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Tuesday, January 30

The rise of the Purple Team and China's Ponzi scheme

In the last post I quoted Bill Gertz's comments on the Red Team, to which the Red Team would surely snort, "Gertz is Blue Team." The Blue and Red teams, which take their names from colors assigned during China's war games, are on opposite sides of the question: Does China pose a military threat to the United States? The Blue team argues on the yes side and Red says no.

It should be noted that while the teams are simply a way of categorizing the China views of influential American intelligence and policy advisors, journalists, congressionals, and military decision-makers, the disagreements between the teams are not academic.

Since the Nixon era, the Red Team shaped US defense policy toward China and US relations with China. The Blue Team views began to gather steam in the 1990s but in the wake of 9/11 the Red Team managed to reassert their view except at the Pentagon. (At State, Blue Team members are as scarce as hen's teeth.)

The battle lines hardened long ago between the teams, which boils down to calling your opposite crazy in place of reasoned discussion. Then came China's spectacular test of their antimissile satellite. It wasn't just the test itself that sat the Red Team back on their heels; it was Beijing's stony silence about the test and its meaning that alarmed Washington and threw a clinker into Red Team arguments that you had to be madder than a hatter to believe that China posed a military threat to the US.

Finally Elizabeth Economy, senior fellow at the noted cooking school, the Council on Foreign Relations, and director of their Asia studies program, organized a rescue. In a January 25 The Washington Post opinion piece titled China's Missile Message, Economy mixed Blue Team and Red Team views until they came out a nice shade of purple.

If you want to join the Purple Team, how should you be thinking? China's rise as a global power is going to be a big headache for every country and yes, China could pose a military threat to the United States but the best way to handle China is for the United States to become a perfect nation so China has no excuse not to follow suit.

The last is a nod to Red Team's reply to all concerns that China could pose a threat to the US: China can only become a threat if they believe the US perceives China as a threat.

Economy's effort is a typical fusion dish to expect from the cooks at CFR, but I doubt that members of the Red and Blue teams, which view each other as Satan Incarnate, will eat it up. Yet Economy works sound points into her essay:
[...] the truth is that China, with its rapidly growing economy and large population, already exerts an unsettling and often negative impact on the world. China is the largest or second-largest contributor to many of the most vexing global environmental problems, including climate change, the illegal timber trade, ozone depletion and marine pollution in the Pacific. It is squeezing manufacturing industries from South Africa to Thailand to Mexico, placing stress on economies ill-equipped to compete. And its weak public health infrastructure but strict media regulations rank it at the top of potential incubators for the next global health pandemic.

While such effects might be excused as unintentional consequences of China's rapid growth, others cannot be so easily dismissed. China's insistence that it doesn't mix business with politics in its foreign relations, while sounding benign, has the perverse effect of contributing to violence and repression throughout much of the world. Its political and financial support for regimes in Sudan, North Korea, Zimbabwe and Burma, among others, cannot in any way be construed as contributing to global peace and stability. Moreover, China's export of unsavory environmental and labor practices in countries where it is aggressively extracting natural resources has contributed to anti-Chinese demonstrations from Peru to Zambia.
All that and much more about China's threat to the global order is tenaciously ignored by China's apologists. I was struck by that again when I reviewed a portion of a guest blog posted at Simon World in the summer of 2005. I have lost the link, so I will have to look up the author's name and the link and post them later, but here are the passages I find amazing for their blindness to facts on the ground:
I'd like to share a recent piece written by my very first boss, Dr. William Overholt, today director of RAND's Center for Asia-Pacific Policy, on why China's rise is good for the world. Entitled "China and Globalization", he explains in a very pithy, cogent report why the world needs a strong China, and why a weak, unstable China was much worse. As the testimony was for a Congressional hearing, he put it in very simple language that American politicians could understand. He states:

"Before reform, China was the world's most important opponent of globalization. It had an autarkic economy. It opposed the global economic order. It opposed the global political order and the major global institutions such as the IMF and the World Bank. It believed that global disorder was a good thing, and under Mao Zedong it actively promoted disorder throughout the world, including promotion of insurgencies in most of China's neighbors, in Africa and Latin America, and even in our universities. [...]"
Mr Overholt needs to learn the difference between simplification and blowing smoke. Yes, China became a member of the IMF and World Bank -- and then Beijing mounted a policy of undercutting the IMF and the Bank as part of China's policy with regard to other developing nations. And are we to believe that modern China's promotion of repressive regimes and outright dictatorships is preferable to Mao's promotion of insurgencies?

Why is it so hard for US policymakers to develop a clear-eyed view of China? Elizabeth Economy proffers a thesis in her essay:
[...] senior U.S. officials, with a growing list of challenging issues on their China agenda, are reluctant to focus for too long on the reality of China's rise. Doing so would only make cooperation more difficult and provide support to an often obstreperous anti-China lobby in Congress. It is easier to paint China's rise as a work in progress -- one that the United States has the ability to influence.
That's one part of the explanation, but there are several reasons why Washington skids away from objective analysis of China. However, one of Simon World's readers ("Tamquam Leo Rugiens"), in commenting on the Simon World post I quoted, presents some bald facts about China that form the most telling reason of all: studying China with too much objectivity means noticing that Pandora's Box is open:
China is not competing on the level playing field as it claims to be. As long as the vast majority of Chines enterprises are dummy corporations which are in fact wholly owned subsidiaries of the Chinese government market reforms can never truly penetrate their economic system.

Secondly, the level of lying, cheating and corruption endemic to the Chinese cultural system cuts it off from reality based standards necessary to truly become a member of the World Economy. Nobody, and I do mean literally nobody, has a clue as to what is really happening to China's economy. As far as I can see, the whole of the Chinese economy is a titanic Ponzi scheme which will not only devastate China itself, but all those whose economies are linked with it. [...]
You do not want to think about the size of the financial interventions that will be necessary, when the Ponzi scheme collapses.
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