The horizon is not so far as we can see, but as far as we can imagine

Category: Japan

The Solution to The USA’s Taiwan Dilemma

“The empire, long divided, must unite; long united, must divide. Thus it has ever been.”

三国演义 ~by Luo Guangzhong

Earlier I promised to post my plan to prevent a war between the United States and China over Taiwan. I’ve traveled and met with Taiwanese diplomats. They are some of the most sophisticated operators I’ve ever encountered. Taiwan is a highly advanced technological country. Very wealthy, with a sophisticated full coverage heath care system and a vibrant democracy. Furthermore, based on the Shanghai Communique issued on February 27, 1972 by Nixon and Mao, both mainland China and the USA formally acknowledged that “all Chinese on either side of the Taiwan Strait maintain there is but one China”.

The Communique goes on to state the US side does not accept a violent solution to the unification of the two parties and the Chinese side retains the option to violence if Taiwan ever declares independence, paraphrasing here, folks. It’s been a long time since reading my Kissinger.

Conversely, I have traveled seven times to China. Here is an idea most Americans will probably never understand. China’s potential to utilize enormous amounts of soft power is profound. This is based on China’s circular view of history and that China has been invaded and ruled by foreign powers many times in its history. In each and every case China has overcome said invaders very differently than the way the Russians have. Or anyone else for that matter. Where the Russians trade space for time to husband their resources for a great counter attack and push the invader out of the country, China seduces the invader, with its ancient, deep, amazing and incredibly seductive culture. I cannot emphasize enough the depth, breadth, and tantalizing sophistication of its culture, be it material, artistic, political or spiritual. I do, after all, practice Chinese Chan Buddhism in my own life. Every time China has been invaded and completely taken over by a foreign power this strategy works. Even today we’re watching Chinese movies on Netflix. That is the use and export of soft power. And unlike America, that has only 250 years of history to draw upon its soft power, China has almost 4000 years of history to draw upon. The efficacy of Chinese soft power is not to be underestimated. It is indeed seductive.

Now the question moves to goals and intentions. And here an understanding of Chinese history can aid us in a better understanding of the present Chinese leader, Xi Jing Ping.

What are Xi Jing Ping’s true goals? Simple, he seeks membership among the greatest of Chinese emperors. The greatest of Chinese emperors are judged by a single metric: did they unify all of China? As the opening sentence of the great Chinese novel, The Romance of the Three Kingdoms, I quoted at the beginning of this essay, unification is the way the Chinese see themselves when in a golden age.

This compulsion to unify all of China is the defining source of Xi’s ambitions. And that means Taiwan. Taiwan is the last remaining province of a fully unified China. China equal to that ruled by the Qin Shih Huang Di, the very first emperor to unify all of China, or the great conqueror Han Wu Di, or Li Shimin of the mighty T’ang or Zhu Yuanzhang of the wall building Ming. It is to this rank of Chinese men that Xi aspires.

What should America do? I have spent a lot of time thinking about how to avoid a war with China that most people are certain is inevitable. They call it the “Thucydides Trap.” But, if the study of history has taught me anything it is that nothing is inevitable, contingencies matter, and human agency means the most. We may live in a complex adaptive system, but nothing, nothing is inevitable. Therefore, America must find a way tone down its arrogance and find a way to peacefully unite Taiwan with China.

Here is how I would do it if I were president.

First, I would engage in a series of CBM’s (Confidence Building Measures in diplospeak) with Xi Jing Ping regarding our naval stance in the Straits of Taiwan. I would make it policy that no American naval ships traverse the Straits of Taiwan any longer. Then I would halt the sale of advanced weapons to Taiwan.

Second, I would begin preparing the Taiwanese to consider peaceful unification with the mainland along the lines of the British handover of Hong Kong to China in the 90s. I would make it clear that we would not consider unification unless Taiwan was allowed to keep its democracy, and democratic traditions for a minimum of 80 years. I would do this to assuage the Taiwanese about a possible authoritarian takeover of the island in the case of unification. China did one nation, two systems successfully once before. They can do it again.

Third, I would secretly engage Xi Jing Ping with the following proposal: the United States of America would fully encourage and accept the unification of Taiwan with the mainland under the following conditions. Number one, Taiwan would have three representatives on the politburo, one of which would be a power ministry, either interior, defense, or foreign affairs. My fallback position, which is my true goal of course, would be the acceptance of two politburo members from Taiwan, but I would not relent on one serving as a power minister in one of the three ministries aforementioned.

I am relatively certain that Xi and the current politburo would agree to this proposal. It would serve to put Xi in the exhalted ranks of Chinese leaders in which he craves to be included. Mos timportantly, it would not harm a single vital national interest of the United States. The Chinese might have a salient in the first island chain, that being the island of Taiwan, but the United States would still have Korea, Japan, Okinawa, and the Philippines. Not to mention the defenses in depth that the second island chain provides us in the Pacific ocean. Much less the great fortress of the third island chain of Midway, Wake and Hawaii. Defenses in depth matter much more than a salient in the first island chain.

Now, I recognize this goes against every national security intellectuals thinking. It is completely contrarian. But the more I’ve thought about it over the last few years the more I believe that is the best way to avoid general warfare between two nuclear great powers from the Straits of Malacca to the South China Sea and into the deep blue waters of the Pacific.

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Japan and South Korea Agree China Will Rule SE Asia

Well, the headline says “South Korea needles Tokyo with military drills around Japanese-claimed islets,” but when one reads the story one sees:

Days after Seoul scrapped intelligence-sharing with Japan, all branches of its military descended on a handful of disputed islets for two-day drills, raising ire in Tokyo and fueling a brewing trade conflict between the neighbors.

The basic truth is that the days of the Pacific being an American lake are coming to a close. China is the 800 pound gorilla. As Yang Jiechi said, “China is a big country and other countries are small countries, and that’s just a fact.”

So if the small countries don’t want to be ruled by China the way that Canada, Mexico, and most South and Central American countries are, they need to work out their differences and band together.

That is especially true for the two most powerful countries after China: Japan and South Korea.

If they can’t, well, welcome to vassalage as the Middle Kingdom rises.


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Japan refuses to eliminate agricultural tariffs, and spikes the TPP (Take 2)

The Trans Pacific Partnership trade agreement in in trouble, and one of the reasons is Japan has refused to eliminate agricultural tariffs.  Japan is entirely correct in this.

Japan’s agriculture is not efficient: it costs more to grow food in Japan than it does in many other nations.  If Japan removed its tariffs, its agricultural sector would either be eliminated or forced to consolidate and specialize in crops it has a comparative advantage in.  Whatever these are (perhaps silk), they wouldn’t be staple food crops.  Japan would thus lose what ability it has to feed itself and would have to buy even more food on world markets than it does today.

Regular readers will recognize this pattern from the article on why the third world is even more impoverished today than it was 40 years ago. Now Japan is by no means a third world country, and money would be loaned to it to buy said food, but Japan is not a healthy economy either.  The Japanese recently lowered the value of the Yen significantly, and  their exports didn’t increase.

Contrary to economic dogma that sort of thing happens fairly often: people simply are already buying as much of what Japan makes as they want.

Japan is not what it was 30 years ago, or even 10.  It runs an export deficit and it is barely running a current account surplus any more . Even when the economy was healthy, having to buy much of its energy was painful, having to buy its food would be even more so.

But more importantly, it would make Japan vulnerable to anyone who controlled foreign currency loans they need to buy the food, and to the major food producers.  Japan can print money, to be sure, and has, but there comes a point where you can’t, where people won’t take it.  Japan isn’t there yet, but they risk being there someday soon.  And bear in mind that as global warming bites, food will become more and more scarce. Right now we have a huge food surplus, that will not remain the case.

Countries which cannot produce what the rest of the world needs, nor produce what they need, are always in great danger from other nations which can cut them off.  They give up power over their own fate, and others will take advantage of it to force them to do as they wish, including opening up their markets to allow the commanding heights of the economy to be purchased.

Japan has been badly run for decades, and made the same mistake the US did when its bubble collapsed: they did not wipe the debts off the books, but instead extended and pretended.  That lead to the long “bright depression”, but it is now leading them into a much worse period.

They are, however, doing something right in refusing to remove their tariffs.  To be sure, they are doing so for domestic political reasons (the small rural farmers are politically powerful), but that doesn’t mean it isn’t still the correct thing to do.

Since the TPP is, overall, a terrible trade agreement (they virtually all are) let us hope the Japanese stick to their guns and that it does scupper the agreement.  It’ll be best for them, and for us.

(An earlier article on the same topic disappeared except for the title.  This is a rewrite, but with additional detail.)

(Article changed to indicate that Japan is still (barely) running a current account surplus, not a deficit.) -10/14/2014)


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What Japan’s Change In Government Means for the US

US China Japan Trade Deficit

US China Japan Trade Deficit

The new government has indicated it will move towards economic integration in the far east, and away from close economic integration with the US.  These two charts  tell you why, and what it’ll mean for the US.

Japan has spent a lot of money keeping the Yeb low against the dollar in order to export to the US.  Think Japan believes its getting its money worth, when China is eating its lunch on exports to the US?  The strategy worked for decades, but it isn’t working any more, indeed this year the Japanese had their first annual trade deficit in 28 years.  But unlike last time, this one comes when the “keep the Yuan low and export to the US” strategy has been in a multi year decline.

china-us-national-debt-holdings-by-lillith-newsJapan is going to be a lot less willing to finance US deficits and consumer spending than in the past, and economically it is going to be looking much more to other Asian nations.

In the long run this isn’t bad for the US.  In the short run, it’s going to hurt.

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