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China's Military, Economic And Domestic Agendas


This is TALK OF THE NATION. Im Mary Louise Kelly in Washington.

Defense Secretary Robert Gates is in China this week to bolster military ties between Beijing and Washington. China has made significant advances recently in modernizing its military and just today conducted the first test flight of a new stealth fighter jet.

Well, that's making people at the Pentagon nervous, but military tensions are just one facet of a very complicated relationship. Think trade and currency strains, human rights disputes, climate change, Taiwan, North Korea, all of them unsettling relations between the world's biggest economy and the world's rising number two.

Today, we're going to take a close look at those challenges, and we want to hear from you. What should the national priority be in the U.S. relationship with China? Our number here in Washington is 800-989-8255. You can email us. The address is talk@npr.org. And you can join the conversation at our website. Go to npr.org, and click on TALK OF THE NATION.

Later this hour, Verizon launches its iPhone. Ad man James Othmer will take us inside the ad wars between Verizon and AT&T. But first, China.

Roger Cliff joins us now from member station WUNC in Chapel Hill, North Carolina. He's a senior political scientist at the RAND Corporation, and he previously served in the Office of the Deputy Assistant Secretary of Defense. Welcome to the program.

Mr. ROGER CLIFF (Senior Political Scientist, RAND Corporation): Very much glad to be here.

KELLY: So tell me: How do you read the timing of this test flight today of a stealth fighter as Secretary Gates is in Beijing trying to hold talks?

Mr. CLIFF: Well, this is clearly intentional and not a coincidence. There are a number of things about the revelation of the existence of this fighter in the public realm that are clearly out of the ordinary for China.

Normally test aircraft in China, when it's being tested, will be painted in just a kind of yellowish-green primer. This one has a military paint job. It has a PLA Army insignia on it, which is another puzzling fact. Normally, they won't have any insignia when they're in test, and then the fact that it actually was flown on the day Secretary Gates was in China was clearly intended as a signal.

Now, this was not an official unveiling of the aircraft, but they did so in plain sight of the Chinese public, and they certainly could have easily blocked the Chinese public from seeing this aircraft being tested.

So all these things suggested that it was intended as a signal of China's rising capabilities, but they didn't want to do it in an official way, which would have been, of course, a diplomatic faux pas.

KELLY: On question mark that came out of that test today is Secretary Gates says he was assured by China's president that this was a coincidence. And there were questions raised over where there may be a gap between what China's military leaders are doing and what its civilian political leaders are doing, whether the military's acting more independently than the U.S., for example, might like.

Mr. CLIFF: It's always hard to say in China. It's possible that that has happened. It has happened in the past, we know, where the civilian leadership was maybe not completely apprised or aware of what the Chinese were doing.

That happened for the first time four years ago, when the Chinese tested an anti-satellite weapon, coincidentally also on January 11th. And the civilian leadership was clearly not entirely aware of what that test was going to be or at least what the likely international repercussions of it were going to be.

And in this case, it's possible that that happened, but you do have to remember that the Chinese military is firmly under the control of civilian leadership in China, and so they might be able to play fast and loose here and there. But the military is - although they have their own interests and agenda and so on, they are under the control of the civilians.

KELLY: I want to bring in callers in just a moment, but first, Roger Cliff, one more question to you, which is: Is it clear to you at this stage how China may be intending to use its growing military clout? As its military power increases, will it be using it for good or for pushing its neighbors in the region around?

Mr. CLIFF: Well, you know, it's always - first of all, a little bit tricky to treat a country like a person that has a set of intentions for the future.

China is a collective actor. Its leadership is going to undergo a transition just next year. So we will have a new set of leaders in charge of China, and they may have a different set of agendas and priorities than the current leadership.

But I think in general, people in China see - this includes the actual leadership of the country, as well as the informed public - see China as a rising economic power and a country that ought to have military capabilities that are comparable to its economic strength. And they just see this as part of the normal process of the emergence of a great power in the world. And they have started to refer to China as a great power.

And so they probably intend for China to use its military capabilities in all the same ways that other normal, great powers have, including the United States, which basically means protecting their interest, both within the region and around the world. And of course, their perception of their interest may at times conflict with our perceptions of our interest so - and those of other countries in the region.

So from the perspective of the United States or other countries in the region, that may be evil. But I don't think anyone in China thinks that they have a grand, evil design on the world but that they are simply trying to protect and advance their own interests.

KELLY: Well, let's take a call. We have Rich(ph) from Rochester, New York, on the line. Hi, Rich.

RICH (Caller): Hi, how are you doing this morning?

KELLY: Great, thanks for calling.

RICH: In looking at the - our relationship with China, I think we have to step back, and I think what the president is trying to do is trying to build a good diplomatic relationship with them, as best as we can.

I know that they have the stealth fighter, and the design is eerily like our F-22. But having said that, we know that the espionage and all that test stuff goes on. But are we willing to go into another highly tense Cold War situation with another nation after coming out of it?

I mean, at this point, aren't we tired of that, and don't we want to get past that? Because it's going to be tough enough economically, but then to add on to it a military arms race and stuff, I mean, they do what they do, but I don't know if we should just go in that direction. I just think the country doesn't -I dont think we have the revenue, I mean the resources, to go through that again.

I don't know. This is going to be a different situation than Russia. They are a economic power, and they are growing. It's not like they - Russia was a third-rate economic power when we were going up against them. So I just wonder what your guest thinks about that.

KELLY: Roger Cliff, our caller Rich uses the phrase raises the specter of returning to some sort of Cold War. Do you see any danger of things escalating to that point?

Mr. CLIFF: Yeah, I really agree. Well, I think it's too early to say whether or not there's such a danger. But I do agree with Rich that we don't want to go down that path. And there are a variety of reasons for that.

Most importantly, as he points out, we have a much different kind of relationship with China than we did with Russia. Russia was a very kind of one-dimensional relationship, where it was all about power and influence in the world. But we are highly interdependent with China economically. And both countries are much more interdependent with the rest of the world than we used to be.

So we both lack the capability to really impose the kind of Cold War kinds of policies that we imposed on the Soviet Union back in those days. We can't do that against China, and we don't want to. We have - both countries have too much at stake in terms of maintaining a cooperative relationship.

That said, I do think that we need to hedge against the possibility of the relationship taking a turn for the worse. And so we do need to devote not massive amounts of resources, China is nowhere near where the Soviet Union was in terms of military capability relative to ours. But we do need to start to focus and devote significant amounts of military resources to China.

Our defense budget is about $700 billion a year, and very little of that can really be said that it's designed for countering the capabilities that China is developing. So this wouldn't necessarily mean a huge increase in defense spending but rather a reprioritization of the money we already spend.

KELLY: All right, thanks very much for you call Rich. Thanks very much. And Roger Cliff, before we let you go, let me ask you the big-picture question that I think a lot of people wonder.

You mentioned that China is nowhere near where Russia was in the heyday of that rivalry in terms of being able to challenge U.S. military supremacy. How close is it? How many years away might it be?

Mr. CLIFF: Yeah, I'm always a little hesitant to use years because the question is, well, whose years? When, you know, there have been studies that have said in the past that China's 20 years behind the U.S., well, what do you mean by that? Do you mean they are today where we were 20 years ago? Do you mean they will catch up to us in 20 years and so on?

And the other things is China doesn't really have to catch up to the U.S. They are not a global competitor with the United States like Russia is - or was, I should say, the Soviet Union was, rather. China is very much focused on interests in its immediate region.

Mostly significantly is its desire to eventually re-absorb the now-independent island of Taiwan under the government in Beijing, and the U.S. has committed to protecting Taiwan. And that is a very asymmetric situation, where Taiwan is only 90 miles away from China and several thousand miles away from the United States.

So to make things difficult for us, China doesn't need to catch up to the U.S. They just need to have certain kinds of capabilities that could make it very difficult for us to defend Taiwan.

KELLY: All right. Roger Cliff, thanks so much for your time.

Mr. CLIFF: My pleasure.

KELLY: We've been speaking with Roger Cliff. He is a senior political scientist at the RAND Corporation, where he specializes in Chinese military strategy and capabilities, and he was on the line with us from member station WUNC in Chapel Hill.

Well, we've got a break coming up, and after that, we're going to turn to some of the challenges posed by China's economic agenda and its energy policies. We're going to have with us Damien Ma, he's in the studio with me in 3A. Welcome. Damien Ma is with the Eurasia Group, and we're going to be taking some questions on China's economy, on China's climate change efforts.

And we'll be right back after the break, when we'll be taking more of your calls on what the national priorities should be in the U.S. relationship with China.

You can reach us, we're at 1-800-989-8255. You can email us, we're at talk@npr.org. I'm Mary Louise Kelly, and you're listening to TALK OF THE NATION from NPR News.

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KELLY: We're turning now to some of the challenges posed by China's economic agenda and energy policies. You're listening to TALK OF THE NATION from NPR News. I'm Mary Louise Kelly.

And one way to describe the relationship between the U.S. and China is complicated. Beijing is a huge trading partner, of course, also a rising military challenge. The country often serves as America's banker and is often accused of violating human rights. We'll be talking more about that in a few minutes.

What should the national priority be in the U.S. relationship with China? You can reach us at 800-989-8255. You can email us at talk@npr.org. And you can join the conversation at our website. Go to npr.org, and click on TALK OF THE NATION.

Well, our guest now is Damien Ma. He's an analyst at the Eurasia Group, which is a political consulting firm, and also a correspondent for The Atlantic magazine. Welcome.

Mr. DAMIEN MA (Analyst, Eurasia Group): Thank you very much.

KELLY: Let me talk - let me start with the economy, which I know you've written quite a lot on. I think fair to say that there's a lot of fear here in the U.S. about China as this economic juggernaut. So let me start by asking, how would you characterize, what is the economic relationship between the U.S. and China today?

Mr. MA: I think a simple word I often use is the idea of coopitition(ph), that is cooperation combined with competition.

KELLY: Coopitition.

Mr. MA: Right. And I think that element has really defined the bilateral economic relationship for quite some time, ever since, I think, we established formal diplomatic relationship with the Chinese in 1979.

This relationship has evolved and I think a lot of the so-called fear that you speak of, I think part of that was coming out of the last decade, the first decade of the 21st century, which I would argue that the Chinese had a pretty good decade, 10 percent growth for the most part, and they came out of the financial crisis the second-largest economy.

So I think there is some of that, China is doing better than the other countries, and that I think has produced some of the fears that you're talking about.

KELLY: Okay. You talk about coming out of the financial crisis as the world's number two economy. I asked the question when we were talking about the military when China might be able to challenge the U.S. for the number one spot. When you're talking economic issues, what do you say?

Mr. MA: I think the challenge had always been there. I think ever since China held the Olympics, I think there's been a perceptual shift of how fast the Chinese are coming up economically. And I think the issue right now is that they're competing on multiple fronts simultaneously.

They have accrued a lot of wealth. A lot of their state-owned companies backed by the government are competing toe-to-toe with U.S. companies, not just in China but also across the world, in Africa and Latin America. And so it's become a much more, you know, multi-dimensional and complicated economic competition and collaborations, our relationship.

KELLY: So are there any good estimates for when China might be able to surpass the U.S. economy?

Mr. MA: Most economists believe around the year 2030. You know, this is almost inevitable, assuming China continues its basic, you know, eight to nine percent growth. That's the projection, anyway. If they can keep that up, just look at the natural demographic. China has 1.3 billion people. Just because China becomes the biggest total economy in general, they are still going to be behind the U.S. and other developed countries in terms of per capita income. So there's always a dichotomy when talking about China.

KELLY: Let me bring a caller into the conversation. We've got Sam(ph) on the line from Portland. Hi, Sam.

SAM (Caller): Yeah, hi. I make my living as a pilot, flying freighters in and out of different countries, including China. And, you know, it's kind of obvious when you see an airplane come in with a few envelopes on it, and you leave with several hundred thousand pounds of very, you know, technologically advanced manufacturing equipment, that one of the problems we have is we're shipping massive amounts of our economy over to China.

At the same time, that's driving the cost of energy up, of course, because they're consuming energy to create this stuff. So we're all paying three to $4 a gallon for fuel. And what's happening is we're, you know, high unemployment rate in the U.S. and in Europe and in other parts of the developed world, like in Japan, that's being sort of sustained partly because corporations refuse to build anything in their own countries to cut costs on labor.

Well, what you end up happening then is people out of work. No one wants to pay taxes to support them, and so it's kind of like a catch-22. Why can't we simply slap tariffs on this stuff that's coming in from China or tell the companies to manufacture it within our borders so we can cure some of this unemployment and not have to worry about - or else take some of the tax revenues from tariffs and sustain some of these people that are basically out of work?

And like he said, in 20 years, my son's lifetime, when he's going out to go look for professional work, what's he going to do? I mean, where does this end? It's unsustainable, and all we do is we run our credit cards up, we shop at Wal-Mart, and we find ourselves basically buying everything from China.

KELLY: Damien Ma, he raises a lot of issues there - tariffs, labor issues, et cetera, and I think probably reflects a certain frustration that many Americans feel about how the relationship is unfolding.

Mr. MA: I would basically agree that I think the fundamental structural issue, I think, is globalization hasn't benefitted everybody. It has benefitted the Chinese quite a bit, ever since they acceded to the World Trade Organization.

I think it is clear that we have less of a manufacturing industry in the United States, and the Chinese are building out theirs and to ever higher - and high-value-added manufacturing.

So these are structural issues that I think, you know, different countries are dealing with this wave of globalization differently. And one could argue that China also may eventually hit the wall in terms of their current model, where they actually just continue to pursue the current model and they don't switch up to a more innovative, more creative economy, service-based economy, which is a huge problem with the Chinese right now, so that they basically get caught in this middle-income trap that they can't really, you know, escape.

So it's not necessarily that China's just going to run away with everything and they will be, you know, leaving everyone else in the dust. I think that's a slightly exaggeration.

KELLY: So you see real questions there in terms of China having innovation and creativity, not just being able to produce something but being able to come up with the designs for the next great new thing.

Mr. MA: That, too, and also, China faces huge environmental degradation, huge environmental cost that eventually is going to catch up and probably have a huge impact on economic growth.

And these are domestic issues that I think really looms large in - if you talk to Chinese people, that's what they'll tell you. So they don't necessarily view their becoming number two in the world as a huge status symbol, per se.

KELLY: Okay. Sam, thanks very much for your call there from Portland.

SAM: Okay, thank you.

KELLY: Thanks a lot. Let me take an email here. This is a question from Virginia(ph), writing from Grass Valley, California. And she writes: If you go to any store in America, most of what is in it is made in China. Our debt is held by China. We are essentially the United States of China. We are utterly dependent on China as a nation. They don't need to develop military weapons if the United States is their objective.

Again, this same theme, and concern there about the debt issue, which is, of course, a huge issue in the relationship.

Mr. MA: The debt issue is very important. But I also get the sense that the Chinese don't necessarily like keep on buying U.S. treasuries, and I think it was just announced today that they now have close to $2.9 trillion in foreign exchange reserves. So that's a huge amount. That's more than half of their total GDP.

It's not in the interest of the Chinese to continue to buy, to hold such large amounts of U.S. debt. But there's also very little they can do about it very quickly or very rapidly.

The notion that the Chinese would simply dump U.S. debt, I think that's basically, there's not a lot of grounding for that argument. It would decimate the Chinese economy pretty badly, too. So I don't see that happening very much.

But I think it will be a slow, gradual process, coordinated process between the U.S. and China to sort of wean off this model, to basically rebalance the global economy, where the U.S. will consume a little less, and the Chinese will consume a little more to pick up the slack.

Now how this process goes, there's going to be a lot of problems, but basically that's what needs to happen for these sorts of tensions to sort of slowly be managed away.

KELLY: Let me just quickly segue to an issue we've touched on, but I want to ask you directly: climate change. On climate change, you see grounds for optimism in the U.S.-China relationship. You see a China willing to compromise. How so?

Mr. MA: I think coming out of Cancun in 2010, it was markedly different from the bitter acrimony that defined Copenhagen in 2009. That was a nasty, nasty conference, especially how it was portrayed both in the media and how it actually happened on the ground.

I think a lot of bitterness happened between the U.S. and China, but I think both countries, including the rest of the delegates of the countries there, decided it was very much worth it to salvage the process, to make sure that it was, you know, it was marked by more gentility than hostility.

And I think everybody wanted to see that this thing does not die. And I think they've laid some kind of a groundwork to move forward to South Africa next year.

And - excuse me - on this climate change issue, it really is very much a complementary thing for the U.S. and China both being the largest energy consumer, also the largest carbon emitter, they'll both probably consume a sizable portion of natural resources around the world.

So I think there's just a lot of common interests there that, if they can execute it, I think would be conducive to cooperation in the future.

KELLY: Okay, we've been talking with Damien Ma, he's a China analyst at the Eurasia Group and a correspondent for The Atlantic. He's been here with us in Studio 3A. Thanks very much.

Mr. MA: Thank you very much.

KELLY: All right, we're going to turn now, to another subject that plagues the relationship between the U.S. and China, and that is the topic of human rights.

This week, The Associated Press published an interview with the human rights activist, Gao Zhisheng, who has been missing for eight months. He described being blindfolded and pistol-whipped, and threatened with death at the hands of Chinese authorities over a 14-month period of confinement. The AP interview was conducted two weeks before he disappeared in April and was not to be released until he went missing, again.

We've got Susan Shirk joining us now from a studio at the University of California in San Diego. Susan directs the Institute on Global Conflict and Cooperation there.


Ms. SUSAN SHIRK (Director, Institute on Global Conflict and Cooperation, University of California-San Diego): Thank you very much.

KELLY: Well, we mentioned here, the case of Gao Zhisheng. Last year, of course, it was the case of the Nobel Peace Prize winner and imprisoned dissident Liu Xiaobo who put China in the spotlight for human rights issues. How big attention do you think this is, in the relationship with the U.S.?

Ms. SHIRK: Well, I think it's a major obstacle. Recently, a senior Chinese official said, you know, you Americans want us to cooperate with you in solving the world's problems, but until you respect our political system, wherein that kind of cooperation will never really be successful. I said, well, that's going to continue to be a problem, because we don't have respect for a political system that acts this way to repress political dissent, in fact, all organized efforts by society that are independent of the Communist Party.

KELLY: I want to bring in a caller who wants to weigh in on this issue. This is Simian(ph) calling from Rochester, New York. Simian, you're on the air.

SIMIAN (Caller): Thank you for taking my call. Yes, I want to pursue the question of human rights, and there are several pieces to the question. I'll be as brief as I can. When I came of age, politically, I was very involved in the movement to secure the release of Soviet Jews who wanted to flee persecution from the Soviet - the former Soviet Union. And one of their main legislative efforts was Jackson-Vanik Amendment, which linked Russian ability to get favored nation trade status with their recognizing the right of Jews to leave. What ways have human rights supporters were concerned about China have today, that are comparable in terms of leveraging American policy towards China and perhaps influencing China's internal policy? And why does China sort of run counter to the natural trend that when a society embraces a free-market economy, they also embrace a more open approach to human rights? And China seems to be an anomaly, and I'm wondering if you had a theory about why that is?

KELLY: Susan Shirk, what do you think?

Ms. SHIRK: Well, as someone who served in government and someone who's been committed to improving human rights in China for a very long time, I've just been very frustrated because the fact of the matter is the international community really has very little leverage when it comes to - especially treatment of dissidents.

Of course, there is so much more individual freedom in China today than there was during the Mao era. The advent of a market economy, of commercialized media and the Internet, have definitely changed society and enhanced individual choice - where you live, your job, the way you dress, your choice of a mate. All of those things used to be controlled by the Communist Party, and they no longer are.

So there's been a lot of progress on the individual freedom front, but the Communist Party is extremely insecure about its survival and power, especially since Tiananmen and the fall of the Soviet Union back in 1989-90. And the internal security police are determined to round up and persecute, throw in jail, all individuals who are engaged in organized efforts to challenge the Communist Party. And that - I don't see any likely likelihood that's going to change any time soon.

KELLY: All right, Simian in Rochester, New York, I hope that answered your question. We are talking with Susan Shirk from the University of California in San Diego, and you're listening to TALK OF THE NATION from NPR News.

Susan Shirk, I want to take one more caller. This is Bill in Boulder, Colorado. And, Bill, I understand you've got a question about international relations.

BILL (Caller): Yes. That's right. Yeah. I've been studying China for 55 years or so, but that doesn't mean I know the answers. But I've been thinking for a long time about Chinese traditional relations, especially militarily, with anybody very far from their borders, in the Chinese record is that they have not been militarily aggressive, unlike many other nations down through history at any distance and whether this kind of attitude may or may not carry over as a lot of things are changing in recent times.

KELLY: Susan Shirk, what do you think? Will that kind of attitude carry over?

Ms. SHIRK: Well, I think not just Chinese tradition, but China's national interests today are to avoid devastating international military conflicts that could derail their internal growth and create domestic political challenges to their rule. So they have every reason, because of the economic interdependence and the fact that they do have so many domestic problems that are the highest priority for them, to really avoid international conflicts, particularly with the United States. That's why many of us have been concerned by this sharper, more assertive rhetoric that we've been hearing from Beijing in the last year or year and a half, and hoping that the Hu Jintao visit next week will provide an opportunity for the Chinese government to recalibrate and to get back on a positive track to show the world that they are truly a responsible power.

KELLY: All right. Bill, thanks so much for your call. I'm going to - we're going to have to leave it there this time. Thanks so much to all of you who've called in on China. And, Susan Shirk, thanks so much for taking the time to speak with us.

Ms. SHIRK: My pleasure.

KELLY: Susan Shirk is director of the Institute on Global Conflict and Cooperation at the University of California in San Diego. She's also the author of several books on China.

Up next, Verizon aims its new iPhone right at the heart of AT&T. We're going to be talking with "Adland" James Othmer about that. Stay with us. I'm Mary Louise Kelly, and you're listening to TALK OF THE NATION from NPR News. Transcript provided by NPR, Copyright NPR.

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