We Need a New Approach to China Even if We don’t Care About Human Rights and Free Trade

Journal of Political Risk, Vol. 6, No. 2, February 2018

By Ho-fung Hung, Ph.D.

Obama era officials Kurt M. Campbell and Ely Ratner recently published “The China Reckoning: How Beijing Defied American Expectations” in Foreign Affairs, arguing US’ assumption underlying its China Policy over the past several decades has been wrong. They admit that China has not changed in the direction most China hands in the US had expected. Rather than becoming more liberal and democratic, it became more authoritarian; rather than more opening to trade, it became more protectionist. They call for a reorientation of Washington’s approach to China. This article has triggered some internal debate and soul searching in the China watchers’ community.

It is understandable that many who expect China to embrace liberal democracy and more economic openness have been disappointed. What is missing in the discussion is that even many realists and corporations who do not care too much about the ideals and principles of economic and political liberalism are frustrated with China too. Over the last few years, another China reckoning is that China is unable, or never intended, to deliver and keep its promises even on many economic and geopolitical issues that are unrelated to the sensitive areas of political reform and change.

Graffiti depicting a portrait of former Chinese leader Mao Zedong with Chinese yuan signs in his eyes, on a wall in Shanghai on March 1, 2017. Source: JOHANNES EISELE/AFP/Getty Images.

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China Grew Up, and Now? Utilitarianism, Democracy and A Moderating Role for the Holy See

Journal of Political Risk, Vol. 6, No. 2, February 2018

By Francesco Sisci

In the past few months, stretching out no longer than a couple of years, an important controversy has mounted in America and the West, in which some argue that we foreigners were fools to believe we could change China. China in the past 40 years, since the U.S. started cooperating with her, taking her under wing, just fooled us and did what it always wanted – remained communist (thus anti-capitalistic) and with a value system different than ours (and thus against our value system). The Holy See, who has proven capable of striking deals in China and also holds a high moral ground in the West, may be able to find a middle way.

Red Guards of the China Foreign Affairs University make a vow with “from Chairman Mao” in hands in front of Tiananmen Rostrum in October, 1966 in Bejing, China. Red Guards were a mass paramilitary social movement of young people in the People’s Republic of China (PRC), who were mobilized by Mao Zedong in 1966 and 1967, during the Cultural Revolution. Source: VCG via Getty Images.

Chinese soldiers march with riot shields outside the Great Hall of the People in Beijing, after the introduction of the Communist Party of China’s Politburo Standing Committee, the nation’s top decision-making body, on October 25, 2017. China unveiled its new ruling council with President Xi Jinping firmly at the helm after stamping his authority on the country by engraving his name on the Communist Party’s constitution. Source: GREG BAKER/AFP/Getty Images.

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China’s Sociopathy, and its Cowardly Watchers

Journal of Political Risk, Vol. 6, No. 2, February 2018

WHAT’S WRONG WITH CHINA
By Paul Midler
227 pp. Wiley. $25.00

Paul Midler’s What’s Wrong With China doesn’t disappoint. Anecdotes, theories, and historical curiosities fall from its pages in answer to its titular question. Midler’s stories of caution are current, enjoyable, accessible, historically grounded, and witty. But the deeper importance of the book is that Midler, as a sharp and knowledgeable outsider to academic China studies, can criticize, revive, and develop theories in a way that staid academics would never dare. In a field careful about even mentioning sensitive topics like Taiwan, Tibet, and Xinjiang, Midler’s latest book is a bulldozer with bumper-stickers to offend almost anyone. Which is why it’s a great read. The field is being shaken up by President Trump’s tweets, President Xi’s disconnect with how his increasingly totalitarian government is perceived abroad, and now by Midler.

Guangdong, China, in 2011. Source: Paul Midler.

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China’s $60 Trillion Estimate Of Oil and Gas In The South China Sea: Strategic Implications

U.S. hydrocarbon estimates imply a maximum of $8 trillion worth of oil and gas in the region, explaining part of the strategic divergence of the two superpowers.

Journal of Political Risk, Vol. 6, No. 1, January 2018

By Anders Corr, Ph.D.

China’s estimates of proved, probable and undiscovered oil and gas reserves in the South China Sea imply as much as 10 times the value of hydrocarbons compared with U.S. estimates, a differential that has likely contributed to destabilizing U.S. and Chinese interactions in the region. While China estimates a total of approximately 293 to 344 billion barrels of oil (BBL) and 30 to 72 trillion cubic meters (TCM) of natural gas, the U.S. only estimates 16 to 33 BBL and 7 to 14 TCM. Considering that the inflation-adjusted value of oil vacillated between approximately $50 and $100 per barrel (in 2017 prices) since the mid-1970s, U.S. estimates imply a hydrocarbon value in the South China Sea between $3 and $8 trillion, while Chinese estimates imply a value between $25 and $60 trillion. In addition to other factors, China’s greater dependence on oil imports and higher estimates of hydrocarbons in the South China Sea have driven it to invest more military resources in the region. An overly economistic approach by the Obama administration probably led the U.S. to allow China’s expansion in the South China Sea too easily.

Photo taken on June 13, 2015 shows the Xingwang deep-sea semi-submersible drilling platform at Liwan3-2 gasfield in the South China Sea. China’s largest offshore oil and gas producer CNOOC Ltd. announced on July 3, 2015 that its Xingwang deep-sea semi-submersible drilling platform started drilling at 1,300 meters underwater in Liwan 3-2 gas field in the South China Sea. Credit: Xinhua/Zhao Liang via Getty Images.

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China Swaggers, But Time Not On Its Side

Journal of Political Risk, Vol. 6, No. 1, January 2018

By Arthur Waldron

I have some thoughts about the “year of doom” 2018 that appeared on the web yesterday. They are as follows:

(1) China has undertaken her dangerous policies for internal reasons. That is how China is. She has no pressing or other need for Scarborough Shoal in the Philippines EEZ, for example.

(2) We know (1) is true because Xi Jin Ping goes on an on about loyalty, reshuffles the army, creates the most boring flag raising ceremony in history, and was reported to get in a fight with a general about whether the army should be made national instead of party. Who after all is going to take a bullet for Xi? We need to get to the root of this domestic phenomenon, but how is an almost impossible question.

(3) China’s tactics have sought to win without fighting by overawing small countries (and not-so-small countries, like India and Indonesia) using their awesome military as no more than a threat and their awesome economy likewise. The problems are (a) even the Philippines is not overawed and China is very much on the wrong side of international law and (b) this is important: China overestimates her own achievements. Maoism was a cesspool. She has gotten out rinsed off, and started some large but financially dodgy corporations. Skyscrapers have sprouted and tilted.

Group of People’s Liberation Army (PLA) soldiers in China. Credit: Getty Images.

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Protectionism Won’t Work: Four Alternatives to Canceling Trade Agreements

Journal of Political Risk, Vol. 5, No. 12, December 2017

By Bhakti Mirchandani

It’s time to create jobs for displaced manufacturing workers and bolster American competitiveness in four ways: (i) invest in growing fields and tradable economies that draw upon a region’s endemic old industrial skills; (ii) fight the opioid epidemic to avoid further declines in labor force participation; (iii) align universities and local manufacturers to ensure that workers are sufficiently skilled to participate in the local tradable economy; and (iv) encourage–and protect–R&D and entrepreneurship in manufacturing.

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China’s Strategic Pivot Towards the South Pacific Island Nation of Tonga

A Hybrid Intelligence Preparation of the Operational Environment (IPOE) Analytical Assessment

Journal of Political Risk, Vol. 5, No. 12, December 2017

By Mark Anthony Taylor

The aim of this research is to critically examine the refocusing of Chinese aid, economic involvement and diplomatic attentions towards the small South Pacific island nation of Tonga.  The research seeks a deeper understanding of China’s behaviour towards Tonga and promotes a reevaluation of how the US and its allies should respond to China’s strategic calculus. China’s actions in Tonga, although appearing benign, represent a cloaked threat to Tonga’s independence, democracy and U.S. regional aspirations.  Furthermore, owing to the comparative strength of the Chinese economic and diplomatic approach, a competitive soft-power response from the US may prove inadequate. In consequence, it may be more advantageous for the US to pursue a heightened hard-power response to ameliorate any potential threat. Through undertaking an analysis of China’s fundamental motivations for the soft-power Tongan pivot and an exploration of the modus operandi employed by China to affect its strategic goals, the project will endeavour to provide a clear answer to the following research question: “Is this Chinese pivot towards Tonga merely an example of cheque-book economic diplomacy, or does it entail a cloaked malignant threat to the security and autonomy of the US and its allies?” Utilising a hybrid adaption of the Intelligence Preparation of the Operational Environment (IPOE) analytic method[1], this project will apply a structured framework in order to probe and reconceptualise the Chinese pivot towards Tonga in an effort to unravel the underlying motivations of China. In line with this approach, the project will firstly scrutinize the situational variables resident in each nation that comprises the terrain of the issue. The significant and unique political, military, economic, social, infrastructure and informational system factors (PMESII) that contribute to the rapid intensification of China/Tongan relations will be explored. From this point, the focus will be turned towards an analysis of the usefulness of the two polar theoretical explanations (liberal and realist) for the current Chinese Course of Action (COA) in Tonga. Lastly, a detailed investigation of the two key Centres of Gravity (COG’s) that underpin and impact upon the China/Tonga relationship will ensue, exploring the cultivation of pro-China sentiment in Tonga and the degree of the US pivot to the South Pacific. The project will draw from a diverse variety of academic publications, expert opinion pieces and news media sources. The analysis reveals that the Chinese strategic pivot into the nation of Tonga superficially appeared to be motivated by benign economic opportunism. However, engagement with Tonga was found to hold a minimal benefit to China in terms of resource supply or economic gain. The major strategic benefits that were found to accrue to China were through the potential securing of Tonga for the establishment of a forward operating military base in the South Pacific. Consequently, China’s pivot may be motivated by concealed Chinese hegemonic designs (the realist perspective) rather than by benign economic opportunism (the liberal perspective). This motivation was found to pose a significant security threat to the US-lead regional order.  Two significant COG’s are bolstering the effectiveness of China’s Tongan pivot. Firstly, China has successfully executed a “hearts and minds” program to facilitate the broad interweaving of pro-China sentiment into the psyche of Tongan society. Secondly, the absence of US attention towards soft-power regional engagement with Tonga has aided China’s pivot. In terms of an effective US response to China’s strategy in Tonga, a revised US soft-power push was assessed as constituting an ineffective strategy due to the resilient China-Tonga relationship that now exists and because of China’s deep aid pockets. Consequently, the evidence points towards the need for a revitalised US hard-power military presence in the region as the most viable option for dampening China’s future militaristic ambitions towards Tonga.

One pa’anga and two pa’anga banknote.
Tonga, Pacific. Credit: Getty Images.

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Invite Taiwan Navy To RIMPAC Exercise In Hawaii

Journal of Political Risk, Vol. 5, No. 7, July 2017

By Anders Corr

In 1971, the U.S. started holding international naval exercises in Hawaii, and called them RIMPAC (Rim of the Pacific). We invited our closest allies to participate. Now, the U.S. Navy is inviting not only allies, but Russia and China as well. Since a brief thaw in the 1990s, Russia and China are increasingly acting as adversaries rather than responsible international partners to the U.S. Most recently, China seems to have helped rather than stopped North Korea’s nuclear ambitions. It is time to invite Taiwan, not China, to RIMPAC.

Aerial view of a navy fleet with five Chinese navy warships and two America navy warships which head to Hawaii for the 2016 Pacific Rim (RIMPAC) on June 25, 2016 in the western Pacific Ocean. A Chinese navy fleet, including five ships (the missile destroyer Xi’an, the missile frigate Hengshui, the supply ship Gaoyouhu, the hospital ship Peace Ark, the submarine rescue vessel Changdao), three helicopters, a marine squad and a diving squad with 1,200 officers and soldiers, set sail from Zhoushan to Hawaii to join the RIMPAC 2016 on June 15. It is the second time that Chinese navy has participated in RIMPAC, a multilateral naval exercises led by the USA and held every two years. (Photo by VCG)

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Nuclear Deterrence and Four Types of Force: Definitive, Coercive, Catalytic, and Expressive

Journal of Political Risk, Vol. 5, No. 6, June 2017

By Captain Robert C. Rubel USN (Ret)

North Korea’s drive to attain a nuclear warfare capability is currently on the front burner in the Pentagon, and is a driver of tensions in East Asia. This has precipitated plenty of dialogue in the national security community, including on the issue of extended deterrence, the policy of the US that threatens nuclear response if an ally is attacked with nuclear weapons. One input from a former colleague at the Naval War College was the final catalyst that got me tapping on the keys. First, he quoted one of his scholars as saying that the real question concerning nuclear weapons “… is whether strategic nuclear forces have any genuine relevance today in the context of deterrence and warfighting, or whether they’re troublesome legacy weapons of a bygone era.” In a subsequent email he said that he was “interested in deterrence stopping all wars, not just nuclear.” It may be that the general umbrella of nuclear deterrence did suppress some wars that might have otherwise taken place during the decades after 1945, but it is almost impossible to know. However, my colleague’s faith in the utility of the manifold uses of deterrence is not that distant from those who advocate tailored deterrence, which is a scaled or graduated deterrence structure that includes the option of preemptive strikes.[1] Tailored deterrence to some extent reflects the logic behind the DoD concept of flexible deterrent options (FDO), which are defined as “…a wide range of interrelated responses that begin with deterrent oriented actions carefully tailored to produce a desired effect.”[2] In my view, such policies would incur considerable risk, as they ascribe, in an a priori manner, effects on an opponent’s political decision making and strategic planning processes in lieu of any specific intelligence (frequently) and certainly without any historical track record, especially in the nuclear arena. In this short article I will discuss a different way to analyze deterrence and gain insight into the thought processes of my colleague.

File photo taken in October 2015 in Pyongyang is of a North Korean intermediate-range ballistic missile on display during a military parade. Photo by Kyodo News via Getty Images

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Iran’s New Generation of Oil and Gas Contracts: Historical Mistrust and the Need for Foreign Investment

Iran Qatar Gas

In this Monday, July 19, 2010 file photo, portraits of the late Iranian revolutionary founder Ayatollah Khomeini, right, and supreme leader Ayatollah Ali Khamenei adorn a construction site which is part of the South Pars gas field, on the northern coast of the Persian Gulf in Assalouyeh, Iran. Iran’s President Hassan Rouhani said his country intends to increase production from a giant joint gas field shared with neighboring Qatar, state TV reported on Sunday, Dec. 1, 2013. The report quoted Rouhani as saying Iran that intends to match Qatar’s production by 2017. (AP Photo/Vahid Salemi, File)

Originally published in Journal of Political Risk, Vol. 3, No. 4, April 2015.

Revised version published in Journal of Political Risk, Vol. 4, No. 2, February 2016.

By Reza Yeganehshakib, Ph.D.

Reza Yeganehshakib  holds a Ph.D. in history with a specialization in World and Middle Eastern history at the University of California, Irvine (UCI). He received a B.S. degree in Chemical Engineering from Iran Azad University, and an M.A. in history from UCI, where he serves as a Research Associate at the Samuel Jordan Center for Persian Studies. Dr. Yeganehshakib is a member of the Middle East Studies Association and the International Society for Iranian Studies. He is affiliated with the Persian Language Institute at California State University, Fullerton and was previously affiliated with the National Iranian Oil Company.

Abstract

After nationalizing the oil industry in Iran in 1951, the government passed protectionist laws that restrained foreign ownership of Iran’s oil fields and industries. Since the Islamic Revolution in 1979, these laws have been reinforced to further reflect the anti-Western ideological underpinnings of the revolution. Yet, after the Iran-Iraq War and the beginning of the era of so-called “reconstruction” in 1988, the Iranian government adopted several laws to encourage foreign investment, particularly in the country’s largest industry, oil and gas. These laws, chiefly the Foreign Investment Promotion and Protection Act (FIPPA), despite having been revised several times, have not been successful in encouraging foreign companies to invest in Iran’s oil and gas industries. As a result, the government of the Islamic Republic of Iran recently announced that it would issue a new generation of oil and gas contracts, Iran Petroleum Contracts (IPC) that are more attractive to foreign investors. This paper investigates possible challenges that Iran’s protectionist laws may pose for these contracts, especially in light of Iran’s prevailing political and religious anti-West/anti-imperialist ideology and Iran’s distrust towards the West after the fall of Mossadegh’s government in 1953. It also studies Iran’s political and legal realities and whether they might provide foreign investors with attractive incentives, such as partial or conditional ownership of the industries, for investment.

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