Dealing with the China we Have Rather than the China we Wish to Have

cross-posted from

A Sinocentric view of the maritime world courtesy of  The Policy Tensor (hat tip Historyguy 99)

An amigo who is an expert on China pointed me toward a couple of links last weekend. Here is the first:

Japan-China COLD WAR 8 / CPC decisions made under layers of veiled obscurity 

….Whenever a crisis occurs, diplomatic authorities typically attempt to assess the situation by contacting their counterpart of the country concerned to investigate, if any, what their intentions are. For example, the incident could merely have been an accident or a calculated act sanctioned by those at the center of the administration. But when the Chinese become involved, such diplomatic approaches may no longer be a possibility.

The Chinese Foreign Ministry, which is supposed to be the equivalent of the U.S. State Department or Japan’s Foreign Ministry, is “merely an organization which carries out policies decided by the Communist Party of China (CPC),”a senior Foreign Ministry official said.

Foreign Minister Wang Yi is just one of 205 members of the Central Committee of the CPC, and is not even included in the 25-member Politburo, which is regarded as the party’s leadership organ.

Indeed, when the Chinese National Defense Ministry announced the establishment of the air defense identification zone (ADIZ) in the East China Sea, including the Senkaku Islands, on Nov. 23, the Japanese Embassy in Beijing approached the Chinese Foreign Ministry. However, an official in charge at the ministry said, “We don’t know about it [ADIZ], as it’s outside our jurisdiction,” which left the embassy nonplussed.

If the Chinese Foreign Ministry is of so little use, then where are the country’s diplomatic policies worked out? Important decisions are made by the Central Leading Small Group on Foreign Affairs, while decisions on military affairs are carried out at the Central Military Commission.

The two organizations are central organs within the CPC, erecting a barrier for diplomatic and defense authorities of the United States or Japan. Discussions in these organizations are kept secret from the outside. Diplomatic relations in China are complicated further by individual diplomatic issues sometimes being used as ammunition to attack rivals in power struggles within the Communist Party.

….Between the United States and China, there is the Military Maritime Consultative Agreement (MMCA), signed in January 1998. However, the accord was no use on occasions such as a collision between a U.S. Navy plane and a Chinese fighter jet over the South China Sea in April 2001.

Former Defense Undersecretary for Policy Michele Flournoy, who was the chief negotiator in vice ministerial-level defense talks with China under the first administration of Barack Obama, said during an interview with The Yomiuri Shimbun on Feb. 4, that the United States tried to have the MMCA function, but the Chinese side took a backward-looking stance. Although there is a mechanism there, China had almost no intention of complying with the mechanism properly, she added.

Our problem here is not China or the Chinese government, but our own credulity in the face of empirical evidence. The Chinese are simply playing their cards well for as long as we are going to allow them to do so. In their shoes, I would suggest doing exactly the same so long as it keeps working.

Getting your adversary to negotiate with powerless and ill- informed  representatives while the real decision makers sit at a remove is a time- tested tactic in bargaining.

The side that uses this approach gets at least two bites at every apple which means the other side increasingly has to give further concessions to secure what they thought had already been agreed to. It is a classic example of negotiating in bad faith. Furthermore, the side using it is the one interested in winning or at best, in buying time, not in reaching an agreement.

When presented with this dynamic the smart move is to walk away and immediately implement whatever the other side would rather you not do or give up the game and move on to something else. Agreements and treaties have no intrinsic value unless they advance, or at least preserve, interest. If the other party has no intention of abiding by the terms at all then they are less than worthless, being actively harmful.

China’s decision-making is both opaque and riven by factions about which Americans are poorly informed, even those who have real academic expertise and language fluency are forced periodically to read tea leaves about high level decisions within the CCP.  The following link represents a certain attitude among more nationalistic Chinese elites:

China Should Coordinate the Gradual Fall of the U.S.

When a giant is about to fall, you should give him certain support to help him to fall down slowly instead of his falling down all of a sudden, or you would be the one who suffers. That’s why I said “China should coordinate the gradual fall of the U.S.” instead of allowing her to collapse all at once.

….In the long term, the U.S. is heading towards decline and will become weaker and weaker. However, the so-called “weak” is a comparative word. In comparison with China, the U.S. is still very strong. The U.S. is going down from the summit, whereas China’s is climbing up from below. 

Sohu Business: That is to say, we do not need to worry about the overall safety of China’s foreign exchange reserve over a period of time?

Sheng Hong: Yes, but we still need to be constantly alert. In the long run, the U.S. dollar will gradually weaken and a crash of the currency is possible when it weakens to a certain extent. This is because, one way to solve the U.S. debt problem is to borrow, and another important way is to increase the supply of dollars, which will further weaken the U.S. dollar. 

If people lose faith in the U.S. dollar and anticipate the U.S. government to continue the inflation policy, they will sell dollars and aggravate the crash of the currency. This, however, will not happen at once. Moreover, the U.S. government is rather cautious at present. Although it is inclined to a loose monetary policy, including the quantitative easing monetary policy, thus increasing the amount of U.S. dollars, which made up the U.S. fiscal deficit, fiscal problems will soon be reflected in its currency. Therefore, in terms of interests, China must be very careful though this problem will not happen right now and that the U.S. dollar is still stronger than the RMB now; in terms of strategies, China should pay more attention to and begin to make preparations for it. Or it would be too late to prepare when that day comes.

…. In fact, the turning point came out long ago. Moreover, I have mentioned in my articles published previously that the turning out was actually the financial crisis which occurred at the end of 2007 and the beginning of 2008. Now, it’s just that some people attached labels to current events, before which many people did not even know about the situation. Nevertheless, economists should start their analysis from the financial crisis. I mentioned in my article titled Who Would Let Obama Stand Alone? that Americans could not blame others for questioning the safety of the U.S. assets since they caused the financial crisis by themselves. I won’t buy your financial assets if I do not trust their safety. If you want me to buy your financial assets, you must offer higher returns. When you lose others’ trust in you, you are already going down from the peak. 

The 9/11 Attacks struck the U.S. seriously, but not as seriously as the Financial Crisis did. The Financial Crisis was inherent rather than extrinsic. I have been following this issue ever since the financial crisis. I said at that time that the U.S. would gradually head towards decline. The debt crisis happened because not so much seigniorage could be collected any more. The U.S. has inertia in foreign military contacts which prevents it from withdrawing its troops from Afghanistan and Iraq at once, and it had to cope with the financial crisis. Therefore, the debt crisis is inevitable. It is not a turning point but a label attached by S & P. 

….The military contraction. This is very important. After Obama came to power, he clearly sensed that the military existence by the U.S. throughout the world could not remain the same as before because the U.S. has less and less money. The reality of the U.S. faced by Obama is an inevitable continuous contraction, which is actually a strategic turning point of great significance for the U.S. I mentioned just now that when trade deficits are reduced, less reflux of dollars will be attracted, resources of military expenditure will be reduced, and then military forces should be contracted. 

It is human nature to not want to accept the reality that some people genuinely intend us harm. Sure, in the abstract yes but when eye to eye people tend to bend themselves into pretzels giving the other person the benefit of the doubt when the empirical record indicates otherwise. This willing gullibility is why con games have such staying power when the first instance of bad faith is usually a foreshadowing of the nature of who you are really dealing with. It is so much easier psychologically to ignore rather than to confront and embrace conflict (even when it is only rhetorical).

The elephant in the room is that there’s an influential faction within China’s elite that has unrealistic to grandiosely hegemonic ambitions regarding China’s role in Asia and the world. They are not the entirety of China or even China’s leadership, but given China’s aggressive bullying behavior of the past three to five years, they appear to be ascendant. That is a strategic dilemma for the US and its allies.

Our job is to interrupt their momentum so that their hopes come to grief and our that moves that strengthen the faction in China’s leadership that prefers peaceful and harmonious relations over conflict with all of China’s neighbors and the United States.

13 thoughts on “Dealing with the China we Have Rather than the China we Wish to Have”

  1. China is not as strong as it thinks it is. They have serious problems with corruption, the “ten thousand princes” among others. The ghost cities are an example of the problem.

    What we find is that not only is the overcapacity problem nowhere close to being resolved, but that 20 new “ghost” cities are taking shape in this year alone. Full video report after the jump (click on the Chinese Eiffel tower for more).

    The situation may be considered as similar to what would have happened had the Soviet Union done a better job with its oil and gas deposits. The decision making process is still crippled by communism (actually fascism) and central control.

    That doesn’t help us as we are in the grip of economic lunacy by Democrats and people who vote for them. Japan should have proved that Keynes doesn’t work in the modern world. They actually built real infrastructure instead of Potemkin “green projects” that never worked. It didn’t help. They are still mired in a sluggish economy and a declining population as Japanese women flee family life. The Japanese invested their savings in postal savings accounts that pushed a real estate bubble. China is repeating the mistake but with phony ghost cities.

    Their prosperity is localized to coastal zones while our real estate bubble ( the new one) is similarly located in blue state coastal zones. Chicago is peculiar in that the prosperous zone is a small enclave with a violent surrounding minority zone. My sister lives in Beverly which was an upper middle class community when I lived in Chicago 50 years ago. There are muggings in her neighborhood every two weeks or so. The “wildings” on North Michigan Avenue seem quiet but that may change if the weather ever warms up.

    I wish I was more optimistic but the Romney loss in 2012 really seems like “apre moi deluge.” China is also weaker than they seem to know.

    Orange Count CA is safe but the real estate prices are ridiculous. I try not to talk about this with my children.

  2. The relative strength of the PLAN is increasing compared to the JNSDF. The first PLAN Aegis equivalant warship has delivered.


    Chinese Navy (PLAN) Commissions 1st Type 052D Destroyer DDG-172, Kunming

    March 21, 2014

    “The Chinese Navy commissioned the first of class, Type 052D,
    destroyer, DDG-172, Kunming, on March 21, 2014. This is a new class of
    destroyer that is a significant upgrade over the Type 052C, Lanzhou
    Class, destroyers that the Chinese have finished building six of. The
    Lanzho Class was Chinas first true multi-rile, wide area defense
    destroyer employing a sophisticated battle management system, Phased
    Array Radars, and Vertical Launch missile systems. That earlier class
    had 48 cells for surface to air missile to defend a large group ships
    (like a carrier battle group) against air attack from aircraft or

    The Type 052D Class, or Kunming Class, has been upgraded
    significantly. This vessel employs 64 cells of vertical launch
    missiles that are capable of launching anti-air missiles, anti-surface
    missiles, or anti-submarine missiles from the same cells, similar to
    the US Navy Mk-41 Vertical Launch System. In addition, the vessel
    sports a new main gun, a 130mm dual purpose gun supposedly capable of
    firing extended range munitions. Critically, the vessel is also fitted
    with larger and more powerful Active Phased Array Radars (APARS) over
    the Lanzhou Class, which will undoubtedly have longer range, and may
    well have better discrimination and resolution over their earlier

    In addition, rather than two 30mm Close in Weapon System (CIWS) guns,
    the Kunming carrier a CIWS gun forward, but now has a 24-missile
    launcher, the FL-3000N, aft, over the helicopter hanger deck for close
    in missile defense. This system, also deployed on the Chinese aircraft
    carrier, Liaoning, CV-16, appears to be the equivalent of the US Navy
    RAM missile system.

    With these improvements, the Chinese Navy, with the Kunming Class, are
    approaching parity with the US Navy systems deployed on the AEGIS
    Destroyers of the Arleigh Burke Class…though the Chinese vessels are
    2,000 tons lighter and less heavily armed.”

    Later, after much snippage:

    “When you consider this in light of the twenty very capable and very
    modern Type 054A Frigates that have built over the last five years,
    and the twenty Type 056 modern corvettes they have built in the last
    two years, with another twenty of those slated to be built, the rapid
    expansion, growth, and modernization of the Chinese Navy is a
    significant occurance, with broad impact in the western Pacific.”

    Specifications for the Kunming Class follow:

    Designation: DDG
    Displacement: 7,400 tons (Full Load)
    Length: 505 ft (154m)
    Beam: 56 ft (17m)
    Draft: 20 ft (6m)
    Propulsion: 2 QC-280, CODOG, two shafts
    Speed: 32 knots
    Range: est. 6,000 nautical miles @20 knots
    Crew: 280
    Helicopter(: 1 KA-27 ASW, Pad & Hanger
    – Unknown APARs
    – Radars 517H1, Sea Soul, TR-47C, OT-3 EO
    – Unknown sonar
    – 32 cell VLS fore
    – 32 cell VLS aft
    – 1 X 130mm DP Gun
    – 1 X Type 730 30mm CIWS
    – 1 X FL-3000N launcher (24 missiles)
    – 4 X 18 ASW MLRS
    – 2 X 3 YU-7 Torpedoes

  3. The China we have took a shortsighted demographic shortcut and have just peaked in terms of their demographic dividend. They are in trouble for the next few decades because of their one child policy. They will likely briefly eclipse us and then fall behind.

    The US lacks the most basic management tools to oversee the nation’s public sector. It’s not particularly hard to do this but it is work that neither left nor right seems to be eager to do. When we do that work, we’ll start pulling out of our malaise because we will have truly started to enter the information age.

  4. Wars result from misunderstanding.

    China understands that the US will not defend Japan, S Korea and Taiwan if they are attacked. This understanding will be reinforced when Putin re-integrates the Ukraine into the Russian Empire. Obama will not fight.

    China will take back the Near Sea and ‘reunite’ North and South Korea. Obama will not fight and Michelle will crowd out China coverage by getting massive news coverage in her war on overweight infants.

    China will attack the Philipines, the Navy will retaliate, Obama will declare a mutiny and impose martial law. Putin will restore the old frontiers of the Russian Federation/Empire that were lost in the 90s.

    Obama will raise minimum wage to $150.00/hour even though inflation will still be reported at 1% and unemloyment at 3%. The last aircraft carrier will be retired. Obama is President for Life.

  5. “They are in trouble for the next few decades because of their one child policy.”

    It’s actually worse than that because of selective abortion of females. There are millions of Chinese men who will never marry. You can build a population with excess women and few men. Muslim countries have shown that. The other way doesn’t work but Chinese tradition trumped “family planning.”

    Another phenomenon I’ve noticed is Chinese women marrying non-Chinese men. Traditionally Chinese men and women chose each other for mates, even in the US. Some of it may have been prejudice by whites but there has always been a tradition of Chinese seeing themselves as superior. My experience is limited to a few personal examples but I know a number of highly educated Chinese women who have married Caucasian men, both here and in China. I wonder if it is a reaction to the sexist abortion phenomenon or maybe just a reaction to a wider scope for choosing mates.

    The two examples I know best involve women born and raised in China marrying, in one example, an American and in the other, another westerner.

  6. And in the face of all this there are people urging all possible action to piss off Russia. Ludicrous.

    Since Taiwan and Korea are indefensible, the US must decide whether it is prepared to defend Japan. Presumably not.

    On the other hand, cheer up. People who think that surface ships are a fine investment for warfare in the age of modern missiles and submarines are showing poor judgement.

  7. “Since Taiwan and Korea are indefensible, the US must decide whether it is prepared to defend Japan. Presumably not.”

    Lawyers call this “assuming facts not in evidence.” Taiwan is defensible and might even have nukes for all we know. South Korea is in a dangerous place since their largest city is a hostage to the North’s artillery. Whether they could resist an NK invasion is unknown and we have 25,000 or so trip wire troops there.

    China has nukes to threaten Japan and I expect that Japan is now thinking seriously about acquiring them as well.

    Obama is risking a lot on the basis of his left wing sentiments.

  8. ” Obama is risking a lot on the basis of his left wing sentiments.”

    Yes, it’s always been a dangerous playing for time with his leftist-naivete and his hopefully growing ability to change his mind in order to achieve a clearer view of the world (since he was elected). At least so far failures due to his pathology have not been of a catastrophic nature.

  9. This is a fascinating strategic discussion point. The reference to the Policy Tensor is also great. Thanks!

  10. Not everybody is convinced China is as strong as they think they are.

    Curious what the real, and not pre-spun for public consumption, sentiment on the ground is in a China (where the housing bubble has already popped and the severe contraction in credit is forcing the ultra wealthy to luxury real estate in places like Hong Kong) from the perspective of the common man? The photo below, which shows hundreds of people rushing today to withdraw money from branches of two small Chinese banks after rumors spread about solvency at one of them, are sufficiently informative about just how jittery ordinary Chinese have become in recent days, and reflect the growing anxiety among investors as regulators signal greater tolerance for credit defaults.

  11. Key points:

    Getting your adversary to negotiate with powerless and ill- informed representatives while the real decision makers sit at a remove is a time- tested tactic in bargaining.


    It is human nature to not want to accept the reality that some people genuinely intend us harm. Sure, in the abstract yes but when eye to eye people tend to bend themselves into pretzels giving the other person the benefit of the doubt when the empirical record indicates otherwise. This willing gullibility is why con games have such staying power when the first instance of bad faith is usually a foreshadowing of the nature of who you are really dealing with. It is so much easier psychologically to ignore rather than to confront and embrace conflict (even when it is only rhetorical).

    Even disregarding the Obama people’s ideologically driven efforts to knock the USA down to size, their ineptitude in basic negotiating tactics is remarkable. They know only to threaten allies and give away the store to adversaries.

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