Editor’s note: This is the second of a two-part series. Part I examined the need for a global economic grand bargain. Part II examines what such an economic grand bargain might look like. BEIJING — The recent market correction and an increasingly bleak economic outlook have sharpened the case for a G-20 economic grand bargain. China has the capacity to take a lead in any such arrangement, using its $3 trillion foreign exchange reserves as bargaining chips for reshaping the global economy to better suit its interests. This could form the bedrock of broad-based and coordinated policy action to address […]

Editor’s note: This is the first of a two-part series. Part I examines the need for a global economic grand bargain. Part II, which will appear tomorrow, will examine what such an economic grand bargain might look like. BEIJING — When the global financial crisis broke in 2008, rather than allow economic forces to run their course, policymakers intervened to set the unholy precedent of nationalizing financial market risks. Moreover, this was done without addressing the structural imbalances behind the boom and bust. Events of the last three weeks have demonstrated the fundamental ineffectiveness of previous interventions and underscored the […]

Ian Bremmer, the founder and head of Eurasia Group (for which I work as an analyst), has argued that we are living in a “G-Zero” world, or one in which there is no genuine great-power leadership. From the perspective of political science, it is hard to disagree, as anyone reading a newspaper these days can attest. Still, the historian in me says this situation cannot last for too long. My reasoning here has nothing to do with the global correlation of military force, since thanks to globalization’s emerging middle class, “butter” will inevitably emerge as the winner over “guns.” Instead, […]

Amid the anxiety and devastation of the London riots, there was one brief comic interlude, when the government of Iran urged British authorities to use restraint in dealing with protesters. The appeal was bitterly amusing, of course, because of the brutal tactics Tehran used to put down protests in 2009. Police in London managed to end the rioting using traditional crowd-control methods. But then, in the wake of a public outcry over the disturbances and the disappointing performance of the police, British Prime Minister David Cameron made a highly controversial proposal: Next time, he suggested, the government might choke off […]

On Aug. 1, local government officials in China’s Xinjiang province alleged that the ringleader of a deadly attack in Kashgar had been trained in Pakistan. The accusation has injected some sourness into a bilateral relationship often described as “sweeter than honey.” In fact, contrary to the sappy rhetoric, China-Pakistan ties have rarely been trouble-free — and the points of tension long predate what happened in Kashgar. One example is the plight of Pakistan-based Chinese nationals. According to estimates gathered from Pakistani and Chinese media sources, about 35 Chinese workers were kidnapped, killed or maimed in the country between 2004 and […]

The biggest defense news from the past week concerned the beginning of sea trials for China’s first aircraft carrier, Varyag. A former Soviet/Ukrainian hulk and the sister ship of the Russian aircraft carrier Admiral Kuznetsov, Varyag finally set sail after a long process of refurbishment. The ship, which may now go by the name Shi Lang, will likely only serve as a training carrier, but her embarkation on trials has generated great consternation among observers of the Asian naval scene. Officials from both the United States and Japan have asked China to explain its need for an aircraft carrier, as […]

Israel’s Warming Defense Ties With China

There are two interesting U.S. angles to the recent spate of high-level defense contacts between Israel and China. The first has to do with the respective roles each country plays in the domestic U.S. discourse, with Israel universally portrayed as the United States’ most stalwart ally and China increasingly portrayed as our most likely future peer competitor. This Manichean view is especially pronounced among the Tea Party and Christian Zionist wings of the GOP, but is also present in moderate Republican and Democratic circles. So it will be interesting to see how a closer defense relationship between the two plays […]

The Taiwanese government of President Ma Ying-jeou has denied that it harbors plans for siding with Beijing in territorial disputes over the South China Sea. Yet the notion that the resource-rich and strategic waters should be the starting point for cross-Strait military cooperation is gaining traction on the island. Since last year, the People’s Liberation Army Academy has repeatedly called for cooperation with Taiwan in protecting “common ancestral rights” in the region’s disputed waters. At the same time, China has regularly invited retired Taiwanese military brass to cross-Strait symposiums where cooperation in the South and East China Seas as well […]

“In China’s thousands of years of civilization, the conflict between humanity and nature has never been as serious as it is today.” — Minister of Environment Zhou Shengxian, February 2011. What is the biggest challenge that China faces? Corruption, the gap between the rich and poor, and the rapidly aging population often top the list of answers to this question. Yet a closer look suggests that the greatest threat may well be lack of access to clean water. From “cancer villages” to violent protests to rising food prices, diminishing water supplies are exerting a profound and harmful effect on the […]

Hacking Scandal Reveals Blurry Line Between Spycraft and Theft

An analysis released this week by the computer security firm McAfee (.pdf) exposed the widespread hacking of more than 70 corporations and government organizations worldwide. McAfee did not identify the hackers, saying only that evidence pointed to a nation-state as having carried out the attacks. However, some experts were quick to point to China as the most likely culprit. While he believes that may be an accurate assessment, Chris Bronk, a World Politics Review contributor and fellow in information technology policy at the James A. Baker Institute for Public Policy at Rice University in Houston, says “the hardest thing on […]

BEIJING — China’s social contract revolves around the Communist Party delivering the benefits of modernization to the country’s citizenry, and not, as Western observers might hope, around the transition to multi-party democracy. Consequently, technocratic failure presents the greatest risk to the party’s domestic credibility, something emphatically highlighted by the ongoing wave of public anger over the Wenzhou high-speed rail crash. Moreover, unlike recent high-profile political cases, the Wenzhou crash might very well turn out to be the moment China’s emerging public sphere came of age. Beyond loss of life, perhaps the most profound source of public anger regarding the crash […]

Xinjiang Violence Highlights China’s Pakistan Problem

Recent violence in the China’s western Xinjiang province has resulted in more than a dozen deaths and prompted an aggressive security response by Chinese authorities, who assert the unrest is being driven by Muslim separatists trained in Pakistan. The accusation, leaked to China’s state media Monday, came as the head of Pakistani intelligence was making a visit to Beijing and exposed a potential sticking-point in the oft-celebrated alliance between the two countries. According to Kerry Brown, who heads the Asia program at Chatham House in London, it also shed light on the delicate balance that characterizes the three-way relationship between […]

Although China did not launch its first aircraft carrier in time for yesterday’s People’s Liberation Army Day, expectations are that a Chinese flat-top will soon appear on the high seas. Chinese media have been hinting for years that the PLA Navy would not go forever without such an important naval asset, and the past few days have seen extensive coverage of the Varyag, which when it is launched will be the country’s first carrier ship. In 1998, the People’s Republic of China (PRC) purchased the Varyag, an uncompleted Soviet-era sloped-deck carrier, for $20 million. The Chinese buyer claimed it would […]