Friday, August 13, 2004
Economic implications: I think inflationary tendency will make a come-back later this year and almost definitely by next spring. With Hu-Wen on the defensive, coastal provinces will once again clamor for more credit. Jiang will support Jiangsu, Shanghai, and Zhejiang's call for looser credit, and Wen will comply. The looser monetary environment, in combination with continual raw material shortage, will generate further inflationary pressure.
By ARTHUR WALDRON and JOHN TKACIK JR.August 13, 2004
At a meeting of the Chinese Politburo late last month, President Hu Jintao informed the comrades around the table that, "if national defense construction is not done well, a secure environment for economic construction can hardly be assured." Economic reform, it seems, is no longer the "central task" of the party.
Some of those assembled may have noted that this sentiment hardly gibed with Mr. Hu's stated belief that China's "peaceful rise" is anchored on economic progress, but there was a good reason for the turnabout. The president had been compelled to read this statement by his predecessor, Jiang Zemin, who can't abide the slogan "peaceful rise."
Instead, Mr. Hu was made to mouth such sentences as: "from beginning to end, we must place national sovereignty and security in first place, resolutely defend fundamental national interests, and resolutely defend national sovereignty and territorial integrity." From here on, the late leader Deng Xiaoping's dictum that economic construction is "the central task," which has guided China's development for two decades, will be relegated second to militarization.
The humiliation was but the latest sign that China's leadership is going through a power struggle, one that brings a danger of escalation beyond China's borders. Alas, Mr. Jiang seems to be winning the day, and if Mr. Hu isn't able to halt the increasingly assertive military policies, serious problems lie ahead. One early victim could be a U.S. foreign policy predicated on China's emergence as a "status quo" power, the favorite phrase of many sinologists. But Mr. Jiang, in his new incarnation, is not a status quo leader.
Chinese who know all these players believe that President Hu and his Prime Minister Wen Jiabao, while not exactly democrats, are chiefly concerned with internal issues such as poverty, corruption, internal unrest, and the like -- and had hoped to turn to them after Mr. Jiang's "retirement." Our own decade of watching the careers of Messrs. Hu and Wen convinces us that they see their country's massive economic and social problems -- and not military modernization -- as the top priority. Both men grew up in modest petit bourgeois homes, both came from families that suffered during the Cultural Revolution, and both were sent to dirt-poor Gansu province for a decade of "work in the countryside" in the 1970s.
By contrast, Mr. Jiang and his closest prot間?in the present standing committee of the Politburo, Zeng Qinghong, are from privileged party clans. The former president, who passed his title to Mr. Hu not two years ago, is calling the shots from the Central Military Commission, trumping Messrs. Hu and Wen's domestic agenda with the nationalism card. To do that, Mr. Jiang is whipping up yet another pointless and dangerous confrontation with Taiwan -- and succeeding in nobbling his ostensible successors.
This seems to follow a script that Mr. Jiang hinted at in the mid-1990s when he told Japan's Asahi Shimbun that, "without the threat of force, peaceful reunification [with Taiwan] cannot be accomplished." Evidently Mr. Jiang thought that if he built up his army sufficiently, Taiwan and the United States would be intimidated. But a bucket of water has been poured over his plans by the firm words from U.S. National Security Adviser Condoleezza Rice and Admiral Thomas Fargo, commander in chief of the U.S. Pacific Command, during recent visits to Beijing. Both made it clear that U.S. arms sales to Taiwan would continue in order to correct the imbalance caused by China's missile buildup. This puts Mr. Jiang in a dilemma. If he pushes ahead, he risks war. But if he doesn't, he must abandon his entire political strategy.
To be sure, the official media still sometimes touts the line that China has embarked on a "peaceful rise" and will not present any dangers to her neighbors. Authored by Hu acolyte and former Central Party School vice president Zheng Bijian, the slogan "Peaceful Rise" was to be the bumper-sticker for Mr. Hu's kinder, gentler foreign policy.
But while the line may sooth the nerves of China's neighbors, it does not describe what Mr. Jiang and the People's Liberation Army have in mind. Just in case Mr. Hu was in any doubt about this, or about who is in charge, at the July 24 Politburo session Mr. Jiang humiliatingly had his successor personally instruct those assembled on the chairman's new military guidelines. Apparently, it was below Mr. Jiang's dignity to take the mike himself.
For the moment, no powerful opposition to Mr. Jiang exists. He and his hard-line faction have been in charge ever since the Communist Party's 16th Congress in November 2002, and Mr. Jiang's support from the Chinese Army is bolstered by his staunch advocacy of military modernization.
This explains why China is now demanding that the U.S. cease arms sales to Taiwan, although U.S. military sales to Taiwan was a condition of normalization in 1979. Japan is getting a taste of China's naval power as Chinese military and commercial vessels conduct seabed surveys in waters that have been in Japan's jurisdiction for over a century.
What is important to understand is that this dangerous approach does not represent a consensus in the Chinese leadership. It is a policy choice adopted chiefly for domestic political reasons, by Mr. Jiang's faction, and should not be imputed to Mr. Hu or Mr. Wen, whatever lip service they may be forced to give it for the moment.
It is essential the United States and democratic Asia work to see that Mr. Jiang's policies fail and that Mr. Hu and Mr. Wen are able to return China to Deng Xiaoping's theory that "economic construction is the central task." And this means they must start pushing back on Mr. Jiang's "Army First Policy."
Mr. Jiang is deeply unpopular for his vanity and selfishness. Even PLA generals are uneasy about the "two centers" of power in the Chinese Communist Party. China has no institutional mechanism for deciding who will be in charge. The army and secret police are strong. But they are divided. The risk is that the split moves downward into society, pervading and dividing every institution.
The best way for America and its Asian allies to push back would be by quietly, but firmly, flexing their muscle around the region. This, for one, might dispel Mr. Jiang's fantasy of an easy conquest of Taiwan. Cooperation on radar and missile defense, closer cooperation with Japan, returning the Seventh Fleet to the Taiwan Strait on a more regular basis, joint air exercises with the Japanese and others and increasing naval sorties and discreet coordination with Japanese and Taiwan naval forces would do the trick -- provided they are backed up by absolutely unequivocal and authoritative statements from Washington that no wiggle room exists here. Peace in Asia and specifically with Taiwan is the indispensable precondition of the Beijing-Washington relationship.
The Chinese leadership, civilian and military alike, must be made to clearly see that provocative military moves -- like the German reoccupation of the Rhineland in 1936 -- will not go unanswered. Only then will Mr. Jiang's fallacies be exposed and a more reasonable leadership take his place, one that understands that belligerence and displays of force gain nothing, while a prosperous, unthreatening, and democratic China would be warmly welcomed into Asia, not least by Taiwan.