Thursday, May 22, 2014

United States in an 'Eurasia' pickle

Current US China policy seems to be "Who Needs Russia? We've got ... The Philippines!"

Unless President Barack Obama has absolute faith in the ability of the United States and the Asian democracies to restrain China, there would seem to be some disturbing developments for the US in Asia.

First of all, the People's Republic of China parked its HYSY 981 oil rig in waters that Vietnam claims as its exclusive economic zone, triggering a heated response from Vietnam, anguished writhing from the Association of Southeast Asian Nations, and a stern "don't engage in provocations" finger-wag from the United States.

The PRC, however, is not yielding, implicitly highlighting the fact that the United States is failing in its self-proclaimed mission to assure peace and prosperity in the South China Sea (as I pointed out in a previous piece, the PRC's oil-rig shenanigans accentuate the essential sovereignty/EEZ character of disputes between China and its South China Sea neighbors, and undercut the "freedom of navigation" hobbyhorse that the US has crafted to ride to the rescue of the SCS).

Although VOA reported it as "US Navy 'Shaping Events' in South China Sea", Chief of Naval Operations Admiral Jonathan Greenert acknowledged that the US has its work cut out for it in the SCS:

We are starting to shape events. We have got to manage our way through this, in my opinion, through this East China Sea and South China Sea [tensions]. We're not leaving. They know that. They would be the leadership of the Chinese navy. We believe that we have to manage our way through this.

Also, this week also witnessed a slobbery authoritarian love-fest between Vladimir Putin and Xi Jinping at a confab in Shanghai, also attended by Iran and a bunch of stans, illustrating the completely predictable dynamic of the Western hardline on Ukraine driving Russia and its gas into the arms of the PRC.

As of this writing the gas deal has not gotten done, apparently because of a disagreement over the unit price, and because the PRC is jibbing at the Russian demand for a $25 billion prepayment - a prepayment that, I might add, will relieve Gazprom of the financial embarrassment incurred by shipping Ukraine a few billion dollars of gas that hasn't been paid for, provide a nice receivable (if not immediate cash cushion) for Russia as it haggles with Ukraine (and a rather anxious Europe) re the next round of gas shipments to the West, and establish a precedent for demanding prepayment for Ukraine.

If the gas deal doesn't go down, the US foreign policy commentariat in general and the Obama administration in particular will breathe a quiet sigh of relief that the dreaded Eurasian alliance of ex-commies and pseudo-commies in Russia and China has failed to occur.

If the gas deal gets done, especially on the basis of a rouble/yuan settlement that sidelines the US dollar, on the other hand, the manure should hit the fan.

Right now, the Western response to these Asian developments has been pretty muted, a sign, I think that the foreign policy consultant/think tank/media complex has not received any useful guidance from the Obama administration.

My personal feeling is that the United States is loath to acknowledge the Eurasian "ghost at the banquet" and is declining to escalate openly at the current awkward juncture. Instead, the Obama administration is quietly rolling out a sequence of passive-aggressive reproofs to the PRC.

Last week the USN Blue Ridge just happened to cruise past the Scarborough Shoal.

This week, the Justice Department indicted five PLA officers for hacking US corporations.

This sort of thing was always in the cards. Starting in 2011, the Obama administration had been methodically rolling out the PRC cyber-bad-guy product for over a year, to be capped by a formal direct confrontation with Xi Jinping by Barack Obama at Sunnylands in June 2013 concerning Chinese cybersins, followed by some public naming and shaming, but then Boom! Snowden! Doh!

The Snowden thing seems to have derailed the campaign for a year or so - most of the hacking allegations in the Department of Justice indictment date to 2012 or before, an indication that the United States is belatedly working off its depreciated pre-Snowden inventory of PRC misbehavior.

In rolling out the indictments yesterday, Attorney General Eric Holder was obliged to abandon the pre-Snowden framing - that PRC hacking was a Defcon 1 threat both to the US economy and the global Internet commons - in favor of condemning the PRC hackers for the one kind of hacking that the United States government still asserts it does not do ... corporate spying ... for corporate advantage.

In context, I should point out that the United States has an unequivocal agenda of espionage on economic matters pertaining to energy, since energy is a matter of "national security". As to whether the information on potentially unfavorable developments in oil, gas, and uranium is simply put into a dossier for President Obama to wring his hands over, or whether actionable intelligence somehow makes it to pro-Western energy giants, is something that I and the reader can currently only speculate about.

However, it will be interesting if Glenn Greenwald, the journalist who made public the Snowden/NSA secrets files, comes up with any blockbuster revelations concerning Brazil, its over the top anxiety concerning the security and secrecy of the bidding process for its massive "deep salt" offshore oil blocs (first award included Total and two PRC companies), Brazil's stated desire to disconnect from the US Internet, and any US NSA/CIA hijinks.

Also, I might point out that, in the founding document of the pivot, "America's Pacific Century" secretary of state Hillary Clinton defined US "economic security" as "national security", which would conceivably place a broader range of corporate information into the purview of the CIA and NSA.

A look at the hacking indictment seems to indicate that the US wanted to make sure its threat to prosecute looked credible, and not be hamstrung by US corporations' unwillingness to air matters pertaining to vital proprietary knowledge or the loss thereof in open court.

Many of the hacking infractions pertained to US firms that were involved in various trade disputes with the PRC on issues like solar panels, steel, and whatnot and already involved extensive declarations of fact before the World Trade Organization.

The US grand jury returned the sealed indictment on May 1 and the Department of Justice exercised its discretionary powers to unseal the indictment on May 29; in other words, the timing was a matter of choice by the Obama administration. I suspect it was a squib fired across the PRC's bow in response to the PRC's defiance in the SCS and its romance with Russia.

The PRC has responded with spluttering denials, suspension of a working group on cybersecurity, and threats of a chill in military-to-military ties.

The Obama administration's move doesn't seem to have much of an upside; it scotched the joint US-PRC work on ground rules in cyberwarfare, something that I think is of genuine interest to the Pentagon if not the keyboard commandoes of the national security apparatus; it also threatens to hurt military-to-military exchanges, again a priority for the military, which cherishes interactions with opposing commanders it may be called upon to confront or fight; and it provides very little consolation for US high-tech businesses like Cisco, which are reeling from the public revelation of their intimate games of footsie with the NSA.

Needless to say, the indictment also did nothing to advance what should be the sin qua non of superpower geopolitics: trying to drive a wedge between the PRC and Russia by highlighting differences in treatment. But instead of stroking Xi Jinping, we gave him a whack on the snout at the same time we're pummeling Putin.

That is, it would seem, rather stupid, since Russia is wary of PRC economic dominance, especially in the Siberian east, fears the demographic onslaught of the "Yellow Horde", and is not an automatic and natural ally of China.

Nevertheless, "Eurasia" is now becoming a thing, and that's not very good news for the pivot to Asia. The pallid multilateralism of the pivot, I must confess, does not compare favorably to the muscular posturing of red strongmen that makes the hearts of neo-nationalists, particularly in Russia, go pitty-pat.

The premise of the pivot - that an ostensible united front of the US and Asian democracies will impel the PRC to modify its behavior to adhere to desired Western norms - is taking a hit along with the optics.

As the relative weight of the US and Europe in the world economy diminish, US sanctions encourage disintermediation of the US financial system in the world economy, the US pursues an ineffectual but polarizing all-stick/zero-carrot confrontation with Russia at the very time it is seeking to isolate the PRC diplomatically, and "Eurasia" looks more viable, the PRC's willingness to bear the cost of defying US soft power increases.

Don't get me wrong. PRC aggressiveness in the South China Sea is real. Problem is, the US will to confront the PRC in the SCS is not. The Rube Goldberg structure of the pivot announces that fact instead of hiding it. For those unfamiliar with Goldberg's work, he was noted for creating cartoons of gadgets that carried out simple functions in convoluted ways.

As the deterrent effect of US soft power in Asia dwindles, the US must decide whether to force developments in Asia into the sphere in which it still exercises unquestioned dominance - the hard power of military action - or resign itself to an ineluctable erosion of US prestige and influence in the region and a retreat to bilateral horsetrading with the unpalatable "Eurasian" powers.

It will also be interesting to see if America recognizes that it has a choice, albeit from an unattractive menu of options. But if the Western spin of the Ukraine crisis is any guide, the US will console itself with the fantasy that it is merely reacting passively to aggression, the pivot was forced on it, and the PRC can be blamed for the unwise choices that Washington made.

The US is not in the business of acknowledging it made bad foreign policy, even though it has made spectacularly bad foreign policy during the Obama as well as the George W Bush administrations. The usual temptation is to blame incapable proxies and venal antagonists for crises exacerbated by the United States.

For a useful illustration, I direct readers to the case of Libya, where the US and NATO destroyed the governing authority, handed the reins over to groups totally incapable of exercising power, and are now apparently backing a coup by an ineffectual strongman who just might make things right; the cavalcade of bloody disaster that is US policy in Syria; the botch in Ukraine; and, for that matter, the massacre and misery of Iraq. And I almost forgot the disaster that the US-midwifed regime of South Sudan has become. And how about Yemen?

Either the US is a rather maladroit practitioner of foreign policy, or failure is displaying an inexplicable bias for dogging American actions.

For a classic specimen of US bewilderment at the pickle it's in, I direct you to "China's Grand Strategy Disaster" by Brad Glosserman of the Center for Strategic and International Studies. He is genuinely gobsmacked that the PRC cannot perceive the subtle genius of the pivot, which is so evident from the privileged perspective of the Washington Beltway. Must be collective terror and/or insanity in the PRC ruling elite:

Why, then, does China stick to this course? Either no one in the upper echelons of the Chinese leadership sees the big picture - which is a very disturbing scenario - or no one in that leadership is prepared to question the wisdom of current policies, because the price of dissent is potentially too high. If true, that should be extremely worrying. That logic implies the momentum of current decisions cannot be diverted and confrontation, if not clashes, will follow.

There is only one convincing explanation for Chinese behavior: Beijing is trying to harvest a new source of energy to fuel its economy - capturing the power generated by Deng Xiaoping as he spins in his grave.

You know, I'm not sure a diagnosis of collective insanity in Zhongnanhai is really going to reassure President Obama that the pivot to Asia is the magic elixir for America's "Pacific Century".

There is, of course, another convincing explanation: that the PRC thinks it has enough regional clout to avoid catastrophic long-term consequences from the transitory distaste of its neighbors and US for its policies, just as the United States feels it can shove its Ukraine policy down the throats of Germany and the EU.

For the US in Asia, I predict a choice off the confrontation/accommodation menu of "both and neither", escalating but indecisive sanctions and military posturing, a mish-mash of soft power and hard-power antagonism, ie an era of ugly and counterproductive muddling. Maybe that's the best we can hope for.

Peter Lee writes on East and South Asian affairs and their intersection with US foreign policy. This article was originally published on ChinaMatters.

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