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"Canada can, within a positive friendly atmosphere, ask the Chinese government to resolve the Tibetan situation."

China's Rough Seas

July 23, 2010

By Kevin Drum
Mother Jones (USA)
July 20, 2010

On top of the jaw-dropping news that land values
in Beijing have increased 800% over the past
seven years, Gideon Rachman and others note that
China is also losing some of its best friends:
multinational CEOs, who have been a bulwark
against China alarmism but are now growing tired
of China's increasingly protectionist and
nationalistic business policies. Rachman thinks
that even taking account of its recent miscues
China is still playing a pretty smart hand, but Dan Drezner disagrees:

And here I must dissent from Rachman. In some
ways, I do think the Chinese government has been
pretty stupid over the past year in executing its
"Pissing Off As Many Countries As Possible"
strategy. China rankled the Europeans over its
climate change diplomacy at Copenhagen. For all
of Beijing's bluster, it failed to alter U.S.
policies on Tibet and Taiwan. It backed down on
the Google controversy. It overestimated the
power that comes with holding U.S. debt. It
alienated South Korea and Japan over its handling
of the Cheonan incident, leading to joint naval
exercises with the United States — exactly what
China didn't want. It's growing more isolated
within the G-20. And, increasingly, no one trusts its economic data.

This doesn't sound like a government that has
executed a brilliant grand strategy. It sounds
like a country that's benefiting from important
structural trends, while frittering away its
geopolitical advantages. Alienating key
supporters in the country's primary export
markets -- and even if Chinese consumption is
rising, exports still matter an awful lot to the
Chinese economy — seems counterproductive to
China's long-term strategic and economic interests.

In the long term, yes, most of these are just
nits that will soon be forgotten. Still, they add
up, and China is entering a phase in which growth
is almost certainly going to be harder to come by
than it has been for the past three decades. My
guess is that they know this and don't really
know what to do about it. I expect more in the way of stormy seas ahead.
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