Economist: editorial sobre o acordo comercial EUA-China

Between the lines America and China sign a trade deal

But it will be an uneasy truce

The Economist, Jan 16th 2020

SHANGHAI AND WASHINGTON, DC

WITH HIS habit of announcing trade deals only for them to dissolve within weeks, President Donald Trump is a standing reminder that talk is cheap. But on January 15th he signed a phase one trade agreement with China alongside Liu He, the Chinese vice-premier, and published its contents for the world to see. The 86 pages set out the terms of a new economic relationship between these two giants. Alongside some welcome measures, there are some howlers—and glaring omissions.

Throughout the whole, however, runs a common pattern. Clauses that are in reality concessions wrung from the Chinese are often written in such a way that they formally apply to both sides—but with subclauses specifying the actions that the Chinese are to take. For example, pledges to protect trade secrets are accompanied by new processes by which American companies can complain about breaches.

The deal also addresses several long-standing American complaints about China’s foot-dragging. China pledged that approvals of agricultural biotechnology products will take less than two years. The deal sets deadlines for China to consider licence applications by MasterCard and Visa. And China will lower bureaucratic barriers to imports of American dairy, pork and beef.

As many a weary trade negotiator can attest, China has a history of reneging on promises. But this deal comes with a novel dispute-settlement mechanism. After a speedy consultation, either party may find fault with the other. (History suggests that the Americans are more likely to feel aggrieved.) If a solution cannot be reached, the accuser can unilaterally impose penalties. The accused cannot retaliate, short of pulling out of the deal altogether.

It is possible that this mechanism will force China to address American grievances. But it may also cause new problems. It hands huge discretion to Robert Lighthizer, the United States Trade Representative (USTR). Take China’s ever-contentious yuan regime. On January 13th, in a sign of thawing relations, the American Treasury removed China from its list of currency manipulators. But if at some point China is put back on the list, the USTR would now seem to have virtually unchecked power to slap tariffs on it.

Further problems may be caused by China’s pledge to buy an extra $200bn of American goods and services over the next two years, on top of a baseline of $187bn in purchases in 2017. That is intended to satisfy Mr Trump’s main desire: to close America’s trade deficit with China. But making it happen will probably require China’s government to direct Chinese companies to buy lots of American goods. Both countries will become more reliant on each other, which neither wants. And their other trading partners might be squeezed out.

The Americans do not seem overly concerned. Mr Lighthizer is keen to move on to implementation, saying that, as the first deal of its kind, “we have to make sure that it works”. The coming months will demonstrate whether the two countries can establish a friendlier dialogue, and whether their relationship can survive America’s more aggressive use of security-related export and investment restrictions.

The deal is far from a reset. As Mr Lighthizer noted, China’s cyber-intrusions and industrial subsidies still rankle with America. Chinese media, meanwhile, laid out an argument that may become more familiar: if American export restrictions prevent China from fulfilling its purchase commitments, the fault will lie with America.

A truly grand pact between the two countries is some way off—and indeed, may never arrive. But this modest trade agreement shows how much the status quo has changed. Tariffs on hundreds of billions of dollars’ worth of imports into both countries remain in place, with an ever-present threat of more. This is not trade peace, but rather a trade truce—and a tense one at that. ■

This article appeared in the Finance and economics section of the print edition under the headline "America and China sign a trade deal"

Papa Francisco: uma boa alma reformista, mas economicamente equivocado - Academia Liberdade Econômica

Consumismo no capitalismo

David Gordon

Academia Liberdade Econômica, 17/01/2020

https://aleconomico.org.br/consumismo-no-capitalismo/

O Papa Francisco e Ludwig von Mises não têm a mesma opinião sobre a importância da escolha do consumidor. O papa condena o que Mises defende, e sua discordância vai além do óbvio.

Como todos sabem, o papa condena o que ele chama de “consumismo”. Em um discurso proferido em 2015, por exemplo, ele disse:

Hoje, o consumismo determina o que é importante. Consumir relacionamentos, consumir amizades, consumir religiões, consumir, consumir… Não importam o custo ou as consequências. Um consumo que não favorece o vínculo, um consumo que tem pouco a ver com as relações humanas. Laços sociais são um mero ‘meio’ para a satisfação de ‘minhas necessidades’. O importante não é mais o nosso vizinho, com seu rosto familiar, sua história e sua personalidade.

As pessoas gastam demais em bens materiais, ele alegou, e ignoram o que realmente importa na vida. Por que gastar dinheiro com acessórios inúteis, como bichos de estimação e cosméticos?

Mises, é claro, não conhecia o Papa Francisco, mas há muito tempo ele respondeu àqueles que levantam esse tipo de queixa contra o capitalismo de livre mercado. O capitalismo, ele apontou, é um sistema de produção em massa para as massas. Dá às pessoas o que elas querem, desde que o que elas queiram possa ser produzido de forma lucrativa. Se você não gosta do que as pessoas querem, não culpe o capitalismo. Como se tivesse lido as declarações do papa, ele afirma em “A mentalidade anticapitalista”:

No entanto, muitas pessoas, especialmente intelectuais, apaixonadamente detestam o capitalismo. Na visão deles, esse modo medonho de organização econômica da sociedade não trouxe nada além de danos e miséria. Os homens eram felizes e prósperos nos bons e velhos tempos que precederam a ‘Revolução Industrial’. Agora, sob o capitalismo, a imensa maioria é de um povo faminto, impiedosamente explorado por individualistas austeros. Para esses canalhas, nada conta além de seus interesses monetários. Eles não produzem coisas boas e realmente úteis, mas apenas o que trará os maiores lucros. Eles envenenam corpos com bebidas alcoólicas e tabaco, e almas e mentes com tabloides, livros lascivos e filmes idiotas.

Mises responde que o capitalismo é um sistema de produção em massa para as massas. Dá às pessoas o que elas querem, desde que seja lucrativo fazê-lo.

O traço característico do capitalismo moderno é a produção em massa de bens destinados ao consumo pelas massas. (…) No mercado de uma sociedade capitalista, o homem comum é o consumidor soberano cuja compra ou abstenção de compra determina, em última análise, o que deve ser produzido e em que quantidade e qualidade.

É exatamente nesse ponto que a oposição entre Mises e o Papa Francisco se aprofunda. Se o papa leu Mises, eu não sei, mas ele está familiarizado com o argumento de Mises. Sua resposta é que, mesmo que o capitalismo dê às pessoas o que elas querem, ele ainda é deficiente. O que Mises considera uma virtude do capitalismo é, de fato, um vício. O papa diz:

O resultado é uma cultura que descarta tudo aquilo que já não é mais ‘útil’ ou ‘satisfatório’ para os gostos do consumidor. Transformamos nossa sociedade em uma enorme vitrine multicultural ligada apenas aos gostos de certos ‘consumidores’.

Em resumo, é errado dar aos consumidores o que eles querem, se eles quiserem as coisas erradas. Para responder ao papa, precisamos abordar dois pontos. Primeiro, mesmo que as pessoas escolham mal, elas não estão agindo dentro de seus direitos? Coagi-los a um estilo de vida mais simples e menos materialista seria interferir em sua liberdade de gastar seu dinheiro como quiserem.

É claro que o papa poderia responder e, sem dúvida o faria, negando que as pessoas tenham sólidos direitos de propriedade. Em vez disso, os gastos nos quais elas têm permissão para incorrer devem ser guiados pelo “bem comum”.

Aqui, porém, o papa precisaria enfrentar outro problema ao qual Mises chamou a atenção. Depois de citar vários teólogos com visões do capitalismo como a do Papa Francisco, Mises apontou:

Eles falham em não reconhecer o caráter especulativo inerente a todas as empreitadas para atender futuros desejos ou satisfação; ou seja, em toda ação humana. Ingenuamente, presumem que não há qualquer dúvida sobre as medidas a serem tomadas para a melhor provisão possível dos consumidores. (…) Os defensores de uma economia planejada nunca conceberam que a tarefa é atender desejos futuros que podem ser diferentes dos desejos atuais, e empregar os vários fatores de produção disponíveis da maneira mais conveniente para a melhor satisfação possível desses incertos desejos futuros. – Human Action, Scholars Edition, pág 672 da edição em inglês

Em resumo, o papa teria que resolver o problema do cálculo socialista.

O argumento que acabamos de apresentar é que, mesmo que o papa tenha razão em criticar o consumismo, ele erra em não indicar um sistema alternativo viável. Pode-se, no entanto, criticar mais diretamente o argumento do papa. É verdadeiramente ruim para as pessoas gastar grandes somas de dinheiro em bens de consumo? Lew Rockwell argumentou muito bem que não é.

Claro, é fácil olhar para tudo isso e gritar: consumismo atroz! (…) Talvez você pense que a qualidade de vida não é grande coisa. Será que realmente importa se as pessoas têm acesso a grandes supermercados, drogarias, casas com mais de um cômodo e tecnologia? (…) Considere a expectativa de vida na era do consumismo. As mulheres em 1900 geralmente morriam aos 48 anos, e os homens aos 46. Hoje? As mulheres vivem até 80 e os homens, 77. Isso se deve à melhor alimentação, empregos menos perigosos, melhor saneamento e higiene, melhor acesso aos cuidados de saúde e a toda a gama de fatores que contribuem para o que chamamos de nosso padrão de vida. Somente desde 1950, a taxa de mortalidade infantil caiu 77%. Como resultado, a população está aumentando exponencialmente.

É fácil olhar para esses números e sugerir que poderíamos ter conseguido a mesma coisa com um planejamento central para a saúde, evitando todo esse consumismo repugnante que veio junto. Mas tal planejamento central foi tentado em países socialistas, e seus resultados mostraram exatamente o contrário nas estatísticas de mortalidade. Enquanto os soviéticos lamentavam nossa persistente pobreza em meio ao consumismo desenfreado, nossa pobreza estava sendo reduzida e nossa longevidade aumentava, em grande parte por causa do consumismo pelo qual estávamos sendo criticados.

capitalismo

China challenge to the US: Belfer Center prized papers

Como referido nesta postagem, 
EUA continuam a ver a China como adversária - Council on Foreign Relations
o Belfer organizou uma espécie de concurso para selecionar as melhores "grandes estratégias", para confrontar o "desafio da China".
Eis as respostas premiadas.
Paulo Roberto de Almeida

Winners Announced: Meeting the China Challenge

Graham Allison

 |

Belfer Center, Harvard University, January 2020

Since sending his book, Destined for War: Can America and China Escape Thucydides’s Trap?, to the publisher three years ago, Harvard Kennedy School Professor Graham Allison has been searching for ways to escape the dangerous dynamic that could lead Washington and Beijing to stumble into a catastrophic conflict neither side wants. Convinced that there is no monopoly of strategic wisdom on either side of the Pacific, Professor Allison decided to take a classroom assignment on crafting a grand strategy to meet the China challenge and open it to the public as a case competition. His office received dozens of valuable submissions from across the world.

The winner of the competition was Robin Nataf.

Allison also recognized three additional entrants for honorable mention: Kazumi Hoshino-MacDonald, Patrick Kolesiak, and Jessica Robyn Jordan.

“Each of their strategic options memos offer clues policymakers in Washington may find useful,” said Allison. 

Congratulations to the winners, and thanks to all who took the time to craft and deliver a thoughtful entry.

Read all four distinguished submissions below:

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Winner | Robin Nataf

To: Secretary Pompeo
From: Robin Nataf
Date: 23 November 2019
Re: US grand strategy for meeting the China challenge  

Issue: US grand strategy for meeting the China challenge

Strategic Analysis: China’s rise threatens a century of U.S. hegemony. In 30 years, China lifted a billion people out of poverty, and its GDP overtook the U.S.’s. Xi Jinping – a leader more ambitious and with a tighter grip over state and party than any other since Mao, views this with a long-term lens as a return to greatness after a ‘century of humiliation’. His ambition to assert Chinese power has a conceptual and ideological basis, and will aim to reshape the international system across political, military and economic dimensions. This challenges to core U.S. beliefs and views creates a high risk of violent confrontation in line with Thucydides’ Trap. Given China’s military capacity, MAD would make a war catastrophic – likely destructive for the U.S. as we know it. Unlike in the Cold War, China already has a larger GDP than the U.S. and is deeply integrated in the global economy, making the ‘Cold War II’ analogy of limited relevance. Its success blending of market capitalism with political authoritarianism (despite assumptions behind the West’s strategy of engagement) calls for a fundamental shift in U.S. approach to avoid war. China’s rise will not be ‘solved’, but its implications on world affairs and U.S. interests can be ‘managed’ over the next generation.

Relevant National Interests: Vital: (1) prevent war with China; (2) maintain the viability of global markets. Extremely important: (3) ensure continued cooperation of Asian allies; (4) maintain lead in key military-related technologies. Important: (5) discourage human rights violations and promote U.S. values in Asia and beyond.

Options: 1 – Cold War II: Isolate China and stifle its growth and influence as much as possible without violence. Aim at best for regime collapse, and at least for reduced ability to shape global affairs, leaving China either with new leadership or isolated in 10 years. Create an Asian ‘NATO’, further restrict U.S. (and allies’) economic cooperation with China (reduce trade, foreign investment, private sector work), fund a BRI alternative, limit Chinese appointments in IGOs. Pros: Could preserve U.S. hegemony. Cons: Unlikely to succeed due to regime resilience and other countries’ incentives; high risk of war (success could leave China few alternatives); highly costly. 2 – Rivalry partners: Simultaneously compete and cooperate with China. Aim to gradually anchor it towards U.S. preferences while mitigating its ability to re-shape the international system, leaving China’s worldview aligned with the U.S.’s in 10 years. Create an Asian OSCE, launch joint initiatives (on terrorism, development, climate change), work towards new WTO norms, boost investment and restrict cooperation on strategic sectors (AI, cyber), re-launch TPP, invest domestically on education, infrastructure, etc. Pros: Promotes shared interests (reducing chances of war); preserves U.S. interests. Cons: difficult to balance (especially with allies); may fail to prevent shifts in international order. 3 – A new bipolar order: Recognize the inevitability of China’s ascendency. Aim for a new global order based on compromise which preserves U.S. soft power), leading to a bipolar but stable world in 10 years. Remove U.S. assets in East Asia, negotiate bilateral treaty (spheres of influence, norms for conflict resolution, IGO reforms), stress socio-economic over political rights, invest in domestic competitiveness. Pros: low risk of war (China gets what it wants); U.S. ‘model’ can prevail long-term with soft power. Cons: East Asian allies are dropped; human rights/liberalism recede; U.S. hegemony abandoned.

Recommendation: Option 2, with a gradual expansion of areas of cooperation.

Implementation: Immediately end bullish rhetoric, seek rapid opportunities for joint initiatives (rejoin Paris climate agreement), gradually build support to reduce hawkish views in Congress.

Talking points:

• Thanks to previous Administrations’ failed policies, China has benefited from the global economy and been able to strengthen its authoritarian capitalist model. We now need to accept the reality of China’s economic growth – the world is no longer unipolar, and the American century has ended.
• This does not mean that we will accept China’s ideology and worldview. America remains committed to democratic, liberal values, and to defending its interests vigorously in the global economic arena. We stand by our allies in East Asia, we stand by the need for trade reforms.
• That said, we need to find a way to peacefully coexist with China. History shows us that if we compete too aggressively, the risks of a violent confrontation are real. And a war with China would be dramatic – it would amount to the destruction of both of our nations as we know them, and hundreds of millions of deaths. We need to find ways to work with China to better understand each other, and avoid such a catastrophic scenario. We need to work with China to confront global challenges like climate change or terrorism.
• At the end of the day, we are confident in the attractiveness and the value of America’s liberal democracy. We have learnt that the best way to spread these values is to shine by example, and so we will invest domestically to ensure our education systems, our infrastructure and our technological capacities remain the best in the world. That way, we will show the world – and China – what America can achieve when it sets its heart to it, and other countries will be able to decide what model they want to adopt.

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Honorable Mention: Kazumi Hoshino-Macdonald

Issue: The impact of China’s rise challenges US interests across all aspects of its post-WWII international order—risking militarized conflict.

Analysis: Since China’s Cold War pivot and entry to the WTO, the US policy of engagement has ostensibly failed to turn China into a “responsible stakeholder.” China’s growth (which surpassed the US in 2014, in GDP PPP) is increasingly being translated into military modernization and expansion under President Xi’s plan for the Great Rejuvenation of the Chinese nation—aimed to develop China into a techno-economic and military pier by 2049.

Relevant National Interests 

Primary Interests: 

• Prevent any conflict between US and China resulting in a non-limited conventional or non-conventional altercation.
• Maintain US primacy through global reserve currency, tech leadership, and international military presence.
• Ensure the security of our regional treaty allies.

Secondary Interests: 

• Prevent third-party states inducing a conflict (e.g. Korean peninsula, South/East China Sea, and Taiwan Strait.)
• Freedom of navigation within the Indo-Pacific.

Tertiary Interests: 

• Promote the rule of law, free markets, and democracy in Asia.
• Prevent a strategic Russia-China axis.

Strategic Options 

I. Cold War 2.0 

A neo-containment strategy of détente through economic bifurcation could feasibly blunt China’s rise. A multi-pronged pressure campaign including FIRRMA (CFIUS reform) and ECRA could stem IPO theft, and tariffs could apply pressure to CCP. This would be most effective if done in concert with our European, Japanese, and other Asian allies.

Pros:

• Short-term fait accompli in economic destabilization.
• Longer-term development capacity hindrance.
• A multi-country bipolarity balance may be achieved, though at a low probability.

Cons:

• Cold War diagnosis inaccurate: no nuclear brinksmanship, USSR never reached 60% of US GDP, was not economically interdependent, and was ideologically rigid.
• Détente could mean sacrificing a regional sphere of influence.
• Losing cooperation on climate change, nuclear proliferation, terrorism, pandemics, and benefits from interdependent trade.
• Increased probability of miscommunication and misperception in crisis scenarios.
• Losing Chinese immigrant talent pool with a new “Red Scare.”

II. Rivalry Partners 

A steady state of competition and cooperation strategy through rivalry partnership could engage China on an issue to issue basis, while playing to US strengths. This should be executed under the auspices of a unique Strategic Sino-US NSC body. Two policy examples could include:

• Renegotiate and rejoin CPTPP, making trade benefits commensurate with higher enforceable standards that meets the administration’s needs.
• Counter A2AD, by providing regional allies and partners with long range autonomous vehicles, weaponry, and advanced anti-missile systems.

Pros:

• Maintains diplomatic channels, but increases credible deterrence in a crisis scenario.
• Offers economic diversification options (e.g. ASEAN).
• Fewer of the Cold War 2.0 cons.

Cons:

• Slower to blunt China’s economic gains.
• Higher chances of coordination failure.
• Does not offer an final end-state for US-China relations beyond steady state competition.

III. Democratic League Strategy 

Revamp US leadership to counter China by forming a rule-of-law based bloc with advanced-democracies that offers quid pro quo tiered benefits to third party countries in trade, investment, R&D, and security; for commensurate, verifiable, and enforceable reforms in those same spheres. For example, India as a third party could offer:

• Strategic position in the Indo-Pacific.
• Low cost of labor and a growing middle class.
• Expanded Quadrilateal Security Dialogue.

Pros:

• Not mutually exclusive to Option II.
• Offers an alternative that amplifies US clout and alliances.
• Plays to US strengths such as the rule of law, that have a proven track record in spurring development (e.g. Asian Tiger economies).

Cons:

• Requires high degree of buy-in from partners.
• Slow on immediate economic and security concerns.
• Requires domestic US appetite for international multilateralism.

Recommendation: As Option III requires a larger domestic appetite for US interventionism, I would advise the implementation of option II.

Implementation: Execution of this strategy could include—but is not limited to—the two policy options already detailed supra; but with a longer term aim towards implementing option III if domestic sentiment changes.

Press Bullets 

• Our strategy is one of countering China’s regional aggressions, by consolidating our deterrence capacity with regional allies across all domains.
• “Ending the forever wars” and refocusing our efforts on the most economic dynamic region of the 21st century, where middle classes are growing and America can benefit from a deeper economic and strategic presence.

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Honorable Mention: Patrick Kolesiak

Issue: Provide grand strategy options regarding China’s expanding global influence.

Analysis: China has used all its instruments of power to undermine US dominance in the current world order, with efforts accelerating since the 2009 economic crisis. China’s growth into the world’s largest economy has led to significant financial influence with countries through the Pacific, Asia and Africa. China seeks to further its economic growth while combatting international criticism for humanitarian rights abuses. China has rapidly militarized behind its economic expansion, especially within the 9-Dash Line in the South and East China Seas.

Relevant National Interests: Vital: (1) Prevent war with China which could escalate into nuclear war; (2) thwart hostile action by China against key US allies; (3) maintain stability/rule-of-law in vital global systems (trade, &c.); and (4) ensure safe freedom of navigation for global commerce. Extremely Important: (1) maintain an advantage in military and other strategic technologies; and (2) counter China’s hegemonic influence in the Pacific and Asia.

Options: Option 1: (Cold War 2.0): Four pillars: (1) Speed decoupling of US economic/business interests in China. (2) Increase coalition military programs/strategies to counter Chinese anti-access/area denial (A2/AD) abilities and modernize the nuclear force. (3) Increase public diplomacy to degrade internal/external support of China’s governing elite. (4) Ally and build economic/military partnerships with ASEAN nations and regional/IGOs. Pros: Does not require Chinese consent to implement; draws clear lines for cabinet-level strategy development. Cons: Complicates mutual engagement on areas of shared interest; increases risk military/cyber escalation; significantly/negatively impacts foreign trade; requires major US financial/military investment in allies/partners. In 10 years: Increased military tension in the Pacific; minimal cooperation on shared interest, bifurcated global spheres of influence.

Option 2: (Accommodate to Deter): US concedes Western Pacific/East Asia to China’s sphere of influence while maintaining regional military bases. US recognizes limited Chinese territorial claims in the South and East China seas to minimize the potential for military conflict. US uses soft power to shape IGOs and criticize China’s humanitarian abuses to combat further Chinese influence outside their sphere of influence. Pros: Reduces risk of military conflict; redirects spending to domestic priorities. Cons: Allows China to establish a Monroe Doctrine in the Pacific; betrays allies (ROK, Taiwan, Japan). In 10 years: US economic/military power in the Pacific is significantly diminished; China increasingly ignores UN agency/WTO rulings.

Option 3 (Coexist and Compete): US leverages IGOs, allies/aligned nations to push reciprocity in trade and economic arrangements. US strategically decouples industries where China can hold the US hostage. US/China develop military protocols to deescalate military flashpoints while the US still builds the ability to defeat China’s A2/AD capabilities as a deterrent to Chinese military actions. US works with allies to direct investment and projects in developing nations (i.e., World Bank 2.0) Pros: minimizes potential for military escalation; preserves US business access to China; protects US relationships with regional allies. Cons: requires significant cabinet-level effort to craft strategy/policy; requires significant US investment to synchronize allies to combat China’s efforts to undermine US/allied interests. In 10 years: Allies use IGOs like the WTO to normalize China’s growth; potential for cooperation on key international issues.

Recommendation/Implementation: Execute Option 3. POTUS creates a standing interdepartmental committee with the Departments of State, Defense, Justice, Commerce, &c. to (1) recommend policies that can be enacted under existing authorities; (2) provide draft legislation to combat unfair trade practices, authorize additional support to allies, and enable creation of a World Bank 2.0, &c.; and (3) create long-term interagency strategies. Direct DoD to work with China on military protocols and expand counter-A2/AD efforts. Work with allies on efforts to reform WTO rules to enforce reciprocity on Chinese economic/trade policies.

Talking Points for Secretary Pompeo

• While we look to keep America’s interests first, we still find numerous areas where we can work with China over the years ahead to combat global issues like global warming, transnational terrorism, and bringing developing countries into the twenty-first century.
• The US will work with our allies and international organizations to ensure that China does play by international norms in the realm of global trade, finance and economics. For every country to have fair and equal access to international markets and financing, every country needs to play by a fair and standard set of rules.
• We in the US—and we urge our allies to join us—will enforce reciprocal trade and finance arrangements on China. When China implements policies that undermine our interests in preserving intellectual property, devalue our currency, or seek to economically punish our allies, we will act in response.
• The US will work with China and all of our regional partners in the Pacific to develop protocols to follow when we have our militaries operating in close proximity. These protocols will prevent accidents from turning into escalating military crises.
• We will work to invest in the developing world so that countries can bring their own people out of poverty and engage with the world. Our actions in this regard are not to force countries into a quid-pro-quo or use debt to hold a country hostage to US interests, but rather to ensure that every country can develop an economy that benefits its own citizens.

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Honorable Mention: Jessica Robyn Jordan 

Issue: How ought the U.S. to leverage its hard and soft power(s) to address problems precipitated by China’s rise that threaten U.S. vital interests, and, critically, while so doing, avoid the Thucydides’s Trap?

Problem: China’s rise presents challenges (loss of U.S. influence) and opportunities (collaboratively addressing problems of transglobal importance). The U.S. must prioritize better engagement with its own internal systems [i.e. the intelligence community (IC)] to best navigate the China challenge [i] —amid yet a larger transglobal threat landscape.

The endgame is to leverage China’s power in a way that is beneficial to the U.S.

Relevant National Interests: [ii] 

• Shaping an international system in which the U.S. continues to thrive. [iii] 
• Preventing the emergence of a hostile major power, [iv] and, to that end,
• Pursuing harmonious, non-adversarial relationships with nations that pose a threat. [v] 

Analysis: 

• The People’s Republic of China (PRC), under the Chinese Communist Party (CCP), will likely assertively respond to a U.S. “Cold War II” posture by continuing to violate international norms and threaten rules-based order in launching cyber theft campaigns of global scale, in further militarizing the South China Sea and developing anti-access area denial (A2/AD) capabilities, and exhibiting economically and militarily coercive behavior toward other countries. [vi] 
• Russia and China will likely continue to strengthen ties, as witnessed by recent bilateral military exercises. [vii] 
• China faces numerous security challenges and governance troubles: a slowing economy; shrinking aging force; on-going territorial disputes, and pressure to capitalize on a “window of strategic opportunity.” [viii] 

Strategic Options: 

“Maintain The Status Quo” 

Continue to Balance China’s Power by Strengthening Regional Military and Diplomatic Relationships 

Pros: 

• A robust Indo-Pacific partnership enables sharing of intelligence/resource/access to better understand China’s interests, intents, and capabilities.
• U.S. force posture affords capability and credibility to U.S. allies in region.
• f China is driven by desires for territorial, military, and economic dominance, it is prudent to build U.S. defense capabilities—but:

Cons: 

• ...does this force posture and partnership strength drive China to more deeply entrench its military presence?
• Risks accidental war; China misreading U.S. “protection” and securitization intentions.
• Resource heavy; costly; strains bandwidth if another conflict demands U.S. attention.

“Pursue a Grand Bargain”

Glaser’s Policy of Territorial Accommodation [ix] 

Pros:

• U.S. ending defense commitment to Taiwan reduces possibility of war with China; [x] U.S. not caught in crossfire if independent decision-making in Taipei escalates tensions.
• Taiwan is not a U.S. vital interest.

Cons: 

• Might signal to China U.S. not unwilling but unable to provide for defense of Taiwan; risks China becoming militarily assertive in response.
• Implementation requires repeal of Taiwan Relations Act by U.S. Congress.
• Bargain might erode perception of credibility among allies.

“Pivot to Asia America”

Re-engage critical internal systems to revitalize U.S. capabilities

Recommendation: The most effective and efficiently realized U.S. policies regarding China will be born from a carefully managed relationship with the U.S. IC: information regarding China’s posture, interests, and who or what affects senior leadership’s decision-making better prepares U.S. strategists in multiple domains (e.g. arriving at the negotiations table armed to achieve a satisfactory trade deal; whether a “grand bargain” is probable; how to develop force and partnership posture); moreover, such information prevents strategic missteps that might otherwise ensnare the U.S. and China in the Thucydides’s Trap; it is the strategy that undergirds all other strategic options. Of the three options assessed in this strategic memo, it registers as moderate resource input and of lowest risk.

Pros: 

• Informs whether to continue status quo (option 1), or moderate, heighten, lessen; whether a “grand bargain” might appeal to China.

Cons:

• Guard against politicization; requires time input by policymaker.

Implementation:

• Consult doctrine (the IPSR, NDS, NSS), request NIEs (National Intelligence Estimates); review prior NIEs to understand U.S-China relationships over time/key trends; ask strategic questions of the IC (see Appendix II).
• Meet with IC regularly to exchange views and explore ideas; guide collection and research efforts not only at the outset of request, but provide iterative feedback to the IC.
• Ask analysts to defend their work. An analytically rigorous debate enables both parties to engage in a productive discussion without risking inappropriate fraternization, as the focus is on testing the integrity of the product.
• If intelligence chafes against a policymaker’s intuition or desired course of action regarding China in a way that is impossible for him to overcome, instead of abandoning the intelligence entirely, request a hearing of the differing analytic perspectives on that topic. Although IC products are corporate/collaborative, there may be occasions in which the policymaker can probe for understanding of alternative readings in an effort to unearth the most solid estimate, not to sow seeds of division.
• Both parties should be sensitive to overt (and covert) policy goals that may distort China analysis; the burden remains on both parties to be aware of, and actively guard against, politicization.
• As Gates advises, policymakers ought not to “dictate the line of march” they anticipate analysts to take. [xi] 

Appendix I

Talking Points

• A thoughtful diagnosis of China’s threats will enable U.S. policy to be crafted in a way that meets Beijing’s interests, to avoid escalation and war. Here the IC is key. Share best practices for combatting mutual problems: when there is more value to be had in collaboration than competition, the pendulum shifts in favor of coordination and cooperation. U.S. should work to demonstrate those areas of perceived mutual value. Result in a de-escalation of tensions.
• U.S. needs better clarification about whether China is driven by security concerns, or desire for dominance; understanding this question better informs all policy options in response. Is it that China seeks to challenge the U.S. led order [xii] or, rather, gain influence within it? How can the U.S. shape conditions for China to pursue the latter? Thoughtfully interrogate, and not assume, what China’s key intentions and vital interests are (not necessarily America’s). Engaging the IC here is critical to effectively answering these questions. A fractious relationship between the IC/policymaking community is itself a threat; elevate intelligence as the single most important driver of decision-making regarding China. Policymakers: not competing with IC for influence; rather, invaluable asset/ally in making sense of strategic options.
• On a broader strategic plane, U.S. security might be best realized through a multipolar system (e.g. bi-hegemony with China) than through the exhaustive and ultimately futile efforts of exerting continued preeminence. [xiii] Given that security is of vital interest of the U.S., a multipolar system must be not just seriously entertained – but embraced by the U.S. – if it is vehicle through which U.S vital interest(s) are most reliably met. To this end, China is best received as a friend to the U.S. than fought as its foe. The NDS charges policymakers to pursue a long-range course of “transparency and non-aggression” [xiv] between U.S. and China; a strategy of restraint in service to avoiding the Thucydides’s Trap.

Appendix II

Key questions policymakers might ask the IC regarding China include:

• How deeply does President Xi Jinping care about maintaining cordial relations with Washington vis-à-vis a trade deal (or generally?) How inclined is Xi Jinping to approach a U.S. trade deal in a way that avoids an adversarial relationship with Washington?
• What threats does Mr. Xi Jinping face that could affect his decision-making vis-à-vis securing a satisfactory trade deal?
• How splintered is Xi Jinping’s economic advisory team, and who most closely influences his decision-making vis-à-vis a potential U.S. trade deal? (Idea being that if we can target/influence the decision makers that affect Xi Jinping’s willingness to broker a deal, we can potentially affect the outcome favorable to U.S. interests.)
• What are the risks to the U.S. if a “decoupling” from China occurs? Benefits? Which U.S. strategic partners have the closest economic relationships with China, and what is at stake for them as the U.S. brokers a potential trade deal? Which international actors are helped and hurt by an escalation of the U.S. trade war with China?
• How will the outcome of China’s willingness to play ball with a U.S. trade deal affect, more broadly, U.S./China relations?
• How does China’s predatory economic practices influence their military modernization program?
• How do U.S. allies perceive the trustworthiness and reliability of the U.S. (in the event coalition building is required vis-à-vis engaging China with the world economy in a constructive way?)
• How will the escalating trade-war with China affect the U.S. economy? What is the main concern/interest of China heading into trade deal talks?
• How will the outcome of a trade deal with China affect U.S. markets?
• How will China react to a firmer U.S. posture during trade deal talks? A weaker one? What are President Xi Jinping’s most pressing economic concerns for China, heading into trade talks?
• Who are Mr. Xi Jinping’s closest economic allies, and how are they affecting his decision-making vis-a-vis a U.S. trade deal?
• How does China’s softening economic climate affect Mr. Xi Jinping’s eagerness to broker a U.S. trade deal?

^{[i] Questions abound: How can the U.S. secure its vital interests without provoking China or precipitating accidental war? How can the U.S.’s China strategy serve in concert, and not in conflict with, other national interests/policies, as well as those of U.S. allies? This memo presupposes the strategic end goal of pursuing a policy of détente with China; that is, avoiding an unproductive escalation of tensions to war, thereby avoiding the “Thucydides’s Trap” see: Graham Allison, “Destined for War.”}

^{[ii] That is, issues of vital importance to America’s survival and security vis-à-vis the China challenge.}

^{[iii] See the 2019 U.S. Department of Defense (DoD) Indo-Pacific Strategy Report (IPSR), pg. 4: “The Department of Defense supports choices that promote long-term peace and prosperity for all in the Indo-Pacific. We will not accept policies or actions that threaten or undermine the rules-based international order – an order that benefits all nations.”}

^{[iv] See: IPSR, pg. 5: “Achieving peace through strength and employing effective deterrence requires a Joint Force that is prepared to win any conflict from its onset. The Department, alongside our allies and partners, will ensure our combat-credible forces are forward-postured in the region. Furthermore, the Joint Force will prioritize investments that ensure lethality against high-end adversaries.”}

^{[v] See: IPSR, pg. 5: “Partnerships – Our unique network of allies and partners is a force multiplier to achieve peace, deterrence, and interoperable warfighting capability.” See: IPSR, pg. 23. See: IPSR, pg. 24. The IPSR acknowledges the Indo-Pacific as the DoD’s priority theater. The National Security Strategy (NSS) identifies enduring U.S. national interests: protecting the American people, promoting American prosperity, preserving peace through strength, and advancing American influence. Both the NSS and the National Defense Strategy (NDS) acknowledge the Indo-Pacific as critical for America's continued stability, security, and prosperity.”}

^{[vi] See: IPSR, pg. 8. See: IPSR, pg. 4; 19. “We will not accept policies or actions that threaten or undermine the rules-based international order – an order that benefits all nations.”}

^{[vii] The Sino-Russian relationship is assessed by U.S. intelligence as “stronger than any point since mid-1950s.” See: Worldwide Threat Assessment.}

^{[viii] According to ODNI’s Global Trends. See: https://www.dni.gov/index.php/global-trends-home. See: Reveron et. al., pg. 245. Some subject matter experts assess that China “has a strict policy of noninterference that does not create challenges to the current international order.}

^{[ix] This idea is championed by Charles L. Glaser in his piece, “A U.S.-China Grand Bargain: The Hard Choice between Military Competition and Accommodation”; he thoroughly details the pros/cons of the strategy in his journal article.}

^{[x] Currently, U.S. bound by the Taiwan Relations Act to defend Taiwan from Chinese attack.}

^{[xi] See Robert Gates’ “Guarding Against Politicization” speech: https://www.cia.gov/library/center-for-the-study-of-intelligence/kent-c…}

^{[xii] See: Reveron et. al., pg. 246.}

^{[xiii] Subscribes to Layne’s thinking (See: Reveron et. al., 238).}

^{[xiv] See IPSR, pg. 18.}

EUA continuam a ver a China como adversária - Council on Foreign Relations

Um grande império, dubitativo sobre seus próprios valores e princípios, se interroga sobre o que fazer em face de um outro grande império que pretende construir um futuro brilhante para o seu povo, sem necessariamente exportar o seu modelo político como o melhor para o mundo.
Paulo Roberto de Almeida

Grand strategy toward China needs ‘coalition of the democratic willing’

Democracy Digest, January 16, 2020

If it is not to lose its strategic struggle with China in Asia and globally, the United States needs to present an alternative model to Beijing’s authoritarian archetype, says a new report. That requires an integrated grand strategy that competes with the PRC across many integrated domains—diplomacy, the global economy, defense, digital technology/artificial intelligence (AI), the cyber sphere, public information, and ideology, writes Robert D. Blackwill, Henry A. Kissinger Senior Fellow for U.S. Foreign Policy at the Council on Foreign Relations.

“China wants to replace the United States as the strongest and most influential power in Asia and beyond,” he warns. “Washington should launch an all-out effort to limit the dangers that Beijing’s economic, diplomatic, technological, and military expansion pose to U.S. interests in Asia and globally,” Blackwillwrites in Implementing Grand Strategy Toward China: Twenty-Two U.S. Policy Prescriptions.

The United States should marshal its diplomacy with nations within the region, as well as those outside it (e.g., European countries that favor rules-based approaches—although this will require awakening Europe from its strategic stupor), in order to strengthen international organizations to make progress on climate, free trade, international security, and freedom of navigation. This coalition of the democratic willing, this “global commonwealth,” as President George H.W. Bush called it, should be launched at the heads-of-government
level in Washington, Blackwill adds:

The United States should also protect the integrity of its democratic institutions, both for the good of the nation and to offer a powerful alternative model to China’s authoritarian archetype. China’s meteoric rise, coupled with its present economic and military strength, makes the “China model” a beguiling path for some developing countries. While the United States is right to invest increased time and money to actively challenge China, liberal democratic values will be less attractive overseas if the United States cannot successfully manage its own affairs. RTWT

China is trying to shape the global narrative about its actions at home and abroad, Freedom House said in a report published Wednesday, writes Anna Fifield, The Washington Post’s Beijing bureau chief.

Not content with pervasive censorship and state control of almost all media at home, the ruling Communist Party under strongman President Xi Jinping has dramatically stepped up its efforts to disseminate its version of events….Freedom House is among the American human rights organizations penalized by China in retaliation for the United States’ support for protesters in Hong Kong. Others include the National Endowment for Democracy and Human Rights Watch.

“China is trying to promote itself as an international model,” said Sarah Cook, senior research analyst for China at Freedom House and the author of the report, “Beijing’s Global Megaphone.”