The most important security issue for the United States, the contest/competition/rivalry with China, may soon fade away.
The plausibility of this proposition is enhanced if we take as a parallel not the rivalry with the USSR during the Cold War, but the one that smoked through the 1980s and early 1990s when Japan appeared to be becoming “Number One.” The rather benign ending of that rivalry may have something to say about what will happen as China slides into what many suggest will be a lengthy period of slow growth or even stagnation.
In both cases, the perceived threats have been primarily economic.
As with China today, concerns about Japanese economic growth and business practices were once intense and widespread.
In a 1987 best-seller, Yale’s Paul Kennedy confidently listed a set of reasons why Japan was likely to expand faster than other major powers, stressing the country’s “immensely strong” industrial bedrock and its docile and diligent work force. He also predicted that Japan was likely to become “much more powerful” economically.
Meanwhile, Harvard’s Samuel Huntington assured us, in phrases that sound much like what we are hearing about the China challenge today, that a need had suddenly arisen to fear not “missile vulnerability” but “semiconductor vulnerability,” that “economics is the continuation of war by other means,” and that there was danger in the fact that Japan had become the largest provider of foreign aid and had endowed professorships at Harvard and MIT.
One book of the time was even entitled, "The Coming War with Japan," and some analysts argued that Japan by natural impulse would soon come to yearn for nuclear weapons.
Fareed Zakaria, managing editor of Foreign Affairs at the time, recalled a few years ago his experience “sorting through manuscript after manuscript arguing that Japan was going to take over the world.”
The public responded to this threatening perspective — especially after the diabolical Japanese bought Rockefeller Center (which they later sold at a loss) and a major Hollywood film studio. By 1989, the Japanese “threat” was seen by the public to be nearly comparable to the one posed by the still heavily armed Soviet Union, and America was convinced that Japan would be the number one economic power in the next century.
Politicians predictably followed suit, finding that Japan-bashing sold well. In 1987, several members of Congress publicly sledgehammered Toshiba products on the front steps of the Capitol. Meanwhile, Donald Trump complained at the time, “They come over here, they sell their cars, their VCRs. They knock the hell out of our companies,” and, “First they take all our money with their consumer goods, then they put it back in buying all of Manhattan.”
These concerns evaporated in the early 1990s when Japan's “threatening” economy stagnated and the American one surged. Huntington quickly decided that, as it turned out, the real problem was actually a “clash of civilizations” like the one going on at the time in Bosnia, and Kennedy moved on to warn of the dangers from job‑stealing robots and — as the rise in world population began to stagnate or even reverse — population explosions.
When he began his quest for the presidency in 2016, Trump tried Japan-bashing again, designating it along with China and Mexico as a country where “we are getting absolutely crushed on trade.”
However, by that time Japan’s growth had been mostly flat, and trade friction had become much more subdued even though the United States continued (and still continues) to run large trade deficits with Japan while Japan can still make foreign investment difficult.
China-bashing sold much better, as Trump found out in a speech in which his line, “We can’t allow China to rape our country, and that’s what we’re doing,” inspired an approving roar from the audience. Trump spent the rest of the 2016 campaign building on that theme and repeating much of it in his 2020 campaign, as did many other candidates.
Something similar to the Japanese experience may now be happening with the China threat as its growth slumps and the U.S., far from being “displaced” in its GDP ranking as number one, retains its statistical advantage.
Most troubling for China is a growing set of difficulties, most of them deriving from a determination to prioritize control by the antiquated and kleptocratic Chinese Communist Party over economic development. The list of resulting problems is substantial: endemic corruption, environmental degradation, slowing growth, capricious shifts in government policies (including the abruptly canceled “zero COVID” policy), inefficient enterprises, fraudulent statistical reporting, a rapidly aging population, enormous overproduction, huge youth unemployment, increasing debt, a housing bubble, restive minorities, the alienation of Western investors, and a clampdown on civil liberties.
There also seems to be something of a decline in confidence in, and in the credibility of, the Communist Party’s dictates, a change that could have dire long‐term consequences for the regime.
There are some non-comparable elements between the cases, of course. Despite books like "The Coming War with Japan," concerns about Tokyo were less military than they are for China, which has increased its defense expenditures and is accused of threatening to invade Taiwan and becoming a dominant “hegemon” in its area, while expanding its global reach.
Nonetheless, the perceived threat remains mainly economic. For example, a recent report by a devotedly anti-China committee in Congress restricts its concerns to what it calls China’s “economic aggression” (while recommending a series of changes including a rise in tariffs that might cost the American economy nearly two trillion dollars over five years).
Although books entitled “Destined for War” may continue to sell for a while, China’s economic stagnation (but not collapse) is in the air, and some elements of its counterproductive “wolf warrior” diplomacy have been relaxed. As a result, the political appeal of China-bashing may be headed for a degree of remission.
When Toyota became the number one car maker in the U.S. in recent years, scarcely anyone noticed and fewer cared. If there’s an electric car in the future, it may well be Chinese. But, if the Japan analogy holds, it is likely that the reaction will be much the same.
Ukraine would consider inviting Russian officials to a peace summit to discuss Kyiv’s proposal for a negotiated end to the war, according to Andriy Yermak, the Ukrainian president’s chief of staff.
“There can be a situation in which we together invite representatives of the Russian Federation, where they will be presented with the plan in case whoever is representing the aggressor country at that time will want to genuinely end this war and return to a just peace,” Yermak said over the weekend, noting that one more round of talks without Russia will first be held in Switzerland.
The comment represents a subtle shift in Ukrainian messaging about talks. Kyiv has long argued that it would never negotiate with Russian President Vladimir Putin, yet there is no reason to believe Putin will leave power any time soon. That realization — along with Ukraine’s increasingly perilous position on the battlefield — may have helped force Kyiv to reconsider its hard line on talking with the widely reviled Russian leader.
Zelensky hinted at a potential mediator for talks following a visit this week to Saudi Arabia. The leader “noted in particular Saudi Arabia’s strivings to help in restoring a just peace in Ukraine,” according to a statement from Ukrainian officials. “Saudi Arabia’s leadership can help find a just solution.”
Russia, for its part, has signaled that it is open to peace talks of some sort, though both Kyiv and Moscow insist that any negotiations would have to be conducted on their terms. The gaps between the negotiating positions of the two countries remain substantial, with each laying claim to roughly 18% of the territory that made up pre-2014 Ukraine.
Ukraine’s shift is a sign of just how dire the situation is becoming for its armed forces, which recently made a hasty retreat from Avdiivka, a small but strategically important town near Donetsk. After months of wrangling, the U.S. Congress has still not approved new military aid for Ukraine, and Kyiv now says its troops are having to ration ammunition as their stockpiles dwindle.
Zelensky said Sunday that he expects Russia to mount a new offensive as soon as late May. It’s unclear whether Ukrainian troops are prepared to stop such a move.
Even the Black Sea corridor — a narrow strip of the waterway through which Ukraine exports much of its grain — could be under threat. “I think the route will be closed...because to defend it, it's also about some ammunition, some air defense, and some other systems” that are now in short supply, said Zelensky.
As storm clouds gather, it’s time to push for peace talks before Russia regains the upper hand, argue Anatol Lieven and George Beebe of the Quincy Institute, which publishes Responsible Statecraft.
“Complete victory for Ukraine is now an obvious impossibility,” Lieven and Beebe wrote this week. “Any end to the fighting will therefore end in some form of compromise, and the longer we wait, the worse the terms of that compromise will be for Ukraine, and the greater the dangers will be for our countries and the world.”
In other diplomatic news related to the war in Ukraine:
— Hungary finally signed off on Sweden’s bid to join NATO after the Swedish prime minister met with Hungarian Prime Minister Viktor Orban in Budapest, according to Deutsche Welle. What did Orban get for all the foot dragging? Apparently just four Swedish fighter jets of the same model that it has been purchasing for years. The prime minister blamed his party for the slow-rolling, saying in a radio interview prior to the parliamentary vote that he had persuaded his partisans to drop their opposition to Sweden’s accession.
— French President Emmanuel Macron sent allies scrambling Tuesday when he floated the idea of sending NATO troops to Ukraine, according to the BBC. Leaders from Germany, the United Kingdom, Italy, Poland, and other NATO states quickly swatted down the idea that the alliance (or any individual members thereof) would consider joining the war directly. Russia said direct conflict with NATO would be an “inevitability” if the bloc sent troops into Ukraine.
— On Wednesday, Zelensky attended a summit in Albania aimed at bolstering Balkan support for Ukraine’s fight against Russia, according to AP News. The Ukrainian leader said all states in the region are “worthy” of becoming members of NATO and the European Union, which “have provided Europe with the longest and most reliable era of security and economic development.”
— Western officials were in talks with the Kremlin for a prisoner swap involving Russian dissident Alexei Navalny prior to his death in a Russian prison camp in February, though no formal offer had yet been made, according to Politico. This account contrasts with the one given by Navalny’s allies, who claimed that Putin had killed the opposition leader in order to sabotage discussions that were nearing a deal. Navalny’s sudden death has led to speculation about whether Russian officials may have assassinated him, though no proof has yet surfaced to back up this claim. There is, however, little doubt that the broader deterioration of the dissident’s health was related to the harsh conditions he was held under.
U.S. State Department news:
In a Tuesday press conference, State Department spokesperson Matthew Miller said the situation on the frontlines in Ukraine is “extremely serious.” “We have seen Ukrainian frontline troops who don’t have the ammo they need to repel Russian aggression. They’re still fighting bravely. They’re still fighting courageously,” Miller said. “They still have armor and weapons and ammunition they can use, but they’re having to ration it now because the United States Congress has failed to act.”
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Janet Yellen, United States Secretary of the Treasury. (Reuters)
On Tuesday, U.S. Treasury Secretary Janet Yellen strongly endorsed efforts to tap frozen Russian central bank assets in order to continue to fund Ukraine.
“There is a strong international law, economic and moral case for moving forward,” with giving the assets, which were frozen by international sanctions following Russia’s 2022 invasion of Ukraine, to Kyiv, she said to reporters before a G7 meeting in San Paulo.
Furthermore on Wednesday, White House national security communications adviser John Kirby urged the use of these assets to assist the Ukrainian military.
This adds momentum to increasing efforts on Capitol Hill to monetize the frozen assets to assist the beleaguered country, including through the “REPO Act,” a U.S. Senate bill which was criticized by Senator Rand Paul (R-Ky.) in a recent article here in Responsible Statecraft. As Paul pointed out, spending these assets would violate international law and norms by the outright seizure of sovereign Russian assets.
In the long term, this will do even more to undermine global faith in the U.S.-led and Western-centric international financial system. Doubts about the system and pressures to find an alternative are already heightened due to the freezing of Russian overseas financial holdings in the first place, as well as the frequent use of unilateral sanctions by the U.S. to impose its will and values on other countries.
The amount of money involved here is considerable. Over $300 billion in Russian assets was frozen, mostly held in European banks. For comparison, that’s about the same amount as the entirety of Western aid committed from all sources to Ukraine since the beginning of the war in 2022 — around $310 billion, including the recent $54 billion in 4-year assistance just approved by the EU.
Thus, converting all of the Russian assets to assistance for Ukraine could in theory fully finance a continuing war in Ukraine for years to come. As political support for open-ended Ukraine aid wanes in both the U.S. and Europe, large-scale use of this financing method also holds the promise of an administrative end-run around the political system.
But there are also considerable potential downsides, particularly in Europe. European financial institutions hold the overwhelming majority of frozen Russian assets, and any form of confiscation could be a major blow to confidence in these entities. In addition, European corporations have significant assets stranded in Russia which Moscow could seize in retaliation for the confiscation of its foreign assets.
Another major issue is that using assets to finance an ongoing conflict will forfeit their use as leverage in any peace settlement, and the rebuilding of Ukraine. The World Bank now estimates post-war rebuilding costs for Ukraine of nearly $500 billion. If the West can offer a compromise to Russia in which frozen assets are used to pay part of these costs, rather than demanding new Russian financing for massive reparations, this could be an important incentive for negotiations.
In contrast, monetizing the assets outside of a peace process could signal that the West intends to continue the conflict indefinitely.
In combination with aggressive new U.S. sanctions announced last week on Russia and on third party countries that continue to deal with Russia, the new push for confiscation of Russian assets is more evidence that the U.S. and EU intend to intensify the conflict with Moscow using administrative mechanisms that won’t rely on support from the political system or the people within them.
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Activist Layla Elabed speaks during an uncommitted vote election night gathering as Democrats and Republicans hold their Michigan presidential primary election, in Dearborn, Michigan, U.S. February 27, 2024. REUTERS/Rebecca Cook
A protest vote in Michigan against President Joe Biden’s handling of the war in Gaza dramatically exceeded expectations Tuesday, highlighting the possibility that his stance on the conflict could cost him the presidency in November.
More than 100,000 Michiganders voted “uncommitted” in yesterday’s presidential primary, earning 13.3% of the tally with most votes counted and blasting past organizers’ goal of 10,000 protest votes. Biden won the primary handily with 81% of the total tally.
The results suggest that Biden could lose Michigan in this year’s election if he continues to back Israel’s campaign to the hilt. In 2020, he won the state by 150,000 votes while polls predicted he would win by a much larger margin. This year, early polls show a slight lead for Trump in the battleground state, which he won in 2016 by fewer than 11,000 votes.
“The war on Gaza is a deep moral issue and the lack of attention and empathy for this perspective from the administration is breaking apart the fragile coalition we built to elect Joe Biden in 2020,” said Rep. Pramila Jayapal (D-Wash.), a progressive leader who has called for a ceasefire in Gaza, as votes came in last night.
Biden still has “a little bit of time to change this dynamic,” Jayapal told CNN, but “it has to be a dramatic policy and rhetorical shift from the president on this issue and a new strategy to rebuild a real partnership with progressives in multiple communities who are absolutely key to winning the election.”
Rep. Ro Khanna, a prominent Biden ally, told Semafor the vote is a “wake-up call” for the White House on Gaza.
The “uncommitted” option won outright in Dearborn, a Detroit suburb with a famously large Arab American population. The protest vote also gained notable traction in college towns, signaling Biden’s weakness among young voters across the country. “Uncommitted” received at least 8% of votes in every county in Michigan with more than 95% of votes tallied.
The uncommitted campaign drew backing from prominent Democrats in Michigan, including Rep. Rashida Tlaib (D-Mich.) and state Rep. Abraham Aiyash, who is the majority leader in the Michigan House. Former Reps. Andy Levin and Beto O’Rourke, who served as a representative from Texas, also lent their support to the effort.
“Our movement emerged victorious tonight and massively surpassed our expectations,” said Listen to Michigan, the organization behind the campaign, in a statement last night. “Tens of thousands of Michigan Democrats, many of whom [...] voted for Biden in 2020, are uncommitted to his re-election due to the war in Gaza.”
Biden did not make reference to the uncommitted movement in his victory speech, but reports indicate that his campaign is spooked by the effort. Prior to Tuesday’s vote, White House officials met with Arab and Muslim leaders in Michigan to try to assuage their concerns about the war, which has left about 30,000 Palestinians dead and many more injured. (More than 1,100 Israelis died during Hamas’s Oct. 7 attacks last year.)
The president argues that his support for Israel has made it possible for him to guide the direction of the war to the extent possible, though his critics note that, despite some symbolic and rhetorical moves, he has stopped far short of holding back U.S. weapons or supporting multilateral efforts to demand a ceasefire.
Campaigners now hope the “uncommitted” effort will spread to other states. Minnesota, which will hold its primaries next week, is an early target.
“If you think this will stop with Michigan you are either the president or paid to flatter him,” said Alex Sammon, a politics writer at Slate.
Meanwhile in the Republican primary, former President Donald Trump fended off a challenge from former South Carolina governor Nikki Haley. With 94% of votes in, Trump came away with 68% of the vote, while Haley scored around 27%.