US and China Outline New Year Policies Affecting Home and Abroad

The New Year has started with immediate action in the Asia-Pacific region and Sino-US relations. On January 1, Chinese President Hu Jintao published a highly charged article in the Communist Party journal Seeking Truth about culture and the threats China faces. On January 6, President Barack Obama stood alongside military leaders to launch his administration’s new defense strategy “Sustaining US Global Leadership: Priorities for 21st Century Defense”. Both events were media spectacles spurring speculation and hype among pundits. Across multiple fronts, the US and China are in a stage of ‘transition’, with the current administrations both facing potential (in US) and real (in China) leadership changes at the end of 2012. The contents of Hu’s essay and the Obama administration’s defense strategy demonstrate the leaders’ mutual need to shore up domestic support and enthusiasm.

For some in the US, Hu Jintao’s essay declared a new ‘culture war’ directed at America, harkening back to Mao Zedong. Hu wrote in the essay and speech: “We must clearly see that international hostile forces are intensifying the strategic plot of Westernizing and dividing China, and ideological and cultural fields are the focal areas of their long-term infiltration.” The Wall Street Journal argued that “Hu Jintao has launched another culture-rectification campaign with goals that Mao would recognize: step up ideological struggle and fight back against Western encroachments.” In a response to US reactions, the Chinese Culture Minister quickly replied by clarifying that 2012’s proposed ‘culture work’ does not mean it will “engage in so-called Great Leap Forward”. Instead, China’s plan is to perpetuate soft power and to promote internal and international stability.

I agree more with Damien Ma’s interpretation in The Atlantic that the ‘culture war’ is not meant as an implicit threat to the US. Rather, it is “part of a battle to sustain the confidence of its own people – via nationalist, Confucian tenets, wealth, cultural renaissance or whatever substitute that can be dreamed up — or risk the consequences. The war is, and has always been, about defining the soul of the modern Chinese nation.” Furthermore, the warnings are a call to the Communist Party to remain relevant to China’s populace. The forthcoming political transition at the end of this year and the Chinese population’s growing benefits from economic and technological development led to a fear of waning power and influence. Building on nationalist sentiments and stirring up the public by flexing its diplomatic muscle is one way for Hu’s Administration to calm its nerves.

Meanwhile in the US, the Budget Control Act of 2011 mandated that the Pentagon budget be trimmed by “by about $487 billion in the next decade, a roughly 8 percent decrease.”* The recent Defense Strategy Review is an attempt to redefine America’s strategic interests and goals, and to focus on priority areas for future funding. As the US reaches the last year of President Obama’s first term, withdraws military forces from Iraq and deals with a continuing government budget and wider economic crisis, the country faces a point of ‘transition’ which makes the time ripe for this discussion. By surrounding himself with top Pentagon officials, President Obama tried to strengthen his stance against an unwieldy Congress and direct an image of authority in an election year. The need to reduce the budget was evident on every page of the report, with the key being “Whenever possible, we willdevelop innovative, low-cost, and small-footprint approaches to achieve our securityobjectives”. (p. 3)

Interestingly, at no point in President Obama’s defense policy launch did he mention China. The Defense Strategy Review, on the other hand, warned that China’s emergence could affect the economy and security of the US in a number of ways depending on the path taken. Additionally, China’s military power growth “must be accompanied by greater clarity of its strategic intentions in order to avoid causing friction in the region.” In a menacing tone, the Review said the US would “continue to make the necessary investments to ensure that we maintain regional access and the ability to operate freely in keeping with our treaty obligations and with international law.” (p. 2)

As you can see, budget reductions are a priority, but they do not stand in the way of military readiness and competitiveness. In an effort to sound practical, the Review argued for a reduction in the “cost of doing business”, to which many Americans would agree. However military personnel have sacrificed much over the last decade and will bear the burden of budget cuts: “As DoD takes steps to reduce its manpower costs, to include reductions in the growth of compensation and health care costs, we will keep faith with those who serve.” (p. 7) Cutting health care benefits from veterans has not been as controversial as one may think in Congress however unpopular it may be to the American public; hopefully, this move is not foreshadowing irrational motives sparked by China’s emergence.

As Presidents Obama and Hu pit tough rhetoric against each other to hold or challenge the balance of power, they also seek to prove dominance to their domestic populations. Competing party and government politics have been the main driver of their warnings and stern tones. Economically, China and the US are so interdependent that the leaders’ domestic pandering should not affect their strategic relationship; the US in particular finished 2011 with a negative stance toward China, causing international headaches. But both powers share the mutual interest of stability, and while the US has less concern for other states’ sovereignty than China, the Obama Administration should prevent domestic issues and government in-fighting from leading to a dampened bilateral relationship.

Last year was, and no doubt 2012 will also be, a busy year for Sino-US relations and multilateral cooperation in the Asia-Pacific. On January 7, US Assistant Secretary of State Kurt Campbell arrived in Tokyo to discuss the situation on the Korean Peninsula and said “Even while the United States is making an adjustment in its global military posture, we are intent on maintaining a very strong, enduring military presence in the Asian-Pacific region”. China, likewise, intends to increase its diplomatic efforts this year and boost cooperation in the Asia-Pacific in issues of mutual interest; China’s government is anticipating high-level meetings such as the “Seoul Nuclear Summit, the BRICS Summit in India, the Asia-Europe Meeting in Laos, and the East Asia Summit in Cambodia”. During these meetings, China plans to “enhance strategic coordination and mutual understanding with Asian countries”. With both China and the US boosting diplomatic efforts in the Asia-Pacific, the hope is that eventually the two powers will forge a more cooperative and mutual partnership together instead of solely other neighbors.

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A Hopeful ‘Turn’ Toward 2012

A series of critical events compelled the US to turn its attention toward the Asia-Pacific region in 2011. Natural disasters, leadership changes, protests, power struggles, China’s rise and American influence led the headlines. This tumultuous year foreshadows an eventful 2012 for those with interests in the region. Looking forward, states and their citizens should be prepared for continued political, economic and environmental disruptions.

Gripping Natural Disasters:

  • Flooding in Australia, Philippines, Thailand
  • Earthquakes in Japan, New Zealand
  • Water shortages in Tokelau and Tuvalu

Top Political Occurrences:

  • Death of Kim Jong Il and uncertainty for the future of the Korean Peninsula
  • Burma’s election of civilian government and promise of future elections with participation by Aung San Suu Kyi
  • China’s Peaceful Development white paper release
  • Disputes in the South China Sea
  • Political standoff in Papua New Guinea

Key US Initiatives:

  • President Obama and Secretary Clinton’s trips to the Asia-Pacific for bilateral and multilateral meetings
  • US ‘turn’ toward Pacific and “forward-deployed diplomacy”
  • Renewing and affirming alliances with Australia, India, Indonesia, Japan, Malaysia, Mongolia, New Zealand, Philippines, South Korea, Thailand, Vietnam

Strides toward bilateral and multilateral cooperation in trade and security have been taken in 2011 in the Asia-Pacific region. ASEAN and APEC are coming into their own, and the ASEAN Community has much to look forward to. Despite Canada leaving Kyoto, there is still hope for international climate agreements with the US, China and India beginning to accept their responsibilities. Furthermore, free trade agreements and regional trade agreements continue to gain momentum; the growing list of countries participating in the Trans-Pacific Partnership is a signal of the importance of regional trade and plans for continued growth.

International cooperation can appear to be wishful thinking with growing resource insecurity, continued border disputes, periodic political instability, increasing natural disasters and renewed aggressive rhetoric from the US and China. However, economic, political and social progress demands increased cooperation. Hopefully China can use its influence in the region and alliances with countries like Burma and North Korea for good rather than aiding authoritarian leaders in their maintenance of power and in the exploitation of natural and labor resources. Popular movements in the region, spurred on by current injustices, are also providing pressure for change from the bottom up. Together, these events could have a powerful impact on the plans for greater regional integration, security cooperation and economic development. Hopefully 2012 will be a year of cooperation for mutual benefit for the people of the region.

Biggest Polluters Sign on at Durban Climate Talks

 After nearly two weeks of United Nations climate talks in Durban, South Africa, a last-minute agreement was reached which proponents deemed an “historic breakthrough to save the planet”. Nonprofit organizations, politicians and others which lobbied for strict emissions cuts with consequences and a clearer roadmap, on the other hand, denied that a real “deal” was reached, claiming the delegates “watered things down so everyone could get on board” and even that it was a “failure”. In the final moments of the meeting, the ‘Durban Platform for Enhanced Action’ was delicately worded so all countries could accept the legal form, however begrudgingly. The big news is that China, India and the US – the three largest greenhouse gas emitters not covered under Kyoto – finally accepted that the rest of the world (including the climate) could not wait any longer for them to act and to be held accountable.

The US has typically been against signing onto any legal framework or targeted emissions cuts unless China and developing nations also take part. China has argued that it is still a developing country and should not be held to the same emissions standards as the US and Europe while it continues industrialization. However, the European Union and smaller countries (particularly those that will be significantly impacted by climate change) grew tired of the lack of participation by the world’s largest emissions emitters, and coerced China, India and the US to agree on language that would give all parties mandates for compliance. The Platform constrains all parties to “a protocol, another legal instrument or an agreed outcome with legal force” to be decided in 2015 and that will come into force in 2020. For those countries most impacted by climate change, the long wait for enforcement in 2020 will not be soon enough to mitigate droughts or floods, or to save some small islands states (which are plentiful in the Pacific) from rising sea level.

As the “only binding climate instrument with specific emission targets”, the Kyoto Protocol commits the worst emitters to reduce emissions, with a heavier burden placed on developed countries. As the Kyoto Protocol is due to expire next year, the Durban talks kept the agreement alive, with the EU agreeing on a second commitment from 2013 “so that the world has a legal treaty to cut emissions in place before 2020”. The EU has taken pride in their leadership role in reducing emissions to mitigate climate change, even when Canada, Japan, Russia, and others are not ready. The European Parliament’s environment committee chairman suggested that the US and China have been playing a “ping-pong game” which “hijacked” the past three climate meetings. Nonetheless, the Europeans believe their diplomatic efforts have successfully put China, India and the US on “a roadmap that will secure an overarching deal”.

The ‘roadmap,’ will take time to develop. Between now and 2020, only Europe and a few developed countries “are legally bound to cutting carbon emissions through a second commitment period of the Kyoto Protocol.” Given that the economic crisis has made many Americans feel that climate change is no longer an important issue it is difficult to foresee the US following through and signing onto an eventual legal framework. Meanwhile China, India and the US only have voluntary targets to follow until 2020.

Clinton’s Travel to Myanmar Leaves Little Room for Controversy

Albeit on short public notice, Secretary of State Clinton’s quick trip to Burma/Myanmar was highly anticipated in policy circles. Commentators asked what would she accomplish, why should she go, and what did she achieve? Overall, many of us reached similar conclusions:

• Clinton’s trip was timely given the policy ‘turn’ toward the Asia-Pacific;

• It signified a positive boost for President Thein Sein’s actions toward reforms;

• There is need for greater and unique engagement;

• Three key issues remain unresolved – release of all political prisoners, violence among different ethnic groups, and uncertain relations between Myanmar and North Korea.

More than just to provide counter to China, the US seeks to make a lasting impact in Myanmar’s political situation. In one of her statements, Secretary Clinton said that “the United States wants to be a partner with Burma” and “we want to see this country take its rightful place in the world.” Furthermore, the US wants to assist Myanmar “to build the capacity of the government”.

Officially, the US policy is “principled engagement and direct dialogue as part of” a “dual-track approach”. The call for a “new conditional normalization” by CFR scholar Joshua Kurlantzick is premature. Kurlantzick writes:

Working with other industrialized democracies, the United States should be prepared to provide a large new aid package, upgrade relations, push for Myanmar’s reentry into global organizations, and potentially end sanctions—if, in return, Myanmar continues to move toward holding free elections, ending its insurgencies, and demonstrating real transparency about its weapons programs.

The goal of “conditional normalization” is to “prevent instability…stop Myanmar’s development of nuclear programs; and help promote democratization”. This policy turn would be a stark difference to past public declarations and policies, and however noble it is too early for implementation.

One would like to think that the situation in Myanmar is unique, and with just a bit of prodding the country can turn into a fledgling democracy with a vibrant export-driven economy. For all its intricacies and potential, however, it was not long ago that Buddhist monks were being imprisoned or killed for protesting, Aung San Suu Kyi was under perpetual house arrest, and other severe human rights abuses were going unrecognized by the international community (through lack of official UN resolutions or condemnations). The civil society sectors to which Clinton pledged funding have been few and far between or historically corrupt (due to channeling of money to the government first). A positive pathway for engagement to improve the level of human development is through the Lower Mekong Initiative, which includes Cambodia, Laos, Vietnam and the US; Clinton invited Myanmar to the program, and if nothing else it could enable better coordination for disaster relief and climate-related issues.

Key Stays In, Goff Out. It’s a good time to be Green or NZ First.

John Key and the National Party received a commanding result in last Saturday’s election in New Zealand, obtaining its best election result in 60 years with 48 percent of the vote. Now with 60 seats in Parliament, National seeks to form a government with several minor parties to increase its legislative power. Support for Labour declined to 27 percent of the party vote, landing them an estimated 34 MPs. In addition to the strong “mandate” given to John Key and National, the lead story out of NZ is the results for minor parties and the voter approval of MMP at the referendum. 

With a diverse Parliament, coalitions are being built and parties are strengthening their positions. After being out of government for the past three years, New Zealand First made a surprising comeback, gaining an estimated 6.8 percent of the party vote and 8 MPs. The ACT Party was touted to surge with Don Brash as its new leader; however following the election of just one MP and failing to meet the party vote threshold, Brash resigned in shame. The Green Party obtained an estimated 10.6 percent of the party vote, giving them 13 MPs; after special votes are counted, the Greens are likely to have 14 total MPs, 5 more than the previous election.*

United Future’s Peter Dunne retained his party’s sole seat; as with the ACT Party, the loner MPs have been sought after by National for a coalition to add to its majority. The Maori Party won 3 reserved seats, and will also be courted by National.

The sale of state-owned assets has been a contentious issue, and most minor parties are against the idea except ACT, National’s closest partner. It will be the issue to look out for over the next three years, as Parliament is split almost in half (61-60) for or against selling public assets. The New Zealand Herald website has a useful map of Parliamentary seats.

Voter turnout lowest percentage in 120 years

Had more Kiwis turned out to vote, the election results might not have been so stark. According to estimates, one million eligible New Zealanders did not make it to the polls for this election.

“Turnout dropped by just over 90,000, from 79.5 percent of those on the rolls in 2008 to 73.8 percent. Overseas votes included in this total plunged from an estimated 32,000 at the last election to 19,527.”*

Election watchers credit this drop in voter turnout to two primary factors. First, youth voters continue to be apathetic and do not comprehend how the election affects their lives. Second, early polls showed an easy victory for National and drop in support for Labour, keeping supporters of both parties at home. Additionally, Labour’s lost votes are likely due to increased support for the Greens and New Zealand First. Given that the Greens typically poll better overseas, the drop in overseas voting may have hurt their chances to have an even stronger presence.

ASEAN, People of Burma, UN, US – Everyone wants a bit of Burma

Tensions in the South China Sea, China’s currency, American troops in Australia and opening markets have all been significant news stories over the course of the APEC, ASEAN and EAS meetings. Amidst these events one evolving story could have a unique impact on bilateral and multilateral relations in the Asia-Pacific. Over the weekend in Bali, US President Barack Obama announced that Secretary of State Hillary Clinton would travel to Burma. Set for the first week of December, Clinton’s trip will be the first visit by a US Secretary of State in 50 years. The recent announcements in favor of engagement with Burma led to a flurry of events and discussions which will hopefully ultimately signal a more open and peaceful Burma.

Since becoming the first civilian president of Burma in fifty years in March 2011, President Thein Sein steadily proceeded with national democratic reforms and attempted to gain greater legitimacy among members of the international community. The current leadership of Burma (now Myanmar) understands the importance of domestic and international legitimacy, especially given the events of the Arab Spring and global Occupy movements. By releasing Aung San Suu Kyi from home detention, allowing the National League for Democracy to participate in elections, releasing hundreds of political prisoners, attempting peace with ethnic groups and seeking to host ASEAN in 2014, the Burmese government has garnered potential conditional support of the US government, United Nations and ASEAN members. President Thein Sein was seen smiling and answering to reporters over the weekend, a sign he’s getting the hang of being less guarded and more open.

It is possible that President Thein Sein and his government’s recent concessions including halting work on an unpopular dam and passing a law that enables workers the right to strike were pursued to maintain power and prevent massive civil unrest. The situation in Burma, including the human rights abuses that occurred, failed to reach the agenda of the UN Security Council due to China’s veto and its respect for state sovereignty. Now, however, times are changing and UN leader Ban Ki-Moon welcomed “just as ASEAN did, the recent developments in the country under the leadership of President Thein Sein”. Given the “flickers of progress” in Burma the goal of Secretary Clinton’s trip will be “to test what the true intentions are, and whether there is a commitment to both economic and political reform”.

Developing a more hospitable domestic environment and international relations will be critical to improving human development indicators, lifting Burmese out of poverty and creating a safer East Asia. At one point Burma’s isolationism was akin to North Korea’s, and there were even worries about sales or transfers of weapons and what that might mean for the region. As a former ‘problem’ child for ASEAN, Burma appears to be shedding its incessant cling to Chinese leadership and influence; now that President Thein Sein and the government has been given a confidence boost, the next few months should provide a useful path for improvement; in particular the international community will closely watch the December by-elections and the role that the NLD is able to play.

Business and Labor Mobility in the Asia-Pacific

On November 12, 2011, US President Barack Obama signed a bill into law which enables US citizens to join the APEC Business Travel Card (ABTC) scheme. The US already provides a ‘fast lane’ for entry for ABTC members, and the timing of America’s entry into the system is fitting given progress toward the Trans-Pacific Partnership and the recent and upcoming multilateral meetings in the Asia-Pacific. This weekend, other complementary initiatives are being launched as part of the APEC Travel Facilitation Initiative. But what is behind these initiatives, and who will they benefit? Are they stepping stones toward greater regional integration or another advantage for businesses?

According to the Business Mobility Group, the ABTC was originally developed “in response to the need for business people to gain streamlined entry to the economies of the Asia-Pacific region,” and “enables business people to explore new business opportunities, attend meetings and conduct trade and investment activities”. The main benefits are:

• “Fast-track entry and exit through special APEC lanes at major airports, and multiple short term entries to these economies for a minimum of 59 days stay each visit (click for details).

• No need to individually apply for visas or entry permits each time you travel to any of the participating APEC economies as the card is your visa.”

After trials in the late 1990s, countries have continued to sign onto the scheme, and the group now includes the following: Australia, Brunei Darussalam, Canada (Transitional Member), Chile, China, Hong Kong (China), Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, PNG, Peru, the Philippines, Russia (Transitional Member) Singapore, Chinese Taipei, Thailand, the United States and Vietnam.

A study by the Policy Support Unit (“an independent research unit at APEC”) found that those who participated in the scheme cut down on their transaction costs and saved time and money in their visa process. The target audience of the Mobility Initiative is explicit in its title: business. By saving time and money during repeated business travel to and within the Asia-Pacific, participants may be encouraged to travel even more frequently and create more business opportunities in the region with greater ease.

However, there has been no significant effort for greater mobility of permanent workers. There are several successful guest worker programs in the Asia-Pacific (primarily in Australia and New Zealand with Pacific Island nations), but each state maintains their own labor and immigration standards which conflict with the idea of a more mobile Asia-Pacific workforce. Oceania has the highest share of migrants than any other region, with 15 percent of residents in 2005 followed by North American with 13 percent. More specifically, 24 percent of residents in Micronesia were migrants in 2005, followed by 20 percent of residents in Australia and New Zealand.*

Despite movements toward closer economic relations through the Trans-Pacific Partnership, bilateral trade deals, and easier travel and access for business people around the Asia-Pacific, migration policies are yet to be coordinated in a way mirroring the Schengen Zone in Europe. Rather, countries prefer to create a global supply chain that links labor within their own countries, enabling them to better control the workforce and allowing the more powerful economies to dictate what industries are affected by ‘free trade’. In 2007 ASEAN states signed the Declaration on the Protection and Promotion of the Rights of Migrant Workers, but the agreement is not legally binding.

The UN Human Development Research Paper “Migration in the Asia-Pacific Region: Trends, Factors, Impacts”, by Phillip Martin, contains key points about migration in the region:

• “Most Asian nations receiving migrants have policies that aim to prevent migrants from settling, most do not consider migration essential for economic growth, and most do not want immigrants to change their culture and identity.

• Migration policies in the major Asian receiving countries can be framed by a triangle, with countries such as Singapore welcoming foreign professionals to settle and rotating less-skilled foreign workers in and out of the country, Japan allowing the employment of foreign professionals but remaining largely closed to less-skilled foreign workers, and the Gulf countries dependent on migrants to fill most private sector jobs.

• With migration restricted and considered temporary, there are few institutions developing data and long-term migration options or promoting regional dialogues to improve migration management.” (15)

The report points to factors motivating out-migration as well as the migration policies of the major labor-sending countries of the Asia-Pacific region:

• “Many Asian nations want to send more workers abroad to reduce joblessness, generate remittances, and accelerate development. Many governments have created agencies to―market their workers to foreign employers.

• Migrant-sending governments are also concerned about the rights of migrants, and many have agencies to regulate recruiters, prepare workers for overseas jobs, and look after migrants while they are abroad.

• Most governments measure the benefits of migration by the number of migrants going abroad and the amount of remittances received. These measures may not reflect progress in human or economic development that will make migration unnecessary in the future.” (34)

“Most international labor migration in Asia involves workers moving from one Asian nation to another for temporary employment” and “a culture of migration reportedly prompts many children to plan to follow their parents abroad to work”.* Moreover, remittances are an essential part of some states’ economies and provide uneven social and economic benefits. In the same way that business travel has been critical to creating avenues for state relationships and closer economic ties, real labor mobility will become critical to citizens’ ability to be lifted out of poverty, to experience unique opportunities or to create a new life for their families.

If businesses can readily have access to new markets and laborers, there should be reciprocal opportunities for laborers at different levels to have less constrained access to new employers and industries. International labor migration has accumulated a lot of baggage over the years despite its typically short-term or short-distance travel (primarily due to guest worker programs). A new generation of workers believes they are entitled to greater mobility given the ability of multinational corporations to create a base for influencing the economic and political structure of their countries. The APEC Business Travel Card scheme and others incorporated into the Business Mobility Initiatives demonstrate forward-thinking programs that move in the right direction; however for real progress to be made corresponding steps should be taken to make mobility more equitable.