Jim McGregor Gives Obama’s China Team Thumbs-up
After a meeting in D.C. with administration officials talking China policy, here’s a summary from Jim (I omitted the intro — full text is on the JLM site):
The Obama administration officials who served under Clinton — and sat on the sidelines watching Rumsfeld and Cheney for the past eight years — have taken the lessons of these previous administrations on board. While they aren’t naïve about not being soft on China, they know that very focused and strategic engagement with China is the only route this administration can take. It looks like the Obama administration will waste less time than the Bushies did prattling on about China’s currency exchange rates. While the National Association of Manufacturers and some other Washington power players still want to harp on that, the Obama folks realize that pushing that issue is a non-starter. China has already appreciated its currently by some 20%, and they don’t mind discussing that issue with U.S. treasury officials and trade negotiators because it is something that can be talked about endlessly without leading to any concrete actions.
I believe that the Obama administration will be much more focused on the issue of real importance for U.S. business: protection of intellectual property rights. By wasting so much political energy and cabinet-level rhetoric on currency, China has had a relatively free pass on IPR protection in recent years. And this isn’t about movies and music. While Hollywood may be unhappy with the $1 DVDs sold on nearly every street corner, the real issue is industrial theft. Whether it is the copying of entire automobiles or electronic components, data servers, manufacturing processes or any sort of software, China has been picking the pocket of global businesses for too long. It has now gotten to the point that China is hurting itself. Chinese leadership is pushing “indigenous innovation,” but Chinese entrepreneurs and companies don’t have any incentive to innovate if they will be robbed blind by competitors.
The Strategic Economic Dialogue started by Bush’s treasury secretary, Hank Paulson, is now being expanded by Obama to become the Strategic & Economic Dialogue. Both Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner will be involved, along with Dai Bingguo and Wang Qishan on the Chinese side. The idea is to find ways for the U.S. and China to work together to lead the world out of this recession and avoid future confrontations.
So far, a new U.S. ambassador to China has yet to be chosen. Many people have been eliminated from an initial list, and several prominent people have turned the job down, including former Nebraska Senator Chuck Hagel and former Commerce Secretary Bill Daley. Currently, the top people on the list in Washington are Laura Tyson, a member of President Obama’s Economic Recovery Advisory Board who served as the chair of the council of economic advisors during the Clinton administration from 1993 to 1995 and currently serves as a senior advisor for Asia Society’s Initiative for U.S.-China Cooperation on Energy and Climate, and Jim Leach, the former Republican congressman from Iowa who chaired the Congressional-Executive Commission on China and headed up the Whitewater investigation as the chair of the House banking committee (which may make him less of a favorite for Hillary Clinton).
There is no split in the Obama administration when it comes to China policy. Non-naïve, non-ideological, clear-eyed and serious engagement is where this relationship is headed. It looks like Obama will be coming to China after the APEC meetings in November. Look for the White House to use its star-power to reach out directly to the Chinese people.
Two comments. First, if the administration actually does figure out how to insulate themselves from the entertainment industry and move forward on significant IP enforcement and protection issues, that would be wonderful. That being said, I’ll believe it when I see it. Just the fact that the discussion apparently included an acknowledgment that there are other IP issues out there besides pirated DVDs and MP3 downloads is heartening.
Second, I would be very happy to see Jim Leach get the ambassador’s nod. His views on China are pragmatic, sober, and very cogent. I’m a big fan — this would be an excellent pick.
In general, I think a lot of us over here were waiting to see if Obama would make the same China policy mistakes that Clinton did at the outset of his administration. Looks like his team is well aware of recent history, which is good news.
Of course Obama’s China team is “pragmatic.” Many of them are involved in businesses that do business with China — Mona Sutphen, Deputy WH chief of staff, Ken Liberthal, Jeff Bader, Sandy Berger and other Dem stalwarts are all involved with Stonebridge, which does a brisk consulting business with corporations that want to invest there. That was also true of ill-fated NIC appointee Charles Freeman, a sinophile with a long history of business ties to Beijing. Just last month CSIS, the establishment thinktank that does quite a bit on Asia, released a report calling for “pragmatic” China policies, etc. I don’t have to tell you that it was written by two people who are CEOs of firms that do a roaring China business. Our China policy is owned by China.
Ken Silverstein at Harper’s in August of last year had a great piece on how on both sides of the aisle, the people who make our China policy are all doing business with China. I uploaded a copy to my website:
http://www.michaelturton.com/mandarins.pdf
My experience is that analysts who are not knee-deep in the China business are more realistic about China. And I haven’t even gotten to the problem of the disease of sinophilia, which is rampant among our China experts…..
And yes, Jim Leach would make an excellent choice for Ambassador!
Michael Turton
I “know” Leach from my Iowa days. He tends to be “pragmatic, sober, and very cogent” on just about everything….
Yuck, I hate the words “China experts”, especially when attributed to non-Asian people. Why are there so few Asian “China experts” in the USA? I think it’s a matter of the white policy makers not seeing their boogers from their noses.
And I hate the word “expert” attributed to anything. Chinese universities designate foreigners as “experts”, and that usully goes too far, but for us to fall prey to the continued mis-associations fo naming people experts when they perhaps just get their head out from the ground more often than other experts is BALONEY.
Too often we confuse people who write a lot on China with being Chinese experts. Do not confuse the ability to write prose with the ability to understand China. Walking softly (and “carrying a big stick”) I think is the true merit of a true Sinophile….
oh dear, but now I too am pigeonholing people into designations based on arbitrary criteria….