Council on Foreign Relations

Thanks to its fabulous editor, Sanjaya Baru, I’ve begun writing a regular column, “DC Diary,” for India’s leading financial daily, the Business Standard.  An inaugural piece on Monday offered Indian readers a well-intentioned warning from America’s experience in a changing Asia.

What’s the warning?  Put bluntly, it is that economics, not security, still defines the essential strategic reality of Asia today:  China is fast becoming the central player in a new economic regionalism.  The U.S. and India are each enhancing their political and security profiles—albeit for different reasons and in different ways.  Yet both risk being left out as Asian economic integration tightens.

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Over the past two months, the South China Sea, which always has the potential to be a flashpoint between China and nations in Southeast Asia, has indeed become a flashpoint – between China and the United States. Yet the tensions over the sea are more than a short term problem. Resolving the competing claims in the South China Sea will be a critical test of China’s emerging power and its ability to deal with its neighbors, as well as the United States’ ability to work with Southeast Asian states to manage China’s rise.

See my new expert brief on the South China Sea here.

(Photo: Ho New/courtesy Reuters)

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With the summer winding down, I was searching for a good China read and came across Paul Midler’s Poorly Made in China. Midler has spent close to two decades living and working in China, the latter decade helping foreigners navigate the challenges of manufacturing in China. I’m not sure how I missed this book when it first came out, but I am glad that it crossed my desk now. It is one of the best business books on China that I have encountered in a long time.
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Over at The New Yorker, Evan Osnos has posted a fun piece on his “Letter from China” blog.  He nicely captures the ambivalence so many in China seem to feel these days about becoming the world’s second-largest economy.

“Why the long face,” Evan asks?  The news “has sent China into a frenzy of self-flagellation, in the hope of reminding people that it is still home to a lot of very poor people.”

Actually, this is hardly the first time we’ve seen China go into this kind of denial:  Back in 2006, China became the world’s number one emitter of greenhouse gases.  And in 2009, according to the International Energy Agency (IEA), it became the world’s largest consumer of energy.   Now, in the second quarter of 2010, China, at $1.33 trillion, became the world’s second-largest economy, surpassing Japan and moving into position to overtake the United States by about 2030.

So … why aren’t they cheering in Beijing?

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This past week, the Burmese generals captured global media attention by apparently stepping down from their posts in anticipation of the upcoming national elections, the country’s first in two decades. Of course, the stepping down, which includes around fifteen top army men, is something of a fiction; the military is controlling most aspects of the election, and certainly the military’s favored party is going to win the poll, but even a relatively cosmetic change in unchanging Burma makes news.

The generals’ decision shouldn’t be ignored – even a small window of political opening might set the stage for some independent-minded politicians to join the new parliament. However, the stepping down has overshadowed a potentially much more serious – and dangerous – decision by the regime. According to reports in Burma publications like the Irrawaddy, the regime recently warned the many ethnic insurgent armies operating on Burma’s frontiers, some of which have as many as 20,000 men under arms, that the junta will attack them next month if they don’t essentially disarm and join a junta-controlled border guard force. The militias, most of whom have had a shaky cease-fire with the junta for over a decade, thus far have refused.

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Several months ago, after writing an article complaining about the Obama administration’s lack of a coherent Asia policy, I got a fair amount of angry responses, pointing out the ways in which the administration’s Asia policy was beginning to emerge and would soon pay dividends. So, let me now give the administration credit, and also offer some worries. In the past two months, the administration has both shown much greater and more nuanced attention to Southeast Asia and has staked out clearer lines on where it stands on the region’s critical future issues. The question now is, can it back up its stances?

To review–after coming into office with a somewhat muddled China policy that seemed to please neither the Chinese nor many American opinion leaders, the administration has taken a tougher and firmer approach – and there is evidence from the past that, although Beijing may protest a tougher U.S. policy, it does appreciate consistency from Washington above all. The administration also has begun making good on its promises to be “back” in Southeast Asia, by weighing in on the South China Sea issue, by deciding to play a role in the East Asia Summit, and – possibly – by making Vietnam, not Indonesia, its most transformed foreign policy relationship in the region, not only through nuclear cooperation and joint exercises but also, in the longer run, the kind of security partnership the US now shares with Singapore.  And, a more nuanced policy toward Burma, which mixes continued engagement with a willingness to back a UN inquiry into Burmese war crimes – shows an ability to rethink sanctions and also a desire not to get fooled by the junta.

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Photo courtesy of REUTERS/Claro Cortes IV

I did a fun panel earlier this week on CNBC’s “Closing Bell” with Maria Bartiromo.  She asked a pretty straightforward question:  Is China challenging the United States on the frontiers of high technology, and, if so, what sectors should we watch?

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In an increasingly competitive region, and a world where a prolonged economic slowdown looks more than likely, the countries of Southeast Asia, constantly worried about competing with China and India, would want to give themselves every advantage, right? Right? Especially if that means trying to lure the kind of high-tech investment that not only pumps in money but also can help a country upgrade the value and quality of its workforce, right? Right?

Well, maybe not. Over the past year, as opposition movements or protests increasingly have threatened the governments of Thailand, Malaysia, Vietnam, and other countries in the region, many of these governments have taken a major step backwards on Internet freedom, even after previously vowing not to censor the Web the way they control traditional print and broadcast media. Thailand, somewhat surprisingly, has been the worst offender; though it is still nominally a democracy, it now reportedly bans more websites than any other country on earth, a truly remarkable achievement given the competition from places like China and Saudi Arabia. Prominent online editors and bloggers have been jailed. Bangkok blogger Bangkok Pundit recently reported that the Thai police have allotted some 120 people to search for online discourse that potentially defames the monarchy –  an enormous waste of the cops’ resources, and a sign of the paranoia and increasingly authoritarian style of Prime Minister Abhisit Vejjajiva’s government. Though Thailand’s stock market has stabilized, and a recent delegation of U.S. investors heard all the right promises from the government, increasingly strict Internet censorship, which poisons the political climate and, in the long run, will stifle Thai high-tech entrepreneurship, can’t be too reassuring to investors.

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In his posting last week on the South China Sea, Evan raised some points on China and the global commons that I want to riff on in the realm of cyberspace.

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