The U.S.-Israel rift widens over Prime Minister Netanyahu's stance on Iran. Russia threatens to cut off gas supplies to Ukraine and Western Europe. And "Jihadi John" has been identified as a British national. A panel of journalists joins Diane for analysis of the week's top international news stories.
For years, China has been driven by one thing: growing its economy. Now the country looks to translate its economic might into global influence. In “The Contest of the Century,” journalist Geoff Dyer describes China’s push into international politics and explains why the United States is in a strong position to come out on top.
- Geoff Dyer foreign policy correspondent, Financial Times.
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Excerpted from “The Contest of the Century: The New Era of Competition with China–and How America Can Win” by Geoff Dyer. Copyright © 2014 by Geoff Dyer. Excerpted by permission of Knopf. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. For years, China has been driven by one thing. Growing its economy. Now, the country looks to translate its financial might into global influence. A new book describes China's push into international politics and exploring what it means for the U.S. The book is titled, "Contest of the Century." The author, Geoff Dyer, joins me in the studio. You, too, are welcome to be part of the program. Give us a call at 800-433-8850. Send us an email to firstname.lastname@example.org. Follow us on Facebook or Twitter. It's good to have you here.
MR. GEOFF DYERThank you so much for inviting me.
REHMGeoff, you're a journalist with The Financial Times. You were in China from 2008 until 2011. Talk about the changes you saw during that period.
DYERActually, I was in China a little bit longer. I was Beijing from 2008 to 2011. And from 2005 to 2008, I was based in Shanghai. But living through that time, that was the time of the Olympics, it was the time of the financial crisis, and you really felt that something very profound was starting to change beneath the surface in the way that China started to think about its place in the world. After Mao died, for 30 years, China just concentrated on growing its economy and generating wealth. That was what it focused on. It kept its head down. But in the last few years, you've seen China starting to make this really historical shift to this country that starts to want to try and shape the world.
DYERAnd shape the way the world is run. It's trying to channel its inner great power. Because there's an interesting Henry Kissinger quote, where he's talking about the US in the 1890s. He says that no nation has ever experienced such an increase in its power without seeking to translate into global influence. I think that's the kind of analogy. This is sort of the phase the U.S. was going through in the 1890s and the 1900s, the Teddy Roosevelt era, if you will, when the U.S. tried to sort stake its claim and have its voice heard.
DYERNow, of course, the U.S. when went and invaded Cuba and the Philippines. I'm not suggesting -- I won't push that analogy too far, because I'm not suggesting that China's about to do that, but it is that sort of coming of age moment. Now, what that means is because the world since the post Second World War has been shaped so much by American institutions and American values and American money. What that means is now you have this situation where China is now butting up against the US in all sorts of ways.
DYERIt's trying to challenge some of the dominance and influence that the U.S. has had over just the ground rules, the way the world and international politics...
REHMGive me an example.
DYERSo, this cuts across various issues. I mean, one is in the military area in Asia. Since the end of the second World War, the U.S. Navy has been the dominant force there. In the Asia Pacific, and in the western Pacific, especially. And it's used that to impose upon Asia its own kind of vision of how the world should be run. So, the free trade and free navigation, and when possible, it's pushed democracy. China is now starting to beginning to challenge that. China is gradually using its Navy, that's it's been investing in for 20 years, and it's pushing back a bit against the U.S.
DYERIt's pushing the U.S. further out into the western Pacific. And in the process, it's hoping to try and undermine the alliances the U.S. has with Japan, the U.S. has with South Korea. And that will put it in a much stronger position within the Asian Pacific. And if it has that position, then it can start to influence the way trade is affected, economies are run. And maybe even the way that politics is run. They have to remember, the Asian Pacific is not just sort of just one region of the world. This is now the cockpit of the global economy.
DYERHalf of global GDP is now generated by this region. So if you have a country like China becoming the dominant power in the Asian Pacific, that's a hugely powerful influence over lots of ways in which the world is organized.
REHMAnd tell me how the people themselves, are not only affected, but are reacting, are feeling this change.
DYERWell, one of the reasons this is happening is you have this kind of pressure from below. There's a very sort of raucous internet nationalism in China. A sense that now is our time and we want to have our influence. And that's, to some extent, being, actually generated by the Communist party itself. After the Tiananmen Square massacre in '89, the Communist Party lent very heavily on nationalism to try and boost its own legitimacy, to try and demonstrate why it should be in power. And so it's really pushed a very strong narrative about how Japan's out to get us.
DYERAnd the West are out to get us. And that's really affected -- that's very much affected the kind of popular mood in the country. And some of that's starting to come back as popular pressure for China to stand up to Japan, to stand up to the U.S., to stand up for itself, and to pressure it. And that's closing off the options the government has. It makes it much harder for it to resolve some of these sensitive issues when it has this very, very aggressive pressure from below.
REHMYou have said that Twitter is extraordinarily active in Japan.
DYERIt's actually not Twitter.
REHMSorry. In China.
DYERWell, the curious thing is Twitter itself is banned, but there is a Chinese version of Twitter, which is called Weibo. Which has really taken off in the last two or three years and is really changing things quite dramatically. You know, we all have friends who have maybe 10,000 Twitter followers or 20,000 Twitter followers. There are these figures in China who have, you know, 20 million Weibo followers. And because of the nature of the medium, it's much quicker and faster than the internet.
REHMAnd what are they messaging about?
DYERThey're messaging all sorts of things. I mean, some of it is criticism of the Communist Party and of the government. It's about corruption is a huge theme, environment is a huge theme. But nationalism is also a very big theme, about wanting to stand up to the Japanese, in particular, which is the real issue.
REHMBut, you know, it does seem as though there's kind of the duality there in conflict that the government going sort of full steam ahead. The people being surrounded by extraordinary pollution, extraordinary deprivation at one level. I mean, how does the government deal with that differential?
DYERI'm thinking in terms of foreign policy. One of the risks is that the government is tempted to sort of seek skirmishes and conflicts and arguments abroad in order to legitimize itself at home. So, you have a new administration in China, come in the last year, President Xi Jinping. His agenda is to do some very ambitious, aggressive economic reforms. And that's going to involve taking power away from some of the very important people within the Communist Party. Perhaps one of the ways he might be tempted to try and generate the political will to do that is to play out these tensions with someone like Japan and with the U.S., to give him this greater sense of legitimacy.
DYERThat's one of the risks in this next period, is that foreign policy becomes quite unstable as a way of creating the conditions to push through some of these economic reforms at home.
REHMAnd again, I'm back to the people. What kinds of reforms do you think will satisfy the people as the government tries to become more and more powerful internationally?
DYERWell, Japan is the sort of big issue at the moment. And that's focused very much on the Senkaku Islands. Well, the Japanese call it Senkaku Islands, but the Chinese call it the Diaoyu Islands. That's the big sort of flashpoint issue between the two countries at the moment. And there's a very, very strong, sort of, underlying anti-Japanese sentiment in China. And in Japan, a very strong anti-Chinese sentiment. Look at the opinion polls these days. In both countries, 90 percent in each country do not trust each other.
DYERThat's a very, very tense dynamic now that you have. And you have to remember this is now -- China's the second biggest economy in the world. Japan's the third biggest economy in the world. And the U.S., the biggest economy in the world, is committed by its alliance to defend Japan, so even though these islands might seem sort of insignificant, they might seem rather obscure, there doesn’t seem to be a huge interest involved in them. It brings together these huge forces, that if something did escalate, if some sort of conflict did come out of that, it would have huge implications for the rest of the world.
REHMAnd my guest in this hour is Geoff Dyer. His new book is titled, "The Contest of the Century: The New Era of Competition With China and How America Can Win." Before we get to how America can win, let's talk about the buildup of the Navy, and exactly what China is trying to accomplish. Is it more or as much for show as for action?
DYERIt very much is, not for action, but what China's trying to do is to create a series of military capabilities that will create uncertainty in the minds of, particularly the American Navy. And just slowly push it further back.
REHMWhat kind of uncertainty? America has a very powerful Navy.
DYERThe simple way to explain it is missiles. Some American analysts describe the Chinese Navy -- they actually call it an anti-Navy. China has built thousands of missiles, either on land or at sea, which are designed to take out American ships, American submarines, and even one that's designed to take out American aircraft carriers. And the whole process is not that they actually want to use this in any way, but they just want to create enough uncertainty that it makes the US operate ever further back into the Western Pacific. Slowly push it outwards.
DYERAnd that's just the military component of this. China also has a diplomatic strategy, trying to have good relations with the rest of its neighbors, so that China can be accepted into the international economy, and to all these Asian supply chains. The problem with China's having is these two goals are completely contradictory. The harder it pushes against the U.S. and its allies like Japan, the more it unsettles the rest of its neighbors and encourages them to develop a sort of anti-China coalition in the region.
REHMAnd are you seeing that the Chinese have a deaf ear to that kind of backlash?
DYERAbsolutely. In the last five years, the Chinese have really shot themselves in the foot, quite substantially, by picking -- they've managed to pick fights with almost all their neighbors over the last few years, over these kinds of little territorial disputes. Which in the Chinese mind is about them pushing forward, it's about them trying to create this kind of strategic space for them to operate. But in the process, they are alienating -- they've managed to alienate most of their neighbors in important ways.
DYERAnd pushed all these countries towards the U.S. So, it's not a case of the U.S., you know, trying to get back into Asia. It's these other countries in Asia are imploring the U.S. to get more involved as a hedge, as a way to balance China.
REHMSuch as who?
DYERJapan, South Korea, Philippines, Singapore, Australia, even Vietnam, who 30 years ago, the US at war with, is now doing military operations with the U.S. Navy. The aircraft carrier, the John McCain aircraft carrier docked in Vietnam a couple years ago. Various, you know, Vietnamese admirals went on board. So even a country like Vietnam is looking to get the U.S. more involved in Asia and the Western Pacific as a way of countering Chinese power.
REHMAnd, of course, President Obama has said, we are going to turn our eyes to the east.
DYERHe did say that in 2011, 2012. And that initial start of what we have called the pivot. There was a very strong American emphasis on that. In the last year, that's started to shift a little bit, and now, there's a real risk that the pivot is losing momentum.
REHMAll right. Short break here. And when we come back, more conversation and your calls.
REHMAnd welcome back. Geoff Dyer is with me. He is a journalist and spent a number of years in China, both in Beijing and elsewhere. He writes for the Financial Times, has just written a new book titled "The Contest of the Century: The New Era of Competition With China and How America Can Win." Just before the break we were talking about President Obama's statement of a pivot toward the east. And you are talking about the fact that Vietnam, other countries in the east are hoping that the U.S. become more involved in that area.
DYERAbsolutely. Well, I think when it comes to the Obama Administration's pivot to Asia, I think there are three different ways to think about it. One is just the rhetoric and communications of this policy. And it's become a bit of a banana skin. The whole word the pivot has become a real problem because people think well, if you're pivoting to Asia where are you pivoting from? So Europeans are very nervous because they think that this is about leaving Europe to go to Asia. And the Middle East, they're completely neuralgic because they think this is about the U.S. disengaging from the Middle East to go to Asia.
DYERSo that's become a big problem. If you think about it in terms of grand strategy of American foreign policy, it's really a no-brainer in a sense. The U.S. was always going to respond very powerfully to the rise of a country like China. For more than a century U.S. strategy has been to try and prevent any other country from being dominant in Europe or dominant in Asia. It's fought a couple of world wars to do that. It was always going to up its game in response to China.
DYERWhen you think about the pivot as a bunch of specific policies, that's where it's starting to look a lot weaker. U.S. was very strong and very active in 2012. But over the last year they started to lose some of the focus, some of the energy. And some of this is just about personalities. I mean, something like Secretary of State John Kerry who's so focused on the Middle East, and for lots of good reasons. But he's about Iran. He's about the peace process of Israel Palestine, the Syria civil war.
DYERAnd these people, they only have so many -- there are only so many hours in the day that these politicians -- there are only so many issues that they can address. And there's a real feeling in Asia that the U.S. is somewhat getting distracted.
REHMWell, what would a true pivot toward the east represent in your view? What -- how would he demonstrate that?
DYERSome of it is just through diplomacy. It's about always being present. I mean, the underlying idea of the pivot is the idea of staying power. It's the idea that America's going to be present. We're going to continue to be present in Asia even with a much stronger China, that's not going to withdrawal. And so you demonstrate that by always turning up at meetings, always being present, always being there. Last year during the budget crisis President Obama was supposed to go on a big trip to Asia. He had to cancel because of the budget crisis. That sends a very bad signal.
DYERWhen you have someone like Secretary State Kerry also very wrapped up in the Middle East, that also sends a signal. And so these countries start -- you know, American allies and friends start to get worried that America's losing its interest in the region. (unintelligible) as well, the big part of the economic part of the pivot is something called the TPP, the Trans-Pacific Partnership...
DYER...which is this big trade deal between some countries and the Americas and a bunch of countries in Asia. That's become the real power to the Obama Administration. Last week Harry Reid, the Senate Majority Leader, really caused a huge problem for the administration because he came out and announced that he wasn't going to -- congress wasn't going to pass giving special authority to the administration to negotiate that kind of trade deal. And that really undercuts the administration's strategy in Asia because, look, trade deals are very hard to sell. We understand that. Unemployment's stagnant, middle class wages. The politics of this are very tough.
DYERBut in Asia, trade is about foreign policy. It's about a way of America showing that it's connected and it's committed to being engaged with Asia in the long term.
REHMBut of course, Americans also see the effects of (word?) and become very concerned that already we have lost so many jobs. The economy is still not quite strong enough. And to be talking about another trade deal with it, he sends the message that perhaps more jobs will leave the country.
DYERWell, that's why it's so hard politically.
DYERBut if you think about it in the big picture, I mean, these countries in Asia are going to be the fastest -- you know, are some of the fastest-growing biggest economies in the world. If America doesn't get involved in exploring new trade deals with these countries, it risks being shut out in some ways by some of these markets. And China has its own trade agenda in Asia and that the risk is you get trade integration that's just really about Asia and really kind of closes off the Pacific, closes the U.S. a little bit out of some of those markets. And that's very damaging to the U.S. jobs in the long term.
REHMAll right. Here's an email from Ron who says, "In the 19th century the U.S. issued the Monroe Doctrine pushing European powers out of the western hemisphere. Could China issue its own version of the Monroe Doctrine later this century to push the U.S. out of Asia Pacific? And how would they enforce it?
DYERI think that's a very interesting question. I think that is one powerful analogy to describe the kind of thing that China is trying to do in Asia is to think of it in terms of a Chinese Monroe Doctrine. It is trying to, not completely dominate the region, but it is trying to push out other powers like the U.S. and prevent them from coming into influence events in Asia and give China much stronger say.
DYERBut if you think about it historically and you look back at the Monroe Doctrine, it's kind of interesting to see that at the time when it really started to be applied in 1890s and the 1900s when the American Navy really started to be a force, many of those countries in Latin America actually welcomed the U.S. because they were -- the U.S. presence in the -- the U.S. military presence in the region allowed them to establish their independence from European colonial powers.
DYERSo the example I know the best is actually Brazil. From 1900 to 1960 the Brazilian senate and the building called the Palacio Monroe named after President Monroe because they thought -- at the time they thought the Monroe Doctrine was a wonderful thing because it underpinned their independence from Europe. That's the complete opposite from the situation you have in Asia at the moment, where you have all these other countries are very worried about a dominant China. And they want to keep the U.S. involved to get China off their backs a little bit.
DYERSo the problem for China is the same kind of project in some ways that they're pursuing, but the actual circumstances are very, very different.
REHMAll right. We have many callers. Going to open the phones, 800-433-8850. Let's go first to Frank in Charlotte, N.C. Hi, Frank. You're on the air.
FRANKOkay. So, you know, the thing is is that, you know, if we would raise the American minimum wage, you know, we would be able to drive some Americans out of having to shop at stores that everything in those stores is made in China. And they would be able to buy stuff from Europe and other places instead of having to send our money over there, billions -- 285 billion I think every quarter or something like that to China in order for them to build up their military and us to have to give more of our tax dollars to build up our military, which is ridiculous.
REHMAll right. Thanks for calling, Frank. Go ahead, Geoff.
DYERThere's certainly one bit of that I do agree with Frank is that in the long term one of the most important things for the U.S. is to revive its economy, not just to recover from the crisis in the way it has in the last few years, but actually to raise middle class salaries over the long term. That's the real kind of risk to American power going forward as you have this kind of stagnation in the middle class. This is -- the way to generate real sustainable national power going forward is to be a much more sustainable economic recovery in which lots of people in the country are benefitting. And that will generate the capacity to, you know, have the resources to deal with the kind of challenge that China is going to face the U.S.
REHMAll right. To Greg in Indianapolis. Hi there.
GREGHi. You know, well first of all I'd like to plug one of my favorite books. It's called "The Asian Mind Game." Anyway it's about business people. I don't know if the author has -- knows the book "The Coming Conflict With China." I'm not sure if that's obsolete now or not considering...
REHMLet us have your question, please.
GREGI have a question. My question is I'm really -- I'd like to know, what are all the factions flying around China these days, I mean, both militarily and political? And that's it.
DYERWell, one of the interesting things that's happened in the last few years is that the military has definitely become a stronger voice within the Chinese political system. It's actually incredibly hard to really determine completely because the military's very kind of walled off from the rest of society. And it's very hard to understand the politics of it. But it does seem that the military has become more influential and it's pushing some of these ideas. And the Chinese military does have a very skeptical view of the U.S. and the U.S. military. They're very suspicious of the U.S. military.
DYERThe U.S. military has been very much on their case. They see that the American Navy is patrolling right close to the Chinese coast all the time doing surveillance missions. And so the fact that the military possibly has a strong voice in the political system is one of the things that is creating this more aggressive ambitious Chinese foreign policy, encouraging China to push back against the U.S.
REHMAnd to Sheila in Washington (word?) you're on the air.
SHEILAThank you for taking my call, Diane.
SHEILAI'm calling because I'm concerned about the path that America is taking with China, especially considering the air defense zone that it has recently set up between the mainland of China and Japan. And Japan kind of pushing back saying, we don't want this and America saying, well we're going to fly a couple jets over. But actually they didn't have any weapons on them. So I -- it makes the U.S. look very weak.
DYERI think I agree partly with that. I think the U.S. response to that was a little bit muddled. What happened was when China announced this air space identification zone, which a lot of people interpreted as a claim to the air space over the East China Sea, the U.S. sent a couple of B52s through there. But at the same time, it told its own airlines to actually accept these Chinese rules. So a lot of people in the region, particularly Japanese, were very angered by this announcement. It seemed like a confused response from the U.S.
DYERAnd that is going to be long term. That is going to be one of the big challenges for the U.S. It has to find the right way to be firm when China does these things but not to be too provocative. If the U.S. is too weak, we'll actually encourage China to be more ambitious, to try its luck in other areas. But if it's too tough in its response, then it will alienate some of its allies and will...
REHMVery tricky balance.
DYERIt's a very, very delicate thing for the U.S. to do over the next coming years. It's very kind of a needle you have to thread, this kind of right level of firmness that isn't at the same time too provocative.
REHMAll right. To Louisville, Ky. Travis, you're on the air.
TRAVISGreat. Great to be on your program again. I'd like to ask the question, there's a lot of talk about China pivoting -- or Obama pivoting to China. But is Latin America pivoting to -- excuse me, is China pivoting to Latin America? And are some of our policies and attitudes towards these very populace left-leaning nationalistic governments that are all sporting around a 70 percent approval and have all been elected in Bolivia and Nicaragua, Ecuador, Venezuela and on and on, are we, by favoring -- continuing to favor a 50-year embargo on Cuba and favoring a hostile attitude towards very popular leaders, are we in many ways cutting our own throat in allowing China to come in and help Cuba develop their nickel industry?
REHMAll right. Thanks for...
TRAVISHelp Nicaragua develop their canal?
REHMAll right. Thanks for calling.
DYERWell, I'll tell you, that's a really interesting one, Latin America is -- the relationship between China and Brazil. Brazil is the real powerhouse of Latin America. It counts for almost 40 percent of GDP, 40 percent of the population in the region. What you've seen from China in the last few years is big investments was in various years been the biggest investor in Brazil pushing out the U.S. Has become the biggest trading partner in Brazil, again pushing out the U.S.
DYERSo there's definitely Chinese tentacles starting to enter into -- control Brazil. And I think that Brazil is one of the real gaps in the Obama Administration. I mean, it's made a lot of effort to get on with some of these other new and rising powers like India, like Indonesia, like Turkey. But still has a very weak relationship with Brazil. And Brazil is going to be one of these countries -- one of the forces of the future. And the U.S. needs to find ways to find common interests with Brazil.
REHMAnd you're listening to "The Diane Rehm Show." Let's go now to Laz in Miami, Fla. Hi there. You're on the air.
LAZOh, good morning, Diane. I know you were just speaking about Brazil. And of course, you know, the effects of China's involvement in Brazil is -- you know, has to be looked at. But one thing that, you know, Wall Street doesn't mention, that our government doesn't mention is China is becoming or already has become the latest investor in Africa. I mean, whereby, you know, the labor in China is -- you know, it's -- people are demanding higher and higher and higher wages but they're going to just, you know, turn over to China -- to Africa. And they'll be even offered -- they'll be able to offer even lower wages than they do in China.
LAZAnd as an ambition, they're getting all their minerals. They're investing in oil. They're investing in all these other resources that the U.S. is missing out on.
DYERThat's another very interesting area. The last decade there's been huge Chinese involvement in Africa. And one of the results of that is actually African growth rates have been very strong over the last decade partly because of the Chinese demand for commodities. But I think this raises a kind of very interesting question for the U.S. This is not going to be (unintelligible) for China. It's not a Cold War. It's not that the U.S. has to be present everywhere China is.
DYERIf China comes into Africa and generates growth and generates jobs in that region and gets political influence on the back of that, well good luck to China in lots of ways. the U.S. needs to be quite disciplined about this. There are good reasons and bad reasons for the U.S. to be thinking about getting more involved with Africa. The good reason is actually in lots of countries there now is a growing middle class. It's growing consumers in that region or potentially customers for American products. The bad reason for the U.S. to be thinking about getting more involved in Africa is that somehow they're chasing China's shadow.
DYERThis is not a contest to be present everywhere around the world that China is present. It's a contest for the kind of key high ground and global politics, the ways that allow you to shape the world. But not this sort of Cold War type issue where the U.S. has to dump its flag everywhere that China dumps its flag.
REHMSo the second part of your subtitle and how America can win means what?
DYERWell, you know, the U.S. -- if you want to start from Asia, which is the real focus of what China's doing in the short term over the next decade. It's main focus is on Asia and trying to become a dominant party in Asia. The real advantage that the U.S. has in Asia is that most other countries in the region want what the U.S. wants. They want free trade. They want freedom of navigation. They want disputes to be decided by rules and laws and not by might is right. So the U.S. is very much pushing against an open door in Asia.
DYERIf this was just about the U.S. against China and Asia, the U.S. would lose because the U.S. is 8,000 miles away and China's right in the center. But because it has all these potential friends and allies who want very much the same things, the U.S. has the chance to sort of recreate an Asian order that's based around the kind of values and ideas that the U.S. wants and that most of Asia wants. That's one way to think about it.
DYERBut some of the other things the U.S. needs to think about are when we talked about the economy, we talked about, you know, how, you know, restoring middle class salaries is very important to, you know, underpinning America having the resources to really kind of operate its foreign policy in the years to come as much easier -- it's very easy to say, very hard to do. But that is very much a fundamental challenge.
DYERBut there are other things of all things like a lot of this is going to involve diplomacy. It's about very careful, you know, long term disciplined diplomacy. It's about always showing up to these meetings that might seem interminably boring and involve a 13-hour flight, but you always have to be there. You always have to show your face. You always have to show that you're engaged.
REHMGeoff Dyer. He's with the Financial Times. His new book is titled "The Contest of the Century: The New Era of Competition With China and How America Can Win." Short break, right back.
REHMAnd welcome back. Geoff Dyer is with me. He's a journalist with the Financial Times. He's been number of years in China reporting on that country. His new book is titled "The Contest of the Century: The New Era of Competition with China and How America Can Win." Karen -- or Charlie from Martha's Vineyard has an interesting perspective.
REHMHe says, "I believe China is too ancient and influential a society to say that nation is having a coming-of-age moment. We can tell from their lengthy, relatively peaceful history they're unlikely to see military dominance abroad but are more likely to be able to want to defend themselves from more aggressive countries, meaning the U.S. I feel Americans will serve themselves best in the century ahead by treating China as a global partner rather than a threat."
DYERWell, that's a very interesting comment. I think one way to respond to that is to say that it captures a very interesting aspect about China which is that, on the international stage, on the global stage, China is in some ways the newcomer. It's the new super power. But in Asia, they're absolutely right to say it is the old power.
DYERAnd some of what China is trying to do is recreate the old world that existed until maybe the 1500s where really Asia kind of revolved around China, where China was the central power. They see that in many ways as the natural state of affairs. And the way the Chinese would tell this history about -- tell that history, they would say that China was a very unaggressive, unviolent country that didn't really invade anyone.
DYERSome of China's neighbors would have a very different perspective in that. If you go to Vietnam, you would have a very different sense of what that imperial China represented. If you go to Korea, you'd have a very different sense. If you went to Mongolia, you'd have a very different sense. So the Chinese history, over these hundreds of thousands of -- well, these, you know, thousands of years, there's lots of moments of where that -- what the caller was describing about this more harmonious situation mostly.
DYERBut there are also periods when China was expanding, when China was, you know, fighting with its neighbors, when Chinese borders were pushing out and absorbing all the countries. So there was a very much more mixed picture than perhaps that caller represented.
REHMAll right. Let's -- here is another email from Sam who says, "China has two Asian countries, namely Japan and India, which have strong armed forces which it will have to contend with if it wants to dominate Asia. Also, Russia is a major player. Please comment on the role of these three countries play as a counterweight to China. Also, the PLA, or the People's Liberation Army has not fought a war since 1979. Are they really as strong as the world makes them out to be?"
DYERI -- again, very interesting questions. Just on the other regional powers, I mean, one part of what's going to happen is what does the U.S. do? How does the U.S. respond to, you know, these Chinese ambitions? But another second layer of it will be exactly how these other Asian countries cooperate amongst each other. And part of this backlash you've seen in the region against China in the last few years is the first connections of this.
DYERSo you've seen Indians and the Japanese talking much more closely about not just economic collaboration but about military collaboration. The Russians and the Japanese have been holding meetings for the first time in decades where they've been talking about strategy. So you're starting to see this sort of Asian coalition developing amongst different Asian countries where they're binding together to try and resist certain types of Chinese behavior.
DYERVietnam is also very prominent now. Vietnam has been talking with the Indians, has been talking with the Japanese, talking with the South Koreans. So you are seeing this kind of this framework of countries that are trying to build different agreements as a way of restraining and limiting Chinese ambitions.
REHMAll right. To Nick in Naples, Fla. Hi there.
NICKHi. Thank you for having me.
NICKMy question kind of relates to one of your other responses. Say the worst comes to worst and China ends up invading the Senkakus or, you know, setting boots on the ground somewhere on Japanese sovereign territory. Do you think that the United States would be obligated by its treaties with Japan or any other Asian country to respond and how that balance would work out or if we would just kind of politic around it?
DYERWell, by -- the U.S. government has said that it is obligated by treaty to defend the Senkakus, the Diaoyu Islands if the Chinese were to invade. But it's a very interesting question. And I'm sure there are lots of people and some people in China who think that the U.S. wouldn't want to get involved militarily against China to defend a bunch of what are really just a bunch of rocks in the sea. So it does leave this air of uncertainty as to whether the U.S. really would be there. But for the U.S., one of the issues would be, well, if they weren't to intervene, what would be the long-term consequences of that?
DYERAnd one of them would actually be, well, it would break apart the U.S.-Japan alliance. But what would happen in Japan if that happened? Well, what would likely happen is the Japanese would invest much more on their own military to increase their own capacity to defend themselves. They might look to develop a nuclear weapon. So there are all sorts of consequences that are very bad for the region, very bad for U.S. interests that would happen if the U.S. didn't intervene on the side of Japan as well. So it is a very difficult question, if that were to happen, what the U.S. would do.
REHMAnd to Jeffrey in Caledonia, Mich. Hi there.
JEFFREYHi. Thank you very much for your service to the community.
JEFFREYMy question would be, since we have a world economy, I think that there should be a coalition to work towards a world wage. A man or a woman in the United States making a wage to produce a widget, let's say, that same widget produced in China is basically cheaper because of the labor cost. If they were paid the same rate per widget as we are paid here, or a standard across the economy, there would be no reason for us to go overseas with our jobs and our corporations.
DYERWell, the thing to think about is that wages in China are rising very quickly and have risen very quickly for 20 years. China is no longer the sort of cheap manufacturing paradise that sometimes painted to be. Also, the Chinese factories are actually moving to places like Vietnam or Bangladesh because they're finding that the wages are cheaper there. So countries do try to get in on this phase of expanding their economy through cheap manufacturing.
DYERThey have a certain window. They can do it for a while. But eventually that catches up on them, and they have to move on to other things. They have to find different ways of generating wealth. And so one of the issues with a country like China in the next decade or so is, does it get caught in what people call -- economists call the middle income trap? Well, they've got to a certain level, but it's very hard to get beyond that sort of wage of around $10,000 a year. There are lots of countries that...
DYER...managed to get to that stage in the '60s and '70s, and '80s, but then find themselves trapped. That's been the story in lots of Latin American countries as well. It requires all sorts of different kind of policies by developing innovation, about encouraging entrepreneurship, about in some ways getting the state out of the economy. It's going to be very hard for China to do over the next decade.
REHMNumber of people concerned about the TPP. Let's see, Peter says, "As I understand it, the U.S. has the lowest tariffs of any industrialized nation, especially compared to China, Korea, and Japan. Wouldn't it make sense to raise tariffs as we raise the minimum wage to increase exports, bring jobs back here, and enable workers to afford the higher prices?"
DYERWell, just on -- those are facts of the TPP. China is not in the TPP, and actually South Korea is not part of it at the moment as well, although the U.S. does have a free trade agreement with South Korea. Now, the Japan example's a very interesting one. As the caller said, U.S. tariffs are generally much lower than most other countries. But that means the U.S. is actually giving away a lot less when it goes into some of these agreements and potentially has more to gain.
DYERSo you think about Japan, I mean, for 20, 30 years, the U.S. has been banging on Japan's door, trying to get it to tear down some of the protections it has for its markets and its industries. And TPP is potentially a way it can do that. So there's actually a potential, a very big win for the U.S. in this, that it gets this long-wanted access to the Japanese market that it's tried for so long and never really had.
REHMAnd here from John in Washington, "What is the greatest potential flashpoint between America and China? For example, countries like Taiwan, Japan. Or is it energy resources or something else?"
DYERUp until three years ago, people would have said that Taiwan was the big potential flashpoint. But what's happened in the last couple of years, this whole issue of the Senkaku, Diaoyu Islands, you have to say this is now on this list of one of the real potential flashpoints. You have to think, every single -- almost every day for the last year, Chinese fighter jets have been buzzing into or near the airspace around these islands. And Japanese fighter jets have been scrambling to respond to that.
DYERChinese ships have been in around, either in the seas around the islands or very near around there, and Japanese ships have been responding. China is -- it's almost certainly not going to invade the Senkakus in anytime in the future. That's not the risk. The risk is that this kind of game of chicken that is being played as both sides try to assert their control over the area that you get an accident, that some fighter jets collide and someone gets too cocky or too arrogant, someone makes a mistake.
DYERAnd before you know it, it gets escalated from a small incident, becomes a big incident. And that could be the thing that starts a shooting war.
DYERAnd, again, you have to think, this is involving the number two and the number three economies in the world with the number one economy backing up one of the sides. So the stakes are very, very high, even though the issues might seem to a lot of people very insignificant and trivial.
REHMTo Cincinnati, Ohio. Hi there, Zachary.
ZACHARYHi, Diane. I'm going to try to stay brief. I own a small business, and we import everything from China. They don't make anything in our industry in America. The one company that did got bought by Sony. And we can't embrace the Chinese like one of your other callers said 'cause that's a global domination. They -- I can't really get into it. It sucks. But they're manipulating the currency. And it's not true free trade. We pay almost twice as many taxes to import their goods to us as we do to give our goods to them.
ZACHARYIf I were to open up a company in Hong Kong, I could sell to myself in Hong Kong and make almost 15 percent on taxes selling to myself from Hong Kong to America. How are we going to handle China's growth and their recent economic boom when they're manipulating their currency and it's not truly fair trade between the two of us?
DYERThose are all very good points. But I go back to what I said earlier about, you know, Chinese wages are rising very rapidly. The era where China was very competitive in this kind of manufacturing, just by doing things cheaply, that's fast coming to an end. So for China to still be in the game in lots of years is going to have to add more. It's going to have to provide new products and new innovations that attract customers.
DYERIt's not going to be just able to survive doing this cheap manufacturing. In terms of the U.S., you know, over the last decade or so, the U.S. currency has weakened a lot. You now have all this shale gas and other alternative energies coming on, so there are lots of potential trends which could underpin a revival in U.S. manufacturing and U.S. exports over the course of a decade. These things don't change in a dime, but the long-term trends are not as dire against the U.S. and in favor of China as perhaps as you laid them out just there.
REHMWhat about Tibet? We've had a number of emails raising that question. And what happens there in terms of both China's relationship to Tibet and the U.S. relationship?
DYERIn my own personal view is that the Chinese policies in Tibet have been a substantial failure. They've tried to -- by using economic growth, they've tried to win sort of broader loyalty of the people in Tibet. And I think what the protest in 2008, where you had really an unparalleled protest movement, not just in Lhasa but really across the Tibetan plateau in 50 or 60 different cities, showed that that has simply failed, that the, you know, Tibetan people do resent being part of China.
DYERThere's still huge loyalty towards the Dalai Lama. And so this is a real potential flashpoint. I think you're going to get more of these kinds of cycles of political opposition and maybe even violence against the Chinese regime if they maintain those kind of policies of just trying to win loyalty through economic growth with very, very hard crackdowns on all kinds of Tibetan political identity or political expression.
REHMAnd you're listening to "The Diane Rehm Show." Let's go to Bob in Tahlequah, Okla. Hi. You're on the air.
BOBWell, thank you. Yeah, I just wanted to express my own point of view here that's kind of missing in the conversation. I don't think we should be competing with China. I don't think we are competing with China. Most people in this country aren't. I think the TPP is essentially driving things more in the hands of the corporations, the CEOs, not the people.
BOBI think the whole paradigm of what's being discussed here needs to go towards sustainability. China needs to become self-sufficient, which it well can. And the United States needs to become self-sufficient. The XL pipeline is -- and the TPP are two examples of what most Americans do not want to continue to see.
REHMAll right. Thanks for your call.
DYERI feel I'm becoming the pitch man for the TPP here. But if I can just have one more go, the underlying idea here for the U.S. is to have a trade agreement with lots of countries in Asia that actually raises certain standards or raises labor standards, environmental standards, standards for protection of intellectual property. And now that sets a certain level that will ultimately become a sort of, you know, modus operandi of international trade.
DYERAnd the Chinese will feel obliged to raise their game up to those standards. That's part of the underlying strategy. Now, the devil's obviously in the details. And, you know, it's clear from just the show the huge amounts of opposition and, you know, anxiety there is about the TPP. But I think there are potentially very big wins for the U.S. if it does go through with this.
REHMAll right. And finally to Tim in Lambertville, Mich. You're on the air.
TIMMr. Dyer, could you comment on the research effort underway by the Shanghai Institute of Physics to develop liquid fuel nuclear reactor technology? The effort employs several hundred scientists and engineers in anticipation of earning patents and international intellectual property rights which will apply to the only energy source that can actually replace hydrocarbon fuel on a massive sustainable scale.
DYERI'm embarrassed to say I do not know very much about this. I mean, I do know that China has invested very heavily in its own nuclear energy sector over the last decade or so. They're expanding a lot. But the underlying theme is that, you know, coal is still going to be a main source of their energy supply for years to come because it is the one thing they have and that there's only so many nuclear plants they can build, whether it's foreign technology or their own technology. That's never going to replace coal in the short term.
REHMHow much criticism did you come under for your reporting in China?
DYERI'm -- I've been through -- various times there were quite intense criticism. I'd say during the Tibet riots in 2008, there was a very, very strong backlash against the foreign media, partly orchestrated by the government. And that was a very ferocious moment to be -- you know, we got a lot of death threats at that time.
DYERBut the same time, you know, China's a very complex place. There's all sorts of people in China's society who actually, you know, read the foreign media because they think they're finding out more about what's happening in the country than they're getting some of the censored Chinese media. So you do get a lot of support from other bits of society as well. So it's a more complex picture. But I'd say definitely in the last two or three years, the government has really stepped up its pressure on the foreign media.
DYERThere have been lots more problems with getting visas renewed for foreign journalists. Once they're lost it, they're threatened to kick out almost the entire New York Times and Bloomberg bureaus. And so there are -- you know, they've sort of decided that, actually, it's quite good politics for them to beat up on foreign journalists. That plays quite well to a certain part of their audience.
REHMHmm. So they're not allowing new visas for The New York Times.
DYERSo there have been two or three people who have tried to come into China who haven't yet been given visas.
REHMAll right. Geoff Dyer of the Financial Times, his book is titled "The Contest of the Century." So interesting. Thank you very much.
DYERWell, thank you so much for having me.
REHMAnd thanks to all of you for listening. I'm Diane Rehm.
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