05/04/2012 07:37 pm ET Updated Dec 06, 2017

The Curious Chen Crisis Spotlights Our Big China Conundrum

As if he didn't have enough geopolitical crises already.

President Barack Obama got a complicated new crisis to manage this week, this one in China, where blind dissident icon Chen Guancheng -- who, somehow, escaped house arrest in his village and made his way hundreds of miles to the U.S. embassy, where he received temporary sanctuary -- "voluntarily" left the embassy and returned to Chinese soil.

With supposed new safeguards for his freedom, it was hailed as a diplomatic success by Secretary of State Hillary Clinton. Then Chen said that he had been coerced to leave the U.S. embassy by Chinese government threats to incarcerate his wife. Or even kill her.

Then the activist reached out to Republicans in Congress, seeking to come to the U.S. on Hillary's plane when it leaves China. Clinton was there to work on bilateral relations with the Middle Kingdom, which already theatened a turn for the worse. Later, a resolution of sorts seems to have been achieved, in which Chen, joined by his family, will come to America "temporarily" as a new fellow of New York University.

The whole thing is very odd. How did Chen, who is blind, escape through layers of custody and get to and gain entrance to the U.S. embassy in the first place? Was he allowed to do so to create a crisis in the midst of high-level U.S./China negotiations? If so, why? If not, well, perhaps it's just an odd confluence of events.

It all highlights what a conundrum that leaders from Washington to California face in dealing with the challenges and opportunities presented by a clearly ascending and not very well understood China.

Chen Guangcheng, the blind Chinese activist, now says he wants to leave for the U.S. rather than stay in China, nixing a deal used to coax him out of the U.S. embassy in Beijing and defuse an impasse that strained China-U.S. ties even as he said he felt abandoned by U.S. officials. Chen, a self-taught legal activist, is under Chinese control in a Beijing hospital, having left the embassy on Wednesday.

Whatever is really going on with Chen, it could hardly have been less opportune, with Clinton and Treasury Secretary Tim Geithner in Beijing to try to work out better economic and financial arrangements with the fast-rising power, as well as try to coordinate efforts on the crises with North Korea, Iran, and Syria.

In the midst of it all, we of course have reflexive super-hawk Mitt Romney -- who toughed out the Vietnam War, which he strongly advocated, as a Mormon missionary in France -- saying Obama is weak and he would be tougher with China, whatever that means. Which is quite ironic, since Romney made his incredible fortune in the leveraged buyout business, a business in which I don't believe he ever went out of his way to alienate his lenders.

For the U.S. and China have a symbiotic economic relationship. We provide China with markets for their hyperactive export sector. China provides us with debt financing.

But China is on the rise, while the U.S., having made some massive mistakes, is struggling to hold on to its post-World War II and post-Cold War preeminence.

Yet China has big problems of its own, not the least of which is a huge and increasingly restive population which wants to share in a revolution of rising material expectations and chafes at the authoritarianism of one of the world's last Communist governments. China's government has reacted with alarm to the Arab Awakening, probably fearing such an awakening among its own people, as a result joining Russia, which also cracks down on internal dissent, in opposing widespread international moves to support human rights and democracy.

China has been much more assertive and aggressive with its neighbors lately, claiming nearly all the South China Sea despite the fact that many nations share it, and pushing forward with plans to create its own aircraft carrier battle groups and develop various advanced weapons systems that no other Asian nation, with the possible exception of Japan, could hope to counter.

Now it's coming up against calls from the U.S. and most of its neighbors to rein in its drive for export-driven economic eminence to take steps to stop depressing the yuan, much more stringently protect intellectual property rights, and sharply cut state subsidies to its corporations.

And China is resisting transnational environmental controls even as it moves very aggressively to take a leading global role in green technology.

As I discussed last November in The Huffington Post -- in "Darwinian: Obama Goes Post-Iraq in Oz, Republicans Race To the Past" -- Obama is rolling out the major beginnings of a post-Iraq geopolitical posture for the U.S. and a revamped political, economic, and security architecture in the Pacific Basin, in large part to counter the rise of China. Which has been undercutting U.S. industries and making new aggressive moves over the past year in the South China Sea -- most of which it claims, to the consternation of its neighboring countries -- and some threatening moves, as always, towards Taiwan.

As for the rest of Obama's strategy in what he calls the Asia Pacific, much of it hinges on Darwin, Australia. This lovely tropical city of 125,000 at the northern edge of Oz, which I've visited, is about to loom very large on America's geopolitical map. Though the numbers are small -- only a company of Marines at first, ultimately a brigade -- Obama has decided to flow US land and naval forces in such a way that the Australian base there will become a de facto joint base with the United States.

All the better to oversee the southern reaches of the South China Sea and Indian Ocean trade routes.

This is happening, incidentally, as Australia moves to make an early exit from Afghanistan.

As Obama makes his Asia Pacific moves, he does so with the U.S. much more popular in the region than China, according to a Gallup Poll survey late last year.

Across the vast region, 44 percent approved of the U.S. as a globally leading nation, while only 30 percent accorded China the same sort of regard. U.S. standing actually edged up since 2010, from 41 percent.

Only in Vietnam, where of course the U.S. fought a long, bloody, and disastrous war, and Malaysia were the U.S. and China viewed with equal approval. China was not a favorite in any nation.

Yet for all that, China is hardly, say, Nazi Germany. Nor is it even the old PRC. In a global economy, it's a huge emerging power with capital, creativity, and drive. And so many are trying to figure out how best to channel the positive while reining in the negative.

Former California State Controller Steve Westly, now a Silicon Valley venture capitalist, has traveled extensively in China and spoke earlier this year with the energy ministers of several countries, including Britain, Russia, Germany, and India. He notes that, at least in terms of express policy, key nations are beginning to move in a similar direction, working to determine the appropriate level of subsidies for wind and solar energy, develop a smart grid, and promote electric vehicles. China, he says, wants to have 500,000 electric vehicles on the road by 2020.

Meanwhile, as part of its energy strategy, the Obama administration is moving forward with plans to impose tariffs on Chinese-made solar panels, arguing that China is trying to take over the burgeoning market with unfair trade and labor practices.

It's one of the great historical ironies that China is so aggressive on green tech, since the PRC refuses to move on a global treaty for greenhouse gas reductions and has been very aggressive in coal-fired electric power.

China is the world's largest consumer of coal, greatly increasing the build-up of greenhouse gases. Nearly 70 percent of China's electricity comes from coal-fired power plants.

As productive and counter-productive as what China is doing, there is one thing its moves have in common. They are big. Frequently very big.

As a result, as former California Governor Gray Davis puts it: "China will be a big prod to force us to think long-term."

California, as one of the world's biggest economies in its own right, situated on the Pacific Rim, has a huge interest in the nation's geostrategic shift to the Asia Pacific region, and the rise of China which in large part precipitates it.

Earlier this year, Governor Jerry Brown hosted China's next leader, current Vice President Xi Jinping, on his two-day trip to the Golden State and announced new California trade offices in Beijing and Shanghai, as well as a California/China task force.

Brown, of course, was California's governor in the '70s and '80s when another Asian nation, Japan, was supposedly taking over the world economy. Or was it the Arabs who were taking over the world economy? Actually, in various alarmist circles, it was both. In the end, it was neither, so Brown can recall that there is usually opportunity in what seems to many to be disaster.

On a February trip to Washington, Brown held a a lunch meeting with Chinese Ambassador Zhang Yesui, then met with State Department officials. Not surprisingly, he plans a China trip later this year.

Brown's predecessor, Governor Arnold Schwarzenegger undertook a big mission to China as well in late 2010, not long before his second term ended. There he investigated the bullet train -- the U.S. is the only advanced industrial nation without high-speed rail, something California's current and recent governors intend to change -- as well as investment and trade opportunities.

It is all, in a favorite Brown phrase, a yeasty situation. One which became even more complex with the Chen affair, which overshadowed whatever prospects there were for progress in the Clinton/Geithner negotiations.

While it makes too much sense for the US and China to continue a relationship of creative tension, rather than heightened confrontation, there are no guarantees. Perhaps we will know more about what really happened with Chen when and if he makes it to New York.

You can check things during the day on my site, New West Notes ...

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