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Brzezinski’s G2 Grand Strategy [Copy link] 中文

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By Henry C K Liu

April 22, 2009

The proposal by Larry Summers, former Clinton Treasury Secretary and now Obama’s top economic advisor and Director of the White House National Economic Council, of a multilateral approach with a new group larger than the G-7 rich countries with advanced economies to deal with multilateral global economic problems moves in the opposition direction of the geopolitical call by Zbigniew Brzezinski for Washington and Beijing to set up a new informal Group of Two (G2 – US and China) in a leadership bid to jointly address a wide range of global challenges of bilateral interests.

Brzezinski made his proposal for a US-China G2 in a speech delivered during a conference in Beijing on January 13, 2009, a week before Obama was scheduled to be inaugurated as president, to commemorate the 30th anniversary of the establishment of diplomatic relations between the US and China. The conference was sponsored by the Chinese People’s Institute of Foreign Affairs and the Kissinger Institute on China and the United States, and co-sponsored by the National Committee on US-China Relations, with support from both the US Embassy in Beijing and the Chinese Ministry of Foreign Affairs. Led by former president Jimmy Carter during whose administration diplomatic relations was established, the large US delegation included key figures such as former Republican Secretary of State Henry Kissinger, and former Republican and Democratic National Security Advisers Brent Snowcroft and Brzezinski, who were formally received by Chinese leaders President Hu Jin*- tao, Vice President Xi Jinping and Premier Wen Jia-*bao.

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Unbalanced Relationship

Perhaps reflective of the unbalanced state of relationship between the two countries, the Beijing memorial conference was a mostly unilateral affair on the Chinese side, with no official counterpart observation in the US. The New York Times buried the story in a report on the conference deep in page A8 of its New York edition. Reflective of the depressed state of international trade, the event was cosponsored by Mary Kay, the US direct sale cosmetics maker active in the emerging Chinese market, with attendees each receiving a pink cosmetics bag filled with promotional samples. General Motor, for whom the China car market was the distressed global automaker’s only profitable operation, who normally would have been an eager sponsor, was notably absent, busy fending off bankruptcy with government aid. Also absent were transnational financial giants, such as GE, Citibank, AIG, Goldman Sachs, Morgan Stanley, all mere shadows of their former grandeur, whose luxurious corporate jets would have normally carried their top executives to Beijing in style for events of much less historical and political significance.

In his speech, Chinese State Counselor Tang J-ia x-uan, former foreign minister, recalled the NATO bombing of the Chinese Embassy in Belgrade in 1999 not as evidence of ominous undercurrent, but as proof of how relations between the two countries have survived provocative tension. He also noted some of the still unresolved longstanding obstacles to better relations between the two nations, saying the two sides need to “properly handle issues that concern China’s core interests such as those related to T ai w an and Ti b et so as to safeguard the larger interests of China-U.S. relations”, in contrast to US intransigence on the need for China to adjust its policy on both T ai w an and Ti b et to met US requirements of moral imperialism.

Brzezinski outlined a well-worn laundry list of international problems for which he thinks China could help the US find solutions, such as the global financial crisis, the challenges of climate change, North Korea and Iran nuclear ambitions, India and Pakistan tension and the I sraeli-P alestinian conflict.

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Post time 2009-4-23 08:32:54 |Display all floors

The Group of Two that could change the world

Rescuing the Beijing memorial conference from the fate of a nonevent in the US, Brzezinski attracted worldwide attention by elaborating his G2 idea with an article in the Financial Times entitled: The Group of Two that could change the world.

In the article, Brzezinski asserts that normalization of relations between the US and China “precipitated almost from the start security co-operation that has been of genuine benefit both to the US and China. The effect was to change the Cold War’s global chessboard – to the disadvantage of the Soviet Union. Indirectly, the normalization facilitated Chairman Deng Xiaoping’s decision to undertake a comprehensive economic reform. China’s growth would have been much harder without the expansion in US-Chinese trade and financial relations that followed normalization.”

Commenting on “the current geostrategic status of the US-China relationship”, Brzezinski cites an article in Liaowang magazine (July 14, 2008) published by the official Xinhua News Agency, which describes the relationship as one of “complex interdependence”, in which both sides evaluate each other in pragmatic and moderate terms and in which “the two sides can compete and consult within existing international rules”. Yet the reality of US-China relations is one of unending US provocation and hostility on a compliant China.

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China faces surging protests and riots in 2009

In its January 6, 2009 edition, a week before the conference, Liaowang ran a story that China faces surging protests and riots in 2009 as rising unemployment stokes popular discontent, in a blunt warning of possible tarnish of the image of effectiveness of Communist Party governance from a sharp economic downturn. The uncharacteristically stark report warned that stalled growth could spark latent anger among millions of migrant workers and university graduates left jobless.

Huang Huo, a senior Xinhua reporter and bureau chief in the southwest city of Chongqing, was quoted in the Liaowang report: “In 2009, Chinese society may face even more conflicts and clashes that will test even more the governing capacity of all levels of the Party and government.” Including students who graduated in 2008 and had not found work, there would be more than 7 million university/college graduates hunting for jobs in 2009, Huang calculated, adding that the government’s goal of annual GDP growth for 2009 of 8% would generate only 8 million new jobs for the whole country. “If in 2009 there are large numbers of unemployed rural migrant laborers who cannot find work for half a year or longer, milling around in cities with no income, the problem will be even more serious,” said Huang. By the end of 2008, there were reportedly 20 million unemployed migrant workers in the export sector located in the coastal regions.

President Hu Jintao has set a goal of building in China a “harmonious society”, but the goal is being tested by rising tension over shrinking jobs opportunities and income disparity, as well as simmering public anger over headlines of official corruption and illegal farm land seizures by private developers, all part of the structural social ills that came with three decades of market economy. Chinese Foreign Ministry spokesman Qin Gang asserted that the government was confident it would be able to handle the difficult times. “We have the ability and the confidence to ensure the Chinese economy’s stable and relatively fast growth and to ensure social stability,” he said repeatedly in recent news briefings.

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Post time 2009-4-23 08:33:59 |Display all floors

The Goal of 8% GDP Growth

Yet the problem is less on of sustaining a floor of 8% GDP growth, but where and how the benefits of growth are being distributed.  Xu Shanda, former vice director of the State Administration of Taxation, and a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) told a March 8, 2009 plenary meeting of the country’s top political advisory body that China’s consumer spending has been declining over the past ten years, both when the economy was either overheating or contracting and that more than economic cycles are behind the falling consumer spending.

Xu said the market economy would lead to a structural income gap that suppresses spending, as high-income people tend to invest rather than consume, while low-income people do not have spare purchasing power to spend. The decline in new jobs and consumer spending, which was coupled with increases in the society’s wealth in China over the past 10 years, is another testimony to the trend, Xu explained, urging the government to address such structural imbalances inherent in a market-oriented economy.

Xu called on China to narrow the country’s income gap to stimulate consumer spending. He advised the government to compile income statistics of different groups and routinely announce these figures, making such figures as important as targeted GDP growth and energy efficiency in evaluation of local governments. He also suggested changing the strategy of “keeping prices of farm produce stable” into “working to moderately increase prices of farm produce in the long run” to enhance farmers income and to narrow income disparity generally. Without saying so explicitly, Xu is advocating a much needed income policy for China.

Xu proposed that China should raised the ratio of social security taxes to GDP up to over 10%, to be exclusively dedicated to the social security fund. In the US, the annual cost of Social Security benefits represented 4.3% of GDP in 2007 and is projected to increase to 6.1 percent of GDP in 2035, and then decline to 5.8% of GDP by 2048 and remain at that level. US Medicare’s annual costs were 3.2% of GDP in 2007, or nearly three quarters of Social Security’s. They are projected to surpass Social Security expenditures in 2028 to reach 10.8% of GDP. Together, Social Security and Medicare would take up to 18% of GDP within a decade. And the US is not a socialist economy.

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China needs Full Employment with an Income Policy Financed by Sovereign Credit

In public lectures in Beijing in September 2008 and March 2009, I proposed for China to adopt a full employment objective and an income policy financed by sovereign credit to develop a vibrant domestic market to absorb the sharp shrinkage of its export sector resulting form the global financial crisis. The way for China to use sovereign credit to finance domestic economic development is to free China from dollar hegemony by demanding settlement of its export trade to be denominated in RMB.

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Post time 2009-4-23 08:35:22 |Display all floors

Brzezinski Mistakes China as a Revisionist Power

Brzezinski observes that “a globally ascending China is a revisionist power in that it desires important changes in the international system but it seeks them in a patient, prudent and peaceful fashion. Americans who deal with foreign affairs especially appreciate the fact that Chinese strategic thinking has moved away from notions of a global class conflict and violent revolution, emphasizing instead China’s ‘peaceful rising’ in global influence while seeking a ‘harmonious world’. Such common perspectives also make it easier for both sides to cope with residual or potential disagreements and to co-operate on such challenges as those posed by North Korea’s nuclear program. If we at all times keep in mind the centrality of our interdependence, we will be able to cope with other contentious issues.”

It would be hard put to find any responsible Chinese government official who would describe China today as a revisionist power. Rather, China has been trying to find a path to engage a largely capitalistic world without compromising its socialist principles. It is reasonable to assume that with the bankrupt of the global market economy, China, as with many other countries, even including the US, is beginning to recognize the limits of the market economy to revert back to a balanced application of institutional economics principles.

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