Wednesday, November 07, 2012

Random Thoughts On The U.S. Election And The Chinese Leadership Changeover

Half a world away, about half of the voting age population of the United States is participating in the great experiment that is democracy. One wishes that the voter turnouts were higher, as decisions and the bases for making them grow stronger as the number of participants increases. Unfortunately Americans, while great proselytizers for democracy, are not particularly strict practitioners of it -- much like the pastors who raise the roof with exhortations of the wonders of morality, only to be discovered later to have been sorry sinners.

In Beijing, the National Congress of the Chinese Communist Party will begins its meetings later this week. The culmination will be the unveiling of a new Politburo Standing Committee. While completely unlike the fol-de-rol now coming a merciful close on the North American continent and in President Barack Obama's home state of Hawaii (where Fukushima-born Mazie Hirono is about to become the first U.S. Senator to have been born in Asia) the Chinese leadership selection is also democratic, with the prejudices and aspirations of millions of individual Chinese Communist Party cadres being collected and spliced together into vast coalitions backing the candidatures of a small circle of potential leaders.

Here in Tokyo, while there is a façade of interest in the two leadership contests, the reality has sunk in that no matter who comes out on top in the U.S. and in China, the outcome for Japan is largely the same. Showing interest in the results of the U.S. elections or the switchover of the CCP Politburo seems an anachronism -- a habit, not a necessity.

This was not always the case. Up until about Koizumi era, interest in U.S. elections was intense, particularly among the elite members of the politico-economic world. Trade with the United States and the U.S. military umbrella were of immense importance to the elite, who needed both to carry out their twin feats of legerdemain: providing economic prosperity and security without sacrifice. As long as the doors of the U.S. remained open to Japanese goods and large numbers of U.S. troops remained on Japanese soil, the elites in business and government never had to make choices – everyone could be rewarded for trying to achieve something, no matter how unimportant or even destructive their behaviors.

It should not be surprising that elites would obsess over whether those who would be dealing with Japan would be pro-Japan or not. The elites kept a cocked ear, and encouraged all citizens of this blessed land to keep their ears cocked as well, to every whisper and grumble in the U.S. Congress and the White House and on the campaign trail.

However, during the premiership of Abe Shinzo it became clear that all the attention paid to the United States, all the yen that had been invested in alliance managers of both of the main U.S. parties, could not assure the Japanese government's ability to control its own destiny vis-à-vis the relationship. This point was hammered home this year when The Quartet (Richard Armitage, Stephen Handley Hadley, Joseph Nye and James Steinberg) told Tokyo audiences to stop provoking Beijing and instead learn to embrace their new Chinese overlords. (Link)

As for the China-Japan relationship, the disconnect appeared earlier, in 2005, with the anti-Japanese riots. Stripped away were the China Lobby's pretensions that the Sino-Japanese relationship could be managed. All the banquets, all the Overseas Development Assistance, all the Japanese corporate investment meant diddly in how Chinese citizens and the Chinese government could behave toward Japan. That Japanese businessmen and politicians have kept trying, in the intervening years, to get Beijing to understand just how innocuous Japan is, represents the triumph of hope over memory.

The Chinese escalation of the Senkakus sovereignty question (Link) and the Noda Government's decision to hold firm on a return to the status quo ante have exacted huge costs upon Japanese businesses, particularly Japan's automobile manufacturers. However, the costly fight over what are nearly worthless islets and not particularly hydrocarbon- or fish-rich waters has a silver lining: detachment from China, which would has been resisted by business lobbies, has been accelerated.

I have over the last few days had the privelege of holding a ringside seat at a high-level and high stakes debate oveer U.S. policy toward Japan and China. The intellectual firepower of the participants is blinding.

The debate is bizarre, however, as ruminations on how to accommodate China's continued rise are predicated on just that: China's continued rise. Despite the glaring examples of the collapse of the Bubble in 1989 and the Great Recession (2008 – continuing), policy wonks are failing to check to see if indeed there is a floor beneath them, relying on an axiomatic faith in China's not hitting a wall.

China's investment-as-a-percentage-of-GDP ratio of 50% is unsustainable, however. In order to preserve the illusion of prosperity in the face a global recession and a once-in-a-decade leadership handover, the government of China has greenlighted an immense extension in credit. The bills will come due, sooner than most big thinkers are willing to admit.

When the Great Reckoning comes for the People's Republic, the governments and economies with the fewest strong ties to China will be the lucky ones.


Anonymous said...

Stephen Hadley is misspelled.

Anonymous said...

So is oveer.