November/December 2015

The year in U.S.-China relations concluded as it started—in the uncertain afterglow of an Obama-Xi summit that stressed cooperation and delivered agreements on cybersecurity, climate change, and military encounters. Although the September 2015 meeting appeared to stem further deterioration in mutual perceptions, mistrust between governments and citizens continues to shackle the relationship.

2015 made clear that the ability to shape regional and international orders is now the measuring stick for both the cooperative and competitive sides of U.S.-China relations. Beijing has long insisted that China does not wish to overthrow the existing system, but has been equally vocal about the need for reform. Xi Jinping’s ideology campaign and the recent World Internet Conference in Wuzhen are two examples of China’s attempt establish its domestic practices as legitimate international models for treatment of individuals and information. China’s “going out” policy has been met in the United States by a surge of commentary questioning America’s engagement with China and advocating a “tougher” approach.

Despite rhetorical sparring and other contentious issues, however (U.S. arms sales to Taiwan, the South/East China Seas), U.S.-China military relations have improved. Since 2011, and especially since Xi Jinping came to power, Washington and Beijing have made a concerted effort to normalize and codify military interactions and communication. This cooperation could lay the groundwork for defusing tensions that are certain to arise in 2016.

Major Issue Tracker

China as an Emerging Superpower

  • China Produces Its First Large Passenger Plane (November 2): In a push to become a global player in aviation, China unveiled its first commercial passenger jet last month in Shanghai. According to the Business Insider, “China is one of the biggest aviation markets but relies on Boeing and Airbus aircraft. The multibillion-dollar effort…is aimed at clawing back some of the commercial benefits that flow to foreign suppliers.” The new C919 won’t take its maiden flight until about 2019. For more on this story see the Wall Street Journal or The Economist.
  • CCP and KMT Leaders Meet for First Time in Nearly Seven Decades (November 7): As reported in The Guardian, Xi Jinping and Ma Ying-jeou began a summit in Singapore with a minute-long handshake. Most analysts believe the meeting will have scant impact on Taiwan’s January 2016 elections, but it allowed Xi to highlight his commitment to unifying the motherland. For more analysis, see Richard Bush and Robert Daly’s essays.
  • TPP Leaders Celebrate & China Pushes an Asia-Pacific Free Trade Area (November 19): As reported by Shannon Tiezzi in The Diplomat, at this year’s APEC summit in the Philippines, President Xi continued to emphasize regional connectivity, including the completion of a free trade area spanning the Asia-Pacific region. The United States and its partners, meanwhile, celebrated the conclusion of the Trans Pacific Partnership agreement, as reported by Wall Street Journal.
  • Xi Sends Strong Signals at Paris Climate Talks (November 30): Xinhua reported that President Xi used the Paris climate change conference to declare Beijing’s commitment to fulfilling its obligations and willingness to advance international cooperation. While Xi addressed the conference, Beijing issued its highest air pollution alert of the year. Here is a picture I took on a cloudless December 1 while strolling in the capital.

  • China Complains About U.S. Plane in Disputed Airspace (December 19): While on a routine mission over the South China Sea, an America B-52 bomber unintentionally flew within 2 nautical miles of an artificial island built by China. According to the Wall Street Journal, a U.S. Defense Department spokesman said the flight was not meant to provoke the Chinese. The flight came amid rising tensions over China’s island-building program and U.S. operations challenging Beijing’s broad claims in the area. (see this CNN report).
  • China Passes Controversial Counter-Terrorism Law (December 28): China’s new anti-terrorism law requires foreign technology firms operating in China to help decrypt information and allows China’s military to conduct counter-terror operations overseas. The law was passed days after many countries, including the U.S., issued security warnings to citizens about visiting a popular district in Beijing …Read More>>

 

The American Rebalance to Asia

  • U.S. to Continue South China Sea Naval Operations (November 3): According to the Financial Times, U.S. Defense Secretary Ashton Carter told his Chinese counterpart that the United States would continue to conduct naval operation in the South China Sea. China replied that it would defend its sovereign territory and had a “bottom line” when it came to U.S. Freedom of Navigation patrols. Reuters also reported on the story.
  • U.S. Patrol Sought to Avoid Provocation, Not Reinforce China Island Claim (November 7): The U.S. Navy deliberately avoided military drills or other actions that could have further inflamed tensions with Beijing during a patrol near islands China has built in the South China Sea, U.S. officials said: "We wanted to assert our rights under international law, but not to the point where we were poking the Chinese in the eye, or where it would unnecessarily escalate the situation." Bonnie Glaser and Peter Dutton had an excellent piece on U.S. Signaling in the National Interest (see below under “Essays”)…Read More>>
  • Vietnam Hopes Trade Deal will Tip Balance Toward U.S. (December 8): Vietnam stands to be one of the biggest economic beneficiaries of the recently concluded Trans Pacific Partnership deal. According to the Washington Post, the country wants to reduce dependence on China and forge closer ties with the United States, due in part to China’s assertion of territorial claims in the South China Sea.
  • U.S., Singapore Ink Enhanced Defense Cooperation Agreement (December 9): The United States and Singapore signed a defense pact that will provide a new framework for an expanded military relationship between the two partners. According to The Diplomat, the U.S. made its first deployments of P-8 Poseidon spy planes to Singapore in December. USNI News and Straits Times also reported the story.
  • Obama Administration Authorizes Arms Sale to Taiwan (December 17): The Obama administration formally notified Congress last month of a $1.83-billion arms sale package for Taiwan, including two frigates, anti-tank missiles, amphibious assault vehicles and other equipment, drawing an angry response from China. The authorization, as reported by Reuters, is the first such major arms sale to Taiwan in more than four years.

 

Cyber, Espionage, and Crime

  • XYZ Accused of Blocking Websites at Request of Chinese Government (November 2): Santa Monica-based domain registry XYZ.com struck a deal with the Chinese government under which it will deny domain registration to names banned in China to applicants outside of China. In return for blocking worldwide registration of politically sensitive domain names, XYZ.com has broken into China’s thriving domain market and has generated hundreds of thousands of paid registrations from Chinese users. The Los Angeles Business Journal and Wall Street Journal reported the story.
  • China shifts Commercial Hacking OPs from Military to Civilian Agency (November 30): According to the Washington Post, the Chinese military scaled back its cyber theft of U.S. commercial secrets in the wake of Justice Department indictments of five officers. The surprising drawdown shows that the U.S. action had a more significant impact than had been assumed, current and former U.S. officials said.
  • China Claims Hacking of U.S. Workers’ Data was a Crime, Not a State Act (December 2): According to the New York Times, China acknowledged for the first time that the breach of the United States Office of Personnel Management’s computer systems, which the Obama Administration said exposed the personal information of more than 21.5 million people, was the work of Chinese hackers. But China insisted the breach was a criminal activity, not a state-sponsored cyberattack. Reuters also reported on this story.
  • China’s View of Internet ‘Freedom’: Takeaways from the Wuzhen Conference (December 16): President Xi delivered the keynote address at China’s second annual World Internet Conference in Wuzhen. Jonathan Kaiman of The Los Angeles Times outlined six key takeaways from the conference. China used the conference to try to convince other countries to accept its model of Internet control, per this Xinhua piece.

 

Military

  • A New High for U.S.-China Military Ties (December 4): Since 2011, the United States and China have been working to rebuild military-to-military relations. This process is speeding up, as demonstrated by the first U.S.-China-Army Dialogue held in Beijing on November 19 (see above). The two sides agreed to new confidence-building measures even as military tensions grow in the Pacific Rim…Read More>>

 

Soft Power

  • Beijing’s Covert Network Airs China-Friendly News Around the World (November 2): A Reuters investigation identified a global network of 33 radio stations in 14 countries whose majority shareholder is state-run China Radio International (CRI). While similar to the government-run Voice of America in some respects, CRI is not transparent about its Beijing backing. Virginia-based WCRW receives funding from CRI and broadcasts China-friendly news and programming throughout the Beltway.

 

Trade & Economic Relations

  • Trump Vows to Declare China a Currency Manipulator on Day One (November 10): In an op-ed written for the Wall Street Journal, Republican presidential candidate Donald Trump pledged to declare China a currency manipulator on his first day in office. "We must stand up to China’s blackmail and reject corporate America’s manipulation of our politicians," the Trump campaign wrote in a new trade policy position posted on its website. …Read More>>
  • China Says No Tough Rules for Foreign Bank Card Firms (November 10): As reported by Reuters, the People’s Bank of China announced that China will not impose tough licensing restrictions on overseas bank card providers seeking to enter the country’s $7 trillion card payment market. U.S.-based card companies Visa and MasterCard have been lobbying for more than a decade for direct access to China’s fast-growing cards market, which is projected to become the world’s largest by 2020.
  • SEC Charges Two With Insider Trading (November 11): According to the Wall Street Journal, the U.S. Securities and Exchange Commission brought charges of insider trading against residents of Beijing and Hong Kong in a civil case related to two health care takeovers.
  • Talks Held on Standards & IP, Trade Secrets, GIs, Broadcasting, Enforcement (November 24): The 26th United States-China Joint Commission on Commerce and Trade (JCCT) meeting covered a wide range of intellectual property issues …Read More>>
  • Poorly Paid, Low-Skilled Workers Become the Deep South’s Strength (December 1): Chinese companies are setting up offices in America’s Deep South, where unemployment is high, land is abundant, and labor is cheap. The Washington Post profiles one such company operating in rural Alabama.
  • U.S. WTO Case Against Chinese Tax on Aircraft Imports (December 8): According to the Associated Press, the United States is bringing suit against China at the World Trade Organization, protesting that taxes on imported aircraft give Chinese manufacturers an unfair advantage. For more analysis on this story read this Wall Street Journal article.
  • U.S. Trade Office Concerned about Alibaba e-commerce Site (December 17): The U.S. Trade Representative (USTR) warned Hangzhou-based Alibaba to make a greater effort to prevent the sale of pirated and counterfeit goods on its online platforms. Both Alibaba.com and its hugely popular Taobao Marketplace were placed on the USTR’s “notorious markets” blacklist in 2008 but were later removed. Related: Alibaba’s Global Ambitions Face Counterfeit Challenge.
  • U.S. Wary of Europe Granting Market Economy Status to China (December 28): According to the Financial Times, Washington has warned Brussels against granting China ‘market economy status,’ saying the long-sought trade concession could hamper efforts to prevent Chinese companies flooding U.S. and European markets with unfairly cheap goods.

 

Education and Academic Relations

  • Chinese and American Education: Compare and Contrast (November 12): A series of essays by James Fallows and others on the strengths and weaknesses of the Chinese and American school systems, from The Atlantic.
  • Glenwood & Chao Wai: Side by Side: Jocelyn Reckford, an American high school student, was the first and only foreigner at Chao Wai School in Beijing when she was in grades 1-3. For grades 4-5 she attended the Mandarin dua- language class at Chapel Hill’s Glenwood School. She compares her Chinese and American experiences here.  
  • Do Years Studying in America Change Chinese Hearts and Minds? (December 7): With Chinese making up almost one-third of total international enrollments in the United States, it is important to ask how American study shapes the views of young Chinese. A Foreign Policy investigation suggests that “Chinese students in the United States…often emerge with more admiration for the United States…But also gain more respect for the enormity of the task involved in running China.” 

 

Media

  • Smarter, Sexier State Media: China’s New Propaganda App (December 17): Pengpai, a web-based media outlet headquartered in Shanghai, promises to provide news on “politics and thought.” The state funded company, launched in 2014, now has over 300 staff and is the first Chinese web-based news organization to create a mobile news application with its own content… Read More>>

 

If You Read/Watched Nothing Else in November/December...

The fine writing and film/videography on U.S.-China relations published each month far exceeds the assimilating capacity of any institution. It would be ridiculous to feature “the best” efforts of the past 30 days, but KICUS would like to highlight the following work nonetheless:

Blog

New Yorker Writers: How Coverage of China Has Evolved (Asia Society’s Asia Blog)

Reports

China’s 13th Five Year Plan (Bloomberg Brief)

China Naval Modernization: Implications for U.S. Navy Capabilities—Background and Issues for Congress (Ronald O’Rourke, for the Congressional Research Service)

Essays

The U.S. Navy’s Freedom of Navigation Operation Around Subi Reef: Deciphering U.S. Signaling (Bonnie Glaser and Peter Dutton, The National Interest)

The West Should Accept China’s Media Model: Why Alibaba’s takeover of the South China Morning Post will improve coverage of China. (George Yeo, Foreign Policy, December 15)

Videos

China and the Global Economy: Dialogue on China's 13th Five-Year Plan (Peterson Institute for International Economics)

Points (tipping), Lines (9-dash), Planes (military), and Spheres (of influence) - The Geometry of a Changing Relationship (Kissinger Institute’s Annual Year-End Review)

Podcast

The China-Taiwan Summit: Has Anything Really Changed? (Kissinger Institute)

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The Kissinger Institute on China and the United States.