The China Thread

[Zanza]

At a higher cost than the benefits gained by those interests.

The costs for American international deployments are estimated at 100 billion per year or 0.5% of US GDP. Whether that price is commensurate with the benefits America gets is something the American political establishment so far affirmed.

[Eddie Teach]

700 billion for total military spending, such as the weapons and personnel that can be moved to those installations. It's unclear how much this has netted us from favorable trade deals, if any.

[celedhring]

We would probably bend over backwards if the US threatened to pull out of Rota, tbf.

[Zoupa]

700 billion for total military spending, such as the weapons and personnel that can be moved to those installations. It's unclear how much this has netted us from favorable trade deals, if any.

The insane amount given to defense spending in the US has very little to do with favorable trade deals.

[Threviel]

700 billion for total military spending, such as the weapons and personnel that can be moved to those installations. It's unclear how much this has netted us from favorable trade deals, if any.

The insane amount given to defense spending in the US has very little to do with favorable trade deals.

Given the threat of China and Russia the insane defence spending is probably done in Europe rather than the US.

[Eddie Teach]

700 billion for total military spending, such as the weapons and personnel that can be moved to those installations. It's unclear how much this has netted us from favorable trade deals, if any.

The insane amount given to defense spending in the US has very little to do with favorable trade deals.

Right. It's a cock-eyed form of altruism- "we'll be the biggest and strongest so the world will have relative peace and stability", not an investment to be recovered.

[grumbler]

Right. It's a cock-eyed form of altruism- "we'll be the biggest and strongest so the world will have relative peace and stability", not an investment to be recovered.

US defense spending and foreign policy has never been "an investment to be recovered," but a policy system that has maintained a world very much organized in ways designed to benefit US interests. 

Trump-style thinking of it as an investment that has to turn a profit is short-sighted and leads to Trump-style foreign policy decisions that ultimately hurt US national interests.  Abandoning the Kurds to prove Trump's urgent manhood just alienated any potential Kurd-like allies of the US for future operations, and his rush to suck Israeli cock has moved the US hopelessly away from its mediation role in the Middle East.  Trump thinks it smart to turn that role over to Russia (maybe because he's been told to do that).

Treating foreign and defense policy as transactional is the opposite of strategy.  And defense and foreign affairs are the two arenas in which having a strategy are essential.

[The Minsky Moment]

Is there any indication that Biden plans to stop the trade conflict the US started under Trump against Europe?
https://www.washingtonpost.com/opinions/biden-europe-trade-war-negotiate/2020/11/11/1e7e87c6-2440-11eb-8672-c281c7a2c96e_story.html

Did you read the story?  it's about the Airbus/Boeing subsidy cases, which started under GWB and were pursed during the Obama administration.  Both cases were substantially justified under WTO rules.

The US signed its own deal with the Chinese earlier this year and did not align that with the Europeans either.
https://www.nytimes.com/2020/01/15/business/economy/china-trade-deal.amp.html

That was an agreement on trade in goods and services, not investment.  The US discussed a bilateral investment treaty with China but did not sign one.

[Iormlund]

Given the threat of China and Russia the insane defence spending is probably done in Europe rather than the US.

Do you really think China or Russia could occupy Germany, much less France or Italy?

As Grumbler says, military expenses are a result of long-term strategy. And there is no European common strategy. There can't be. We're 27 different countries each with different needs.

[The Minsky Moment]

The reason why investment deals raises security issues is the concern that the Chinese state uses Chinese owned enterprises as a Trojan Horse to gain improper access to Western IP and IT infrastructure. That should be a concern for the EU regardless of what US policy happens to be or indeed even if the US never existed. Since the US does exist and there is an obvious harmony of interest on this issue - as well as an opportunity to increase leverage through collective action - a joint approach seems very desirable for both parties.  It is fair to criticize that the Trump people didn't act cooperatively and that the Trump admin didn't know its collective ass from its collective elbow.  However, given the imminent departure of Trump and his replacement with what appears to be a pro-Atlanticist foreign policy team, the timing here seems particularly unfortunate.

[The Minsky Moment]

Do you really think China or Russia could occupy Germany, much less France or Italy?

Of course Russia has the capability of occupying Germany; its has vastly more conventional forces and total nuclear dominance.  Whether it would want to is another question.

[The Minsky Moment]

IMO its a bit awkward for Europe to present the new administration with an ambitious list of joint initiatives while simultaneously dropping on them a fait accompli on one of the most pressing security issues.

[Sheilbh]

I should clarify - the strategic side of this is really important in my view. But my objection is primarily moral. I don't think it's right to enter into new economic agreements with states when they are building forced labour camps and behaving aggressively towards neighbours. That doesn't mean there should be sanctions on them necessarily and trade may well continue, but I think further integration and agreements should be put on hold until they are dismantling those labour camps and working with their neighbours.

One other thought I have is whether at some point trade policy should also consider climate as well as human rights (obviously we can't because the US) - but I think there's an argument that flagrant disregard of climate should be treated in a similar way as human rights abuses (especially when those human rights abuses support that countries economy and are integrated into it).

Europe relies on the US for defence because thats in American interests, not because of altruism in America. Those interests will not change even with the investment pact. It's not like the Americans align with us when they unilaterally decide to scrap the Iran treaty or withdraw from Syria or Afghanistan.

America doesn't align with Europe because they don't depend on Europe for their defence. And I agree about American interests - that's why I've always thought Europe needs to develop it's own proper defence capability, but that's not going to happen there's no appetite for it.

How does an investment protection agreement increase economic dependency and why is that apparently just a one-way dependency?

Depth and sectors. From my understanding Chinese economic relations with Europe is generally broad based, with a focus that European rules have tried to stop on buying emerging tech companies. While key strategic European sectors rely to a huge extent on China - in particular automobiles and telecoms. I think this agreement is more likely to strengthen or exacerbate that than shift it.

But lets assume we all work.together. What are the concrete steps that these countries should take towards China and how would these be successful, when they supposedly conflict with China's strategy?

So I think there's three sides to it: what is China's strategy? What are the areas where we can and should work together? What are the areas of risk or vulnerability or other red lines that we may have? I think the last two questions are ones that were a coordinated response would work best - so for example I think there are very real advantages to everyone engaging on climate, or on things like global pandemics, or even day to day trade.

My view of China's strategy is that economics and commercial interests are secondary to political goals. At the moment Xi is building what I think will be a successful and quite durable state capitalist model that basically injects a degree of political control into private businesses (not least to control the internal risks of the animal spirits in private businesses), but also to inject some private sector style risk taking and nimbleness into SOEs. But in both cases the commercial/economic is secondary to the political. On a global level there is a desire to in effect make the world safe for that model which is why China is focused on financial centres/nexuses and tech because it either offers them a chance to develop or create the platforms of the future or to influence the rule making/global standard setting decisively. Part of that is through the Chinese state making it easier for innovative private sector companies to access capital (without necessarily taking over), part of it is tech transfers or the mandatory JV structure or buying out innovative foreign companies (again potential through state facilitated funding) and part of it is through Chinese companies providing part of the essential infrastructure of other countries which is then used for political leverage.

I think responding to that is challenging because I think to a large extent it will work and I don't buy the Soviet containment angle which I think is nonsense. But I think there probably is something in working on a common strategy that identifies red-lines, for example, core tech or financial infrastructure - in my view human rights to an extent (i.e. China's an authoritarian state that we will trade and work with like other authoritarian states - building a network of forced labour camps for over 1 million people, based on estimates I think, because of their minority status moves China into a different category at the minute) and develops common protections or responses to that. Also I think a common approach on investment by Chinese companies into strategic sectors would be good. On a more positive scale I think there is an argument for supporting the development of alternative platforms (a little counter-state capitalism) in tech and finance - I think the EU voice would be very valuable given the intention to have ethics-led tech as without the EU it's more likely it will be the American model.

Yes. How does this agreement lessen Europe's clear position for a market based order and how do international obligations that China enters to uphold market based rules not contribute towards it? Is the assumption that China acts in bad faith whenever they promise something? If so, why engage with them at all? Also related to the concrete steps taken as a group together above.

The Chinese leadership regularly breaks international trade and investment agreements. We have had thirty years of experience between the sort of WTO argument of integrating China into treaties and trade agreemements etc. Over the course of thosse 30 years it's clear that China prioritises their strategic and political interests over obligations under treaties or the international "order". That was the case before Xi but is even more the case now. I think expecting China to sign up to an agreement and live up to the "elimination" of forced labour, or transparency around SOEs or forced tech transfers is the triumph of hope over experience. I think the more accurate question is based on the last thirty years of practice in relation to its international obligations, why does the EU think China will comply with these?

And the advantage China gains from that is that it's likely that at least for the next few years the EU will focus on trying to make its agreement "work" rather than building a common strategy with other partners, particularly the US. Right now you have a new administration that is desperate to work with the EU (because that is part of their world vision) and that wants to build a common approach to China. It is likely that the EU is going to focus on making this treaty work for the next four years.

But more important, Europe imposed this artificial deadline which is creating the time pressure and strengthening the incentive to grasp a carrot offered by China. That's why China made sudden, last-minute concessions now. So the question isn't whether the EU should necessarily do a deal of some sort with China, but when they've got a new administration coming whether it would have been better to wait a few months and see what the new administration's view was and whether anything durable could be built or not. From everything I've read coming out of the Biden camp they were placing a big bet on working with the EU to try and rebuild the transatlantic partnership and something wider on China etc. The EU (because of its own deadline) seized the carrot and has decided that going it alone is more likely to advance their goals - I think that assessment is probably wrong, but I certainly think it's premature at this point and makes Europe look weak. And I think Biden will still want to work with Europe but that bet he made may not be worth it anymore and it might make more sense to pick up on Obama's pivot to China and focus on Asian alliances while continuing to draw down the European partnership.

I don't think the irony of the EU using Trump's unilateralism (after spending four years complaining about it) to justify this EU unilateralism weeks before Biden takes office will be lost on him or his advisors.  Is going it alone better than working with other partners like the US? Is it so much better that it's worth agreeing this in principle now (and sending that message to a new administration) rather than waiting a few months to see what the other options are?

By the way, on the tech gap, the reason China could build rivals to the US tech companies is very severe protectionism. Are you arguing for European protectionism here, a great firewall around Europe? That would rightfully be considered extremely hostile by the US as right now, the US has a massive lead there in the European market. If we want emulate China's approach, we would have to scrap GDPR and other privacy related legislation and pool the data of European consumers. Hardly what we want either.

Protectionism is part of it for sure I slightly think that certainty matters too - in AI for example the EU has published numerous papers on ethical AI and has an intention at some point to regulate. But it hasn't got to the stage of actually setting out legal principles. I work with European companies in this area and there is a bit of a fear/hesitancy to really invest too much into this because it's kind of difficult to work out how these ethical ideas work and also which ones are likely to be translated into law. There is more certainty/confidence in the US where you can just do it until it's banned (I'm sure it's more complex than that ) or China which is similar. I think clarity and certainty would really help - especially if it was a little bit in advance or early instead of several years down the line when companies in other countries have built up a huge advantage.

And I'm not necessarily saying that Europe should emulate China on that. There was a really interesting paper commissioned by the Commission () around this that basically said the US model is just pure capitalism and China's model is basically pure state capitalism (i.e. focus is very much on security and tech for national security purposes). The paper's argument was basically that the EU should aim to be a third pole and their vision was basically a values-driven, ethical tech pole - the issue was the EU was so far behind that it might not be able to catch up so in a way an ethical regulatory framework (little bit like GDPR) is also a way that allows the EU some influence because it can maybe impose standards on Chinese or US tech companies. I think there is definitely a possibility that we end up with tech blocs: China, US/Five Eyes plus and Europe.

Without fixing the tech gap though I think it's more likely that Europeans are left choosing between US and Chinese tech platforms neither of which will fully comply with European law or a European ethics-led approach. I think we slightly see this already with GDPR and the social media platforms. I would be surprised if any of them are in any real way compliant with GDPR and if that data isn't hoovered up by the relevant spy agencies - so the question is are you more comfortable with it mainly being American spies and silicon valley techbros or with it being Chinese spies and their equivalent? As I say above I think this could be slightly addressed by working with partners to develop/support alternatives.

[Admiral Yi]

Do you really think China or Russia could occupy Germany, much less France or Italy?

As Grumbler says, military expenses are a result of long-term strategy. And there is no European common strategy. There can't be. We're 27 different countries each with different needs.

Shouldn't the question be can Russia occupy one or more  of the Baltics, given that they're countries you're bound by treaty to defend?

[Admiral Yi]

The insane amount given to defense spending in the US has very little to do with favorable trade deals.

I believe that's Eddie's point.  If you want to dispute it you should take it up with Zanza.