Daniel W. Drezner

Does strategy even matter in foreign policy?

Does strategy even matter in foreign policy?

Continuing on the grand strategy theme from yesterday, I see that China is blowing off the G-20

China tried to pre-empt a potential showdown at the upcoming G20 summit on Thursday when it warned the other large economies not to use the Toronto meeting as a platform to criticise its currency policy.

Fearing that the policy of pegging its currency to the dollar will come under attack, Chinese officials said the June 26-27 summit was not the correct place to discuss the level of the renminbi and cautioned against an outbreak of “finger-pointing”, which they said would be damaging to the world economy.

The comments will reinforce firming sentiment in Beijing that China is not readying a last minute anouncement on the currency ahead of the summit, despite the recent recovery in Chinese exports and rising anger in the US Congress….

A senior Chinese government official said that the G20 summit should be about co-ordinating policy, not criticizing individual countries.

“If we allow the G20 to turn into a process of finger-pointing, then it will certainly send out a very confusing and misleading signal to the markets,” he said. “This will certainly lead to very serious consequences in the global economy.”

Qin Gang, a Chinese foreign ministry spokesman, delivered a similar message. “We believe it would be inappropriate to discuss the renminbi exchange rate issue in the context of the G20 meeting,” he said.

In addition to the US, Brazil and India have also recently voiced criticisms of China’s currency policy. According to Reuters, a senior Canadian official said a stronger Chinese currency would benefit both China and the rest of the G20, although he added the G20 had to be careful not to put too much direct pressure on China.

A few thoughts.  First, as near as I can figure, here is the list of topics that Beijing feels would be "appropriate" to discuss at the G-20 meeting:  

1.  Debating the role of the developed world in triggering the global financial crisis

2.  Sorting out the redistribution of power in the IMF and World Bank towards rising developing countries

3.  Reaching agreement on cool G-20 uniforms for the next summit. 

4.  Reaffirming the global consensus that chocolate is awesome

5.  Hugging puppies.  Puppies!! 

Second, China’s strategy here is of a piece with their behavior over the past nine months or so, which, intentionally or not, could be characterized as "Pissing Off as Many Countries As Possible." 

Seriously, it’s a distinguished list.  The Europeans are furious at China because of how the country acted at Copenhagen.  The Japanese and South Koreans are furious at China because of how Beijing has handled the Cheonan incident.  India is unhappy with China’s naval aspirations, nuclear aid to Pakistan, trade imbalances, and an unsettled border.  A fair number of ASEAN nations are upset with China’s currency policies and its reassertion of territorial claims and spheres of influence in  the South China Sea.  And then there’s the United States, where despite some understanding between Obama and Hu, the People’s Liberation Army and the Ministry of Commerce seem bound and determined to derail any warming trend between the two countries. 

This is a long and distinguished list of countries to alienate.  It certainly signals a shift, intended or not, from the "peaceful rising" approach of the past decade or so.  It also appears to be bad strategy — simultaneously angering the countries that could form a balancing coalition is not an exercise in smart power.  And as I’ve said before, China has badly overestimated how it can translate its financial capabilities into foreign policy leverage. 

All that said, the question is whether poor strategy matters all that much.  Even if China’s property bubble bursts, the country possesses formidable advantages, and the trend lines in terms of economic and military do seem favorable to Beijing.  China is now the largest manufacturing power in the world, and its economy is imbricated in global production chains.  Its military is only growing stronger.  Robert Kaplan argues that it’s geographically well-placed.  It might be the case that enough countries in the list above — plus Russia, Brazil, Africa and the Middle East — decide that Beijing’s bellicosity is a price worth paying to stay in China’s good graces.  Indeed, the underlying assumption behind China’s policies is that nothing succeeds like success.  

A lot of commentators notice these material advantages, and then mistakenly infer that China has pursued a brilliant grand strategy.  At this point, however, China’s continued rise seems to be occurring in spite of strategic miscalculations, not because of them.  That’s the thing about grand strategies, however — they matter less when the margin for error is greater.  Which is why greater attention needs to be paid to U.S.. grand strategy now than before. 

Developing…..