlarge

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The news media is conducting yet another propaganda barrage on America, as directed by DoD. Here are some samples:

The first story relies on sources which Bloomberg News believes credible:

QinetiQ was only one target in a broader cyberpillage. Beginning at least as early as 2007, Chinese computer spies raided the databanks of almost every major U.S. defense contractor and made off with some of the country’s most closely guarded technological secrets, according to two former Pentagon officials who asked not to be named because damage assessments of the incidents remain classified.

This is obviously an authorized information operation (expect no arrests under the Espionage Act). We don’t know for whom these guys now work (Bloomberg forget to tell us). Would you bet they work for a firm that benefits from cyber-war-hysteria? Also, they show little curiosity as to how China — just emerged from the Third World — developed better cybertechnology than our lavishly funded Defense cyber-infrastructure.

The other stories follow the same pattern: artfully designed leaks from the government and its vendors, reported as gospel by news media’s stenographers. For a journalist’s report on this story look to Kelly Vlahos: “Cyber War: Another Epic Fail“.

I’m glad that DoD found a new ways to incite our fears. The old ones had grown stale:

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Social unrest coming to Europe? If not, why not?

Summary: Five years of crisis in Europe, yet its streets remain mostly calm. What accounts for this? How long will it continue?

“At the heart of the crisis, there is the challenge of redefining the social contract to safeguard the sustainability of Europe’s social model.”
Speech by Benoit Coeure (Executive Board of the ECB), 2 March 2013

“Spot on, Benoit. The trouble is European leaders and institutions seem to want to redefine the contract in ways that at least half of European citizens don’t approve, or trust them to carry out. So underneath the three-headed crisis of austerity, banking and sovereign debt, we have one of legitimacy and trust, which is feeding social unrest.”
— George Magnus, Economic Advisor, UBS, 20 March 2013

Liberty Leading the People, Eugène Delacroix (1830)

The painting “Liberty Leading the Way” commemorates the July Revolution of 1830, midpoint to a century of social unrest in France. It shows the result of mismanaging the forces of change.

Contents

  1. Why is Europe still stable?
  2. What comes next?
  3. Compare with China
  4. Leave a comment
  5. For More Information

(1)  Why is Europe still stable?

The stability in Europe since the second downturn began in March 2010 has surprised many observers (eg, me). Three years of depressionary conditions in the periphery have produced no large, severe outbreaks of social unrest. Elections have produced majorities in favor of the European Union and the austerity it mandates (we’ll soon see if February’s election in Italy broke this record).

What produces this stability? The usual supports for incumbent systems are human inertia and people’s dislike of radical change.  Hence the failure of the frequently made forecasts of regime change in developed nations. But those explanations seem in adequate, as does embrace of the EU from fear of war.

History provides a possible answer: the lack of an alternative. Thomas Kuhn in his The Structure of Scientific Revolutions (1962) says that scientific paradigms die not when they are disproven, but when they are replaced by a superior alternative. In much the same way revolutions (peaceful or otherwise) require a new political or economic ideology that can substitute for the old.

Without an alternative, accumulated stress breaks out in futile forms, such as protests and riots. These are a commonplace of history, such as the peasants’ protests (Wikipedia) and race riots (Wikipedia). These can produce incremental reforms (although they usually didn’t), but participants seldom had a vision of a realistic better system. Although recognized as defective, other systems were considered less attractive or unworkable (eg, plutocracy in Holland, city-states in Switzerland). For centuries this provided a buttress for European monarchies.

(2)  What comes next in Europe?

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About China’s real estate bubble: fact and fiction

Summary: Facing a new powerful rival presents a hegemon with choices. We can improve our game, reform, revitalize to meet the challenge. Or take refuge in fantasy, ignoring our weaknesses and exaggerating those of our rival. America has chosen door #2. Here we peer through the propaganda fog, seeking a better perspective on one aspect of the China’s bust forecasts — China’s real estate bubble.

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China’s real estate bubble, 60 Minutes, CBS News, 3 March 2013 — “If trouble comes in threes, then what’ll be the next global market to melt down after the U.S. and Europe? Some are looking nervously at China.”

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In 2001 attorney Gordon Chang published The Coming Collapse of China. He listed China’s most serious problems, concluding

How much time does China have? No one knows for sure, but China cannot continue to spend at the current pace for much longer. Beijing has about five years to put things right. No government, not even China’s, can defy the laws of gravity forever.

In the 13 years following that prediction China’s rapid growth has continued. Since then many others have joined Chang’s chorus of doomsters (few or none acknowledging the failure of their forecasts). And China does have serious problems. Even its long period of rapid growth has become problematic, inducing stress requiring fundamental political, economic, and social reforms. But everybody, every nation, has problems. What differentiates the fates of nations? One factor is their ability to see their challenges and respond to them. China’s history since Mao’s death in 1976 shows such wisdom and adaptability, probably on to a greater degree than Japan, Europe, or America.

Another is their boldness and willingness to invest in their future. That was once a characteristic of America, with the government undertaking great projects before they were commercially viable, such as the Erie Canal and the Transcontinental Railroad. Contrast America’s mad low level of infrastructure investment (shown here). Now we mock China for doing something similar, building high speed railroads — while they can do so cheaply, to be used for the next dozen generations. Which decision will look wiser a century from now?

Today’s the doomsters focus upon China’s real estate boom, probably projecting America’s stupidity on China’s leaders. It’s mad imperial logic:

  • We poorly handled our real estate bubble.
  • We’re better than China.
  • Therefore China will do even worse. QED.

But there’s always a remnant of the clear-sighted — those who see the world in terms of data and processes, not fears and linear extrapolations. For example, here are some excerpts from a Bank of America Merrill Lynch’s report “Demystifying China’s ‘ghost towns’”, by Ting Lu, Xiaojia Zhi and Larry Hu (13 March 2013).

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Can we see China through our veil of propaganda?

Summary: Our newspapers coverage of the world consists to a large extent of propaganda. Nations appear as either allies, enemies, and wilderness. And rivals are often portrayed as enemies, no matter ow much spin or outright fabrication required. Here we look at China, attempting to see through the fog.

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The first of two posts; tomorrow we look at China’s real estate bubble.

Contents

  1. China the evil militarist
  2. China the cyberattacker
  3. For More Information

(1)  China the evil militarist

China dares to seek regional hegemony, just like the US did early in our history. They date to seek military strength proportionate to their new rank among the world’s great powers.  Our government — echoed by its courtiers and the press — portrays these things as evidence of China’s malevolent intentions to disturb world peace. Seldom mentioned is that the US and its allies outspend China’s military by 7x+.  Spending just by Japan, S Korea, and Australia almost equals China’s.

What China should say to the world:

It is only when our rights are invaded or seriously menaced that we resent injuries or make preparation for our defense. With the movements in this hemisphere we are of necessity more immediately connected, and by causes which must be obvious to all enlightened and impartial observers.

We owe it, therefore, to candor and to the amicable relations existing between China and those powers to declare that we should consider any attempt by other nations to extend their influence to any portion of East Asia as dangerous to our peace and safety.

We could not view any interposition for the purpose of oppressing our neighbors, or controlling in any other manner their destiny, in any other light than as the manifestation of an unfriendly disposition toward China. It is the policy of China to leave our neighbors to themselves, in hope that other powers will pursue the same course.

— A slightly altered version of the key lines of Monroe’s speech in December 1823

Would China be sincere in these words? Based on their history, probably more so than was the United States. In the 19th century we provoked war with Mexico, taking one-third of its land.  In his Memoirs Grant described the war as

“one of the most unjust ever waged by a stronger against a weaker nation. It was an instance of a republic following the bad example of European monarchies, in not considering justice in their desire to acquire additional territory.”

That was just the opening act of our sad relation with our southern neighbors. See this list of US interventions in Latin America during the 20th century.  Little in China’s long history suggests that it will act as belligerently as has the US.

For more info see “China’s Military Development, Beyond the Numbers“, Andrew S.Erickson and Adam P. Liff, The Diplomat, 12 March 2013.

(2)  China the cyberattacker

Lately the news media have overflowed with allegations of cyberattacks by China. This joins together two streams of US propaganda.

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A reason for the US military expansion into Africa

In 2004 the US military began to expand into Africa. In 2007 they created Africa Command (Africom). Since then they’ve accelerated and expanded operations. Africa has great natural resources, but why more interest now?

Here is one possible explanation: the great game. A rival great power expands its reach and things of no interest to us suddenly become worth contesting.  China has become a major importer from many African nations, and the US replies to this challenge in the only way it knows how.

From Bloomberg Briefs, 26 February 2013

From Bloomberg Briefs, 26 February 2013

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What will China’s new leaders do? Bold or incremental reforms?

Summary:  China is one pole of the 21st century world. Skeptics have predicted China’s crash for over a decade.  Even the IMF has began warming about China’s over-investments and shake banking system. Now a new generation of leadership take command. Much depends on their decisions, which will affect both China and the world.

china-bubble

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Western experts believe China’s new leaders will act cautiously and conservatively on their major domestic programs:

  1. they will prioritize steady strong economic growth over structural economic reform,
  2. they will avoid potentially destabilizing (ie, large) political reform, hoping that steady economic growth maintains the Communist Party’s legitimacy.

Both of these goals seem unwise. The combination might be lethal for China.

China has long-deferred problems, and a window of strong growth in which to act. The alternative, so common in history, is to delay until an economic crisis forces action — under difficult circumstances. Most leaders believe that delay preserves options.  False. Time inexorably closes more options than it opens.

Another scenario:  China’s new leaders, who take office in March, act boldly to take advantage of the “new team” honeymoon. Political capital is usually strongest on day one, and tends to decline over time (ie, friends come and go; enemies accumulate).

However, even bold action might prove futile since these goals are contradictory.

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