Despite growing criticism of China’s economic policies from both parties in Congress, U.S. Treasury Secretary Timothy Geithner decided not to label China a currency manipulator in early April. This decision seems to reverse President Obama’s February pledge that he would take a tougher stance on trade disagreements with China, and suggests that his administration will pursue a more diplomatic approach rather than play the blame game with its economic rival. Domestically, however, Senators Charles Schumer (D) and Lindsey Graham (R) have threatened trade sanctions, arguing that as long as China artificially keeps the yuan pegged to the dollar, making their goods artificially cheaper on the international market, American exports cannot compete.

While expected, Senators Schumer and Graham’s aggressive response is simply a misguided reaction to frustrations over unemployment in the U.S. This response caters to popular emotions and is not rational policy. Instead, the U.S. should adopt a more conciliatory tone toward China by persuading it to voluntarily revalue its currency and by addressing the issue multilaterally at the upcoming G20 economic summit in June. Doing otherwise threatens Sino-American cooperation on other significant issues such as environmental protection and a nuclear Iran. Besides, China already has its own motivations for devaluing the yuan and would be more likely to do so without U.S. finger pointing.

Recently, there seems to be increasing disagreement between the United States and China. President Obama’s visit to Asia last year revealed that China is unwilling to significantly budge on issues of human rights, national sovereignty, and environmental commitment. Part of this obstinacy comes from China’s distrust of America’s long-term intentions. Part, however, also comes from the aftermath of the global economic downturn. Having recovered from the economic crisis of 2008 much sooner and with more vitality than most other nations, China’s confidence on the world stage has grown significantly. The heavily controlled visit by Obama is just one example; China’s refusal to take the U.S. seriously at the Copenhagen climate summit by repeatedly snubbing Obama is another. In the past few months, confrontations involving Internet censorship with Google and arms trade with Taiwan have also revealed China’s increased assertiveness. These issues have long been points of criticism between the East and the West, but Premier Wen Jiabao’s sharp criticism of U.S. economic mismanagement last year reveals that China has become more vocal about its demands. China finally feels that the balance of power is beginning to tip in its favor and it will eagerly exploit this perceived truth through more assertive international policies.

For the United States, this new attitude makes China much harder to handle. Meeting stubbornness with its own obstinate policies will only result in a cooling of Sino-American relations, however. After President Obama’s call for a tougher stance on the undervalued yuan, China responded several days later by resolutely denying any future plans to change its policy. What the U.S. should realize is that the tough-on-China approach contributes to China’s refusal to back down in the first place. China is resisting American pressure for fear of appearing weak to the international community. The harsher than expected response from China after the U.S. announced plans to sell arms to Taiwan makes this trend increasingly clear. China’s warnings seem to be an attempt to defy American demands rather than legitimately protect its national security. Giving the perception that China is to blame for America’s trade deficit only decreases the chances of constructive dialogue.

Even without U.S. pressure, there are good reasons for China to revalue the yuan on its own. Although it recovered from the global economic meltdown rather quickly, Chinese monetary policy has overshot its mark and the country now runs the risk of an inflationary cycle. Consumer price inflation was reported at a modest 2.4 percent in March, but property prices rose 11.7 percent in the same month, suggesting an asset bubble that could spell macroeconomic woes for China. Moreover, lending during the first month of 2010 rose to $203 billion, surpassing the previous three months combined and forecasting future price increases. Banks are eager to increase interest rates to encourage saving, but fear that doing so would attract capital inflows from foreign investors and exacerbate inflation. A stronger yuan would cushion the impact of capital flows by making the purchase of Chinese currency by foreign investors more expensive and thus less attractive. Zhou Xiaochuan, the chairman of the People’s Bank of China, said last month that controlling the value of the yuan is an emergency measure that will end “sooner or later.” With exports in the month of February 8 percent higher than that of two years earlier, the Chinese export market is rebounding quickly and will soon no longer need protection from an undervalued yuan. In addition, a revaluation of the yuan is a step that China has taken in the past. In late 2007 and early 2008, consumer price inflation soared to 8.7 percent, reaching a ten-year high. China allowed the Yuan to appreciate until pegging it against the dollar several months later.

Another factor that weakens the rationale for increasing pressure on China is the overstated harms of an undervalued yuan to the U.S. economy. Certainly a cheaper currency makes Chinese goods preferable to American ones, but this affects only American companies in direct competition with Chinese ones. Instead of being harmed, companies that rely upon steel and electrical machinery to create their own products actually benefit from cheaper Chinese exports in these areas. The picture on the consumer-end is similar; many low-income American families rely upon cheap retail stores that import many of their products from China. Thus, even if balancing the trade deficit creates more jobs, Americans might not gain more purchasing power due to the loss of cheap products. Ultimately, whether there is a net gain in economic activity and jobs will depend on the ratio of direct competitors to companies that buy materials from China. Given the diplomatic costs of applying pressure, the benefit to the U.S. economy may not be worth the risk.

In the end, China will revalue the yuan on its own terms, not as a response to U.S. demands. Increasing the pressure will not only make currency revaluation less likely, but also will prove counter-productive toward other American goals in Asia. Both nations have traded accusations about engaging in protectionism, but neither has taken any dramatic measures. Alienating the Chinese with harsher rhetoric or imposing further protectionist measures may escalate tensions to the point of stifling trade, hurting both Americans and Chinese. China has already demonstrated its willingness to hinder free trade by setting a list of preferred suppliers to the government late last year. Outside the market, China may use its importance as the world’s largest emitter of greenhouse gasses to disrupt progress in the global movement for environmental protection. Perhaps most importantly, China has the ability to frustrate efforts to prevent a nuclear Iran by refusing to participate in multilateral economic sanctions of that country.

That is not to say that the U.S. ought to soften its stance against China. Doing so would also be dangerous. Appeasement would achieve the same effect of emboldening the Asian power by showing American weakness. Obama’s soft stance during his trip to Asia and the administration’s decision to postpone a meeting with the Dali Lama certainly did not make China sensitive to American concerns. Instead, the U.S. needs to walk a fine line between cooperating with its rival and appearing to give in to China’s new hubris. This means that the U.S. should continue to declare its own terms, but give China a chance to accept these terms voluntarily. Any more pressure might hurt Sino-American relations, but any less might encourage China to flaunt American interests further.

In a display of quid pro quo, President Hu Jintao attended a nuclear security summit and agreed to work with the U.S. to deter a nuclear Iran after the Washington delayed its report to Congress. This step in the right direction reveals that China is willing to meet cooperation with cooperation. Caving in to domestic pressure and raising the possibility of sanctions will only frustrate recent gains in Sino-American relations. Ultimately, each declaration against China makes cooperation with it more difficult. At times, this loss is outweighed by the benefit of standing resolute. Increasing pressure against currency manipulation, however, is not one of these times. Given the current inflationary pressure in China and the uncertain benefits of currency appreciation, the risk of inflaming Sino-American relations is simply too great. The U.S. should be willing to work toward effective policy solutions, while simultaneously refusing to capitulate to all of China’s demands. The most important question is where to draw the line.

Though few are optimistic that the community of nations will reach a substantive international agreement at the United Nations Climate Change Conference in Copenhagen this December, a renewed sense of urgency has prompted much discussion about the future of climate change control. An overwhelming majority of scientists agree that human-emitted greenhouse gases have caused the Earth to warm throughout the past half-century and will continue to raise global temperatures to dangerously high levels if emission rates do not slow. These warnings have created a general agreement among the international community that something needs to be done, but few countries have actually committed to substantive measures. The U.S. is no exception; it, too, has been, choosing to wait for others rather than bear the burden of leadership. As a nation with both the resources and responsibility to reduce carbon output, the US should, instead, lead by example, clearing existing domestic hurdles to fighting climate change. Doing so will motivate the rest of the world to follow suit.

Any movement toward reduced emissions cannot ignore the two largest emitters in the world: China and the US. Both industrial powerhouses produce a combined 40% of all greenhouse gases. If neither country is at the heart of climate change efforts from the beginning, global attempts to reduce emissions will be useless. By taking the lead, however, tangible US and Chinese carbon reduction policies will provide the international community with a workable goal. Of the two nations, the US, rather than China, is best positioned to take the lead on climate change. China, then, will do its best to follow the United States. Underdeveloped nations similarly turn towards the US for tangible greenhouse gas emissions reductions, realizing that, without the US, any emission reductions on their part will be a drop in the bucket. Without US leadership, an international climate change movement is impossible.

If the U.S. leads by example, the rest of the world will follow. The EU has already pushed Washington to set clear emissions reduction targets for the next few years and has pressured President Obama to take a more hard-line approach to climate change; they are on board. More importantly, China, surprisingly to some, has also shown its willingness to cooperate. Just a day after Obama announced concrete targets on emissions reductions, President Hu Jintao followed up with China’s own pledge. In the coming years, China will have to walk a fine line between environmental protection and economic growth. China has realized, however, that the two are not mutually exclusive but are, in fact, intertwined; without limiting the effects of climate change now, China stands, as all countries stand, to limit long term growth. As the world’s single largest emitter of carbon, China recognizes that it will shoulder much of the blame for—as well as the negative natural effects of—climate change if it does tangibly limit greenhouse gas emissions. The U.S. can expect an increasingly cooperative partner in Europe and China on the issue of climate change.

In particular, U.S. leadership on climate change has the potential to capitalize on China’s increasing willingness to cooperate on this particular issue by creating a precedent for further opportunities for more extensive bilateral cooperation in the future. The President’s recent tour of Asia produced little progress in Sino-American relations, as both countires failed to agree on issues ranging from human rights to China’s consistent devaluation of its currency. Obama, however, did make small breakthroughs on climate change. The series of practical measures announced during Obama’s meeting with Hu Jintao —including an electric-vehicles initiative and energy efficiency plan—suggest that emissions regulation may be a bridge towards stronger alliances with China. Leadership, however, must come first from the U.S., as Hu Jintao will likely be unwilling to act without assistance and promises from developed countries. There is strong public sentiment in China that the U.S. is urging its economic rival to embrace clean energy only as a means to undermine the Chinese economy. If Washington takes the first step in this regard, however, it can reassure the Chinese by debunking any suspicions that the U.S. is trying to gain an economic advantage over their country. Strong U.S. leadership on climate change will likely result in better relations between the U.S. and China.

Another concern that other nations have expressed is that unlike China, a relatively young and still developing industrial power, the U.S. has historically emitted more total climate-altering gasses than any other nation in the world. Therefore, the U.S. has the heavier obligation to take the lead on climate regulation especially since underdeveloped nations, which emit the least carbon, would receive the brunt of climate change’s devastating effects. If the worst offender of climate change is unwilling to step up as the leader, it would be difficult to justify the participation of anyone else.

Obama, as well as the Danish Prime Minister Lars Lokke Rasmussen, agreed in November that no binding follow-up to Kyoto would be reached in Copenhagen. In reality, what is to be the upcoming failure to act in Copenhagen is just another symptom of general inaction by all countries involved, none of which is willing to make the first move. The U.S. Senate has bound Obama’s hands, refusing to pass the cap-and-trade program unless China and other developing nations make a commitment, too. China and India, on the other hand, will only institute broader and more drastic measures if the U.S. promises substantive emissions reductions. Mutual hesitancy has certainly delayed any prospect of a binding international agreement.

For the U.S. to take leadership, Congress should not make legislation contingent upon the actions of other countries, but instead push the cap-and-trade system through, knowing that other nations will then jump on board. Doing so would demonstrate to the world that the U.S. is serious and committed to combating climate change. The Senate, however, has been particularly resistant to addressing climate change. Obama, already entrenched in difficult battles on health care and Afghanistan, may lack sufficient political capital to persuade reluctant senators. As a result, liberals run the risk of having to water down the current bill even farther than it already has been watered down in order to pass something.

Any reasonable carbon emissions bill that emerges from Congress will provide the U.S. with momentum that will then lead to a global emissions reduction agreement. Copenhagen will test how receptive the world is to American leadership and a global initiative against greenhouse gas emissions, but environmentalists should not expect much. At best, as former vice president Al Gore notes, “a very significant framework … can still be completed.” Instead, policymakers should place their hopes on the US and push for American leadership in a warming world.

Despite General Stanley McChrystal’s call for additional troops in Afghanistan, President Barack Obama has avoided decisive action on his administration’s most pressing foreign policy issue. While Obama’s caution is laudable, every moment of indecision contributes to a deteriorating political and military situation in Afghanistan. After weeks of deliberation, the time has come for strong presidential leadership to inject new hope into the flagging war effort. Obama should endorse McChrystal’s call for more troops and augment it with a shift in political strategy that emphasizes strengthening Afghanistan’s failing government from the ground up.

A successful strategy for Afghanistan must first target the endemic complications caused by the country’s dispersed tribal societies. The clear-and-hold strategy employed successfully in Iraq’s cities would be a logistical nightmare in the disconnected and remote villages of Afghanistan. Shifting tribal alliances often render the progress of successful operations irrelevant; soldiers secure one area and move to a second, only to find that Taliban forces have reemerged in the first.

Problems plaguing Afghanistan’s government worsen the situation in the field. Pervasive corruption and a lack of provincial governance have allowed insurgents to entrench themselves within everyday Afghan life. The Taliban maintains its strength through kickbacks and bribes from both government officials and private citizens. In some areas, the government is so weak and inept that Taliban members have essentially assumed all governing authority. In other areas, political leaders are so corrupt that there is no functional difference between the Taliban and the government, making the complete eradication of insurgents in those areas all but impossible.
In light of these challenges, the only solution for American forces lies in the combination of a full-throttle political and military surge. Obama should not simply replicate his predecessor’s strategies in Iraq.

Instead, the main component of the strategy should be engaging the Afghan government more rigorously, sending a message of partnership rather than occupation. The more that American officials complain in public about Karzai’s government and try to make policy unilaterally, the more difficult it becomes for the two governments to develop a productive relationship. Geographic challenges and corruption can best be addressed by including provincial and tribal leaders in central government discussions; the regions most in need of stable governance are those farthest removed from Kabul’s reach. The U.S. should help local leaders maintain legitimate rule while also facilitating dialogue with Karzai’s government. This approach would include providing security, conflict mediation, and economic support to tribal areas. Gradually, power-sharing between these groups could rein in politically distant regions as local leaders trade power for government support. By involving more Afghans in the decision-making process, this strategy would also help shed the perception that Karzai is simply a puppet of the West and enhance the central government’s legitimacy. To many Afghan people, the war is a struggle over who will govern them, and much of the battle involves perceptually defeating the Taliban and gaining the Afghans’ favor.

The Taliban should also be included in the governing process. The label “Taliban” is too often used as an umbrella term to describe all Pashtun insurgents in the region, and it obscures the fact that these insurgents are not a homogenous group. There are moderates within the Taliban who fight not for religious extremism but for economic survival. Negotiating with and providing alternatives for Afghans to make a living is crucial, since many currently join the Taliban in exchange for promises of profits from illegal trading and debt collection. Winning over these moderates would fragment the insurgency and weaken its military capabilities.

All of these solutions, however, require a troop commitment to improve security. The goal of elevating troop levels is not to stage a dramatic occupation but instead to stabilize and build local capacity. Currently, Taliban forces frequently threaten Afghans with violence and destroy infrastructure the moment it is built. Not only have the insurgents crippled the border regions, but they have also instilled a sense of paralysis among the people. Most Afghans, fearing retribution from the Taliban, do nothing to improve conditions in the region and thus further hamper foreign military operations. Troop deployment focused in Afghanistan’s rural South and East would decrease security risks, but equally importantly, it would allow for cooperation between American and Afghan armies. Training and equipping local forces increases American forces’ legitimacy in the eyes of the people and prepares Afghanistan for self-sufficiency.

Counterterrorism vs. Counterinsurgency
A False Dichotomy

Opponents of a troop increase advocate a scaled-down counterterrorism approach that targets only al-Qaeda members rather than the entire Taliban. Vice President Joe Biden, chief among these opponents, has called for surgical unmanned drone strikes in addition to special forces operations. Yet policymakers like Biden err in treating al-Qaeda as an entity separate from the Taliban. A March 2009 review ordered by President Obama portrayed the two groups as intertwined. Defeating both groups will require more combat troops. Assassinating al-Qaeda officials will only encourage further extremism among Taliban members who will move to fill the power vacuum.
Counterterrorism in Afghanistan must include components of counterinsurgency, the resource-intensive military doctrine that calls for extensive manpower to pacify dangerous regions. Special Forces operations rely heavily on intelligence and local bases from which to launch, assets that only a counterinsurgency campaign in the volatile regions of Afghanistan can provide. More importantly, surgical strikes exact a heavy toll on Afghan civilians. The inevitable cost of unmanned drone bombings is civilian deaths, which alienate the population and pose ethical concerns. The seeming cruelty of U.S. bombings creates tension between soldiers and civilians while further spreading anti-Americanism. In addition, even successful missions usually fail to alter the dynamic between Afghan locals and Taliban thugs, who continue to terrorize villages.

No More Delay
The War Must Be Won

The biggest challenge for Obama will be to strike a balance between an increased American presence and hostility toward further intervention. Doing so will largely depend on the attitude that both the administration and the soldiers themselves adopt. The Afghan people do not intrinsically loathe American soldiers. In fact, most prefer to interact with U.S. troops than with the Taliban. However, Afghans are tiring of failed promises and undue American aggression. Obama should therefore deploy Americans in tandem with local units and strengthen guidelines discouraging unnecessary loss of civilian life.
Despite the growing quagmire, the fight in Afghanistan is not impossible to win. Karzai’s recent acquiescence to the Independent Election Commission’s call for a runoff election demonstrates that the Afghan government is responsive to third-party pressure. In his first speech since winning the election, President Karzai committed to “launch[ing] a campaign to clean the government of corruption.” Though unlikely to result in immediate reform, Karzai’s speech opens the door for guarded optimism.
Obama must act decisively and approve a troop increase in Afghanistan. As McChrystal’s report confirms, “resources will not win this war, but under-resourcing could lose it.” Any inclusive approach requires more security and thus more resources. These commitments are a small price to pay compared to the potential dangers of a Taliban-dominated Afghanistan.