June is Vanquished: More Learning for July

July is next.

I saw a guy with a shirt today, it said: "I can do whatever I want to." Certainly not as true as if he were in other places, but it helps that people are thinking about it.

I went to a lecture last night by David Lampton, who talked about his book, The Three Faces of Chinese Power. Sadly, the books were sold out, so I could not buy one and ask him to sign it. Oh well.

He lectures at Johns Hopkins, and is a heck of a lecturer. Very engaging, like a conversation. I got to sit closest to him, and he had the guts to look everyone in the eyes. Anyway, he started off by talking about a few meetings he's had with the Chinese and American leadership, dinners with Henry Kissinger, and being part of the very first post-Mao diplomatic mission to China. Very cool stuff.

He defines power in three ways: might (using pain to threaten people into doing what you want), money (using economic incentives to pay people to do what you want), and mind (using ideas to inspire people to do what you want). He then talked about how China is hoping to balance all three forms of power in the world--like the US has since the 2nd World War. He also says that this is a China we can live with.

He made some very interesting observations that are of note:
1) The Chinese, of course, sponsor much of our debt, and many Americans worry about this. But they shouldn't. First, the Chinese cannot call back our debt, as many Americans think--the Chinese buy bonds, the US government doesn't go begging for loans. The Chinese can't call in our debt any more than you can demand your CD be paid to you in full three years early. They could sell the bonds off, causing the US dollar to drop even more. But this would hurt the Chinese economically more than the United States; it would completely devalue their own holdings of US currency, it would destabilize their own currency (which is backed by the equity of US greenbacks!), and it would annihilate their particularly precarious export-economy, which depends on a strong dollar and weak Renminbi. So the Chinese could sell these bonds if they were feeling suicidal, but wouldn't get much more than pain out of it. In general, he cites economic interdependence between the US and China, which forces each to listen to the economic and political concerns of the other. He and I agree: this is great.

2) One might think, wait, China's not spreading Communism, what is this mind-power that it's using? Remember that Deng Xiaoping brought a new motto into the Chinese arsenal of slogans, and this one has beat out all the others: "To get rich is glorious." He realized the Chinese were rich everywhere but China, and began urbanizing, globalizing, and marketizing China. And lo! China has started to get rich (so much so that he cites a Feb. 2008 Gallup poll showing more Americans believing that China is the world's leading economic power than the US. A hard claim to back up when the GDP of the US is still more than four times that of China.). Asia is quite excited about jumping on China's "get rich" bandwagon, as is Africa. The European and American notion of paternalistic liberalism just isn't cutting it for countries that aren't already swimming in wealth.

3) The Chinese and American navies should talk more. One of Rumsfeld's key mistakes in an otherwise very good China policy by the Bush Administration has been a refusal to talk to the Chinese military. Gates has changed this policy, and with great effect. The Chinese sphere of influence is growing--we can't stop it, and nor should we. It is expensive to try to patrol the entire world, and why should we do it when China can take care of its region effectively? The Chinese export-led economy depends deeply on a peaceful region full of neighbors that trust it and like it. Their policy of reassurance has gone far to make sure that happens. China wants to secure sea routes (especially the Strait of Malacca, where it gets 90% of its oil) and make sure no force can approach its coast without permission--the large bulk of China's population lives right by the water. It will need aircraft carriers for this, and really, we should take comfort that someone with the means is going to watch over Asia so we don't have to.

I disagree with the Professor that we have to start changing our ways to compete with the Chinese for influence or markets, particularly as a government. We've got a ton of smart kids in business nad international relations, all chomping at the bit to get working with China and the rest of the world. We just need to stop being so terrified and unchain them, let them fly. They'll make the US competitive again.

Anyway, great lecture, lots of fun. I got to have a good conversation with him about Chinese naval expansion, but sadly, the man agrees with just about everything I think. I'm sure there's a lot of data he has that I don't, but I didn't quite feel that my point of view was too challenged. Maybe that means I'm getting it closer to being right.