“And then came the fundamentalist coup in Pakistan in 2013,” said Benton.
“Yes. Nuclear war between India and Pakistan over Kashmir was a real possibility and the global financial system went back into meltdown. Turned out that for China, 2008 and 9 was only a foretaste. 2013 precipitated the crisis in the Chinese banking system, the collapse of their stock market, urban unrest, then the Hong Kong massacre and the political crackdown that followed. The regime’s growth promise—the basis of that precarious balance domestically—had been broken, and the only way the party could stay in power was through brute force. But I would submit it didn’t have to be a Pakistani coup. There were numerous potential shocks at that stage, any number of things that could have disrupted the global economy and thrown Chinese growth into reverse. It could have been the crisis over the Iranian nuclear program. It could have been the Russian expulsion of foreign oil companies. It could have been lots of things, it could have happened a few years sooner as a few years later, but when it was the Pakistani coup that acted as the trigger, political upheaval in China was inevitable, because the guarantee of growth, the source of the regime’s legitimacy, was broken.”
“So what are you saying, Dr. Dean? We’re about to see another financial meltdown?”
“I don’t know about that, Senator. The reason I’ve gone through all this is I’m trying to point out the parallels—and some of the differences— in the China situation today. Their first year of significant economic growth after the 2013 crackdown was 2017. That means by now they’ve had roughly another fifteen years of growth. Today, again, the regime’s legitimacy is based on exactly the same trade-off as before—growth for control. We’re seeing the same disparities in wealth, the same demands for democratization. The difference, this time, is everything’s on an even bigger scale. Their GDP, as you know, is now bigger than ours. Back in 2013 it was under a third of ours. Their middle class numbers some four hundred million, still only a relatively small percentage of the country, but more than our entire population. Consequently, the democracy movement is stronger. The disparity in wealth between the city and the country is even greater than it was—this is a problem the regime just doesn’t seem to be able to solve. And this time round there’s a new element, an environmental opposition. Back in 2013 this was just developing, and the crackdown effectively stifled it for ten years. The Yangtze landslides got it going again and gave it a momentum that has proven pretty much unstoppable. With the degree of environmental devastation the regime has allowed, it’s growing strongly in both the city and the country. In fact, it’s about the only issue that unites the two sectors. The party’s fear of what will happen if growth ceases, therefore, is extreme. Yet for various reasons, the Chinese economy is as vulnerable to external shocks as it was back in 2013. Arguably it’s more vulnerable. The party knows this. In China, vulnerability is not only economic, it’s existential. In the U.S., a financial crisis threatens the party in government, not our form of government. In China, it threatens the regime. Maybe even the cohesion of the state.”
“So what’s the party going to do?” asked Benton.
Elisabeth Dean smiled. “Senator, there are five people in this room. That means we’re likely to get five opinions on that question.”
“Six,” said Larry Olsen. “I’m always good for two.”
Oliver Wu smiled.
“Elisabeth, go on,” said Olsen, and he took a sip of his scotch.
“The party is divided. There are elements that realize in the long term its model of control isn’t compatible with a growing, capitalist society. On the other hand, there are regressive elements that can’t conceive of any future but through the traditional form of party control and whose interests are tightly aligned to a continuation of the status quo. What I say about the party goes for the army, you can take that as read.”
“Except, if anything, the balance in the army is even more regressive,” said Sandy Chan.
Dean nodded. “We face numerous uncertainties, Senator. What are the relative strengths of the factions within the party? What’s the strength of the army relative to the party? If it comes to an open struggle, what’s the process by which the factions seek to win? Are we going to see a struggle within the party itself? Is the party going to split? Would the army seize control? If it’s a crisis that precipitates the struggle, will there be a functional response to the crisis itself, or will it be piecemeal, different things happening in different parts of the country?”
“What happened in 2013?”
“Good question,” remarked Olsen, as if he was a professor at a seminar. “Can I top you up, Senator?”
Benton handed him his glass.
“In 2013, Senator, the regressive faction within the party was clearly the stronger and was able to deal quickly with dissent both within the party and the army, and then to deal with unrest within the country in a more or less coordinated fashion. As a result, the response was functional. I mean that in a political sense—it was brutal, but it had clear objectives and it achieved them. The country held together and the party stayed on top. I don’t think we can say that would necessarily happen this time round. If the response isn’t functional, anything’s possible. The country could split apart, effectively if not in name. In many respects, provincial and even municipal government already wield more power than the central government in Beijing.”
Benton took his glass back from Olsen. He turned to Sandy Chan. “What’s your opinion?”
“I wouldn’t dispute anything Elisabeth has said. The opinions vary when you start to look at the relative strength of the different factions, the different individuals, and the ways they might behave. Our view at the Agency is that a considerable amount of positioning is already going on. Our sense is there’s a showdown coming, and it’s a question of how it’s precipitated. External events might do it, but it’s just as likely one of the factions will seize on a pretext to precipitate it.”
“What does that mean for us?”
“It means we’re a pawn in their game, sir.”
“Every country is a pawn in every other country’s game,” said Benton. “I’m wary of making statements in front of four foreign affairs experts, but isn’t that a fundamental fact of international relations?”
“Senator, you’ve got to look at China somewhat differently,” said Oliver Wu.
“I’m always a little mistrustful when I hear something like that, Dr. Wu. In my experience, in any walk of life, cases are rarely as special as they seem.”
“I understand, sir. But in China . . .” Wu paused. “As we all know, the party isn’t a communist party, whatever it calls itself, but it retains an aggressively statist philosophy, that everything can be sacrificed for the good of the state—which in reality, in the terms of their thinking, means the good of the party. And that includes not only domestic issues, but international as well. There is a difference, Senator, between China and most of the other countries you’re going to deal with in that respect.”
“Which other countries have you studied, Dr. Wu?”
“I’m a China expert, Senator.”
“So how can you make that comparative statement?”
“I have some familiarity with other Asian countries. I also have some familiarity with Russia.”
“But you’re not an expert in those countries?”
“No, sir.”
“And you still maintain China is a special case?”
Dr. Wu nodded. “From my understanding, sir, I do.”
Benton gazed at him. It was almost arrogant, the way Wu refused to back down. And yet his manner was anything but arrogant. It was almost apologetic, as if he was sorry that he had to keep insisting that he was right— but he was right.
“All right,” said Benton, “which faction is on top at the moment?”
Olsen interrupted. “I think maybe we need to give the Senator a brief introduction to the dramatis personae,” he said, and he looked in the direction of Elisabeth Dea
n.
“There’s President Wen,” said Dean, “whom you know, of course.”
“What did you think of his speech last week?” asked Benton.
“His New Year’s speech?” Dean shrugged. “Same every year.”
“So it didn’t mean anything?”
“No.”
Benton looked at Wu and Chan. They appeared equally unimpressed. Olsen smiled.
“So where does Wen stand?” asked Benton.
“His instincts have always been progressive,” replied Dean. “But he won’t sacrifice the party. He’s strongly influenced by the history of Gorbachev and the collapse of the Soviet Union. He’s studied it carefully. He won’t go down that route. When you’re dealing with Wen, that’s the thing to remember. He wants to be seen to be progressing—and he genuinely does want progress—but not at the risk of the party’s role. If he has to choose between the two, he’ll choose the party. He’ll choose stability.”
“So if we can give him a way to look progressive without threatening the party’s role, he might be interested.”
“That’s right, Senator,” said Olsen. “That’s Wen.”
“Right now, he’s trying to avoid a showdown,” said Chan. “Recently he’s tried to do that by building up a group of traditionalists after a period in which the progressives made headway. It’s a kind of balancing of forces he’s trying to achieve. The premier, Zhai, is a progressive who has seen his influence wane. Xuan Qing, the mayor of Shanghai, is still a force to be reckoned with, and probably the most outright progressive among the senior Chinese leaders.”
“What about the vice president?” asked Benton.
“Wen sidelined him years ago,” said Olsen.
Dean nodded. “Hui’s a nonentity. The most important of the group Wen’s promoted recently is Ding Jiahui, who now holds the public security ministry. This gives him control of elements of the security apparatus as well as influence across the provincial governments. There’s also Zhou Zhanwei and Wu Kejie. They’re all hardline protégés of Ex-president Zheng. Wen sidelined them at the start but now they’re back in favor and they’ve been elevated to full Standing Committee membership. In the meantime, they’ve all been busy creating independent power bases. Ding’s is by far the strongest.”
“The patronage system magnifies the effect through the tiers of the hierarchy,” explained Chan.
“Also, there are some senior party figures who try to adopt an unaligned stance,” added Oliver Wu. “The foreign minister, Chou, and the finance minister, Hu, particularly. Hu tries to maintain a kind of neutral, technocratic stance. But if things get hot, that won’t be possible. We think he may come down on the progressive side.”
“We’re not sure about that,” said Sandy.
“In the army, the key figure is General Shen Bihua,” said Dean. “He’s the ranking military officer on the Central Military Commission. Wen tries to keep him close, but it’s hard to say how much patience Shen would show in a crisis. Ever since 2013, the military hasn’t had a lot of respect for the political side. The party avoided a coup by a whisker.”
Benton frowned. “The message I’m getting is that we’re looking at an unstable country with a bunch of unresolved tensions, and the regime is splitting into camps around those tensions, the way you always see regimes doing in these circumstances. You’ve got those who are intent on retaining the status quo by suppressing the tensions —as they see them—-and those who believe the status quo can’t be retained, because the tensions can’t be suppressed, so they have to change. Now, I’m no historian, but history bets on the side of the second group, doesn’t it? Eventually, the tensions demand resolution, and in the long run that can’t be managed by trying to suppress them.”
“In the long run,” said Larry Olsen. “But it can be a damn long run, and history tells you that before that bet is won, an awful lot of side bets can be lost.”
“Agreed. So what are they going to do?”
“Crisis favors the regressives,” said Elisabeth Dean. “Continuity favors the reformers.”
“How so?”
“The reformers fear loss of control. They’re reformers, not revolutionaries. The regressives also fear loss of control, but feel they can impose it as long as they get started quickly enough. The reformers don’t want to have to impose control because that would undo their reforms. It would turn them into regressives.”
“So what happens?”
“As Sandy said, there may be an external shock that precipitates events. In that case, they scramble.”
“We think the regressive faction is better positioned,” said Chan.
“In which case, the reformers themselves may try to precipitate a crisis before that happens. One which they feel they can manage and will leave them in a superior position.”
“What if they lose control?” said Benton.
“They may. It’s a risky strategy. If they actually do lose control—even in one city, or one province—then they’re the emperor with no clothes. That’s the end of the ball game.”
“What would be the pretext if they had to manufacture one?”
“Taiwan’s a perenial possibility, but hard to control, and essentially it speaks to a traditionalist agenda. We don’t think the reformers would try that.”
“But if they lead in that,” said Chan, “they gain the credibility to deal with other issues from a reformist stance. We wouldn’t put it past them.”
“We think it’s very unlikely.”
“Senator,” said Oliver Wu, “the point here is, the only function of the United States in all of this is the extent to which it helps or hinders each faction’s plans.”
“I understand,” said Benton, and he turned back to Dean. “Let me ask you this. Say I’m involved in a negotiation with the Chinese government, or say I may be considering it, how do I handle it? Generally. What are the guidelines?”
“At the top level—understand who you’re dealing with. There is no Chinese government, there’s only the party. There is no party, there are only factions. Sometimes there aren’t even factions, but only individuals. Understand that person. How much power does he really have? What are his motives?”
“What else?”
“It would depend what the negotiation’s about.”
“Let’s put that aside. What else?”
“I know I’ve already said it,” said Oliver Wu, “but be aware that your only value to them is as a factor in their own domestic political considerations.”
“I said I understood that.”
“Senator, with respect...” Wu hesitated.
“What is it, Dr. Wu?”
“You said that very quickly. But if you think about what it really means . . .” Wu frowned, as if searching for a way to bring it home to the senator. “Sir, think about the way you might approach a major international issue, arms control in space or environmental migration or emissions reduction, for example. If you think about the way you’d approach it, what would go through your mind? I’m guessing here, but you might think of something that’s outside your own narrow partisan agenda. One or two things that aren’t just about how you’ll stay in power.”
“Of course there would be.”
“Well now imagine that you don’t.” Wu paused. “Imagine that’s the only test you use. For everything. How it helps you stay in power. Really imagine what the world looks like from that perspective.” Wu paused once more. “Now put yourself back on the other side of the table again, and you’re looking at a half dozen people who are exactly like that. And the biggest threat to them staying in power isn’t you, or anything you’re talking about, but the person sitting right next to them. Or maybe not. You don’t know. They might not even know. They might not even know that they don’t even know. These are the people with whom you’re trying to do a deal.”
Larry Olsen sighed demonstratively. “Ah, diplomacy! There’s nothing quite like it. The art of maneuver in the darkness. The triumph of perspicacity over unce
rtainty.”
Joe Benton glanced at Olsen impatiently. It was less than two weeks to his inauguration. The time for philosophy was over.
“Senator,” said Oliver Wu, “I’m not exaggerating. That’s what you’re dealing with here.”
~ * ~
Tuesday, January 18
Blair House, Washington, D.C.
Ultimatum Page 11
