Obama’s last China trip; Syngenta and CFIUS, militaries cozy in Djibouti

Welcome to issue 65 of U.S.–China Week. Programming note: Next week’s edition may be delayed or skipped, as I will be in transit. As always: Please encourage friends and colleagues to subscribe to U.S.–China Week. Here is the web version of this issue, ideal for sharing on social media. You can also find U.S.–China Week on Medium and on Facebook, and you can follow me on Twitter at @gwbstr. And please send your comments, quibbles, and suggestions to mail@gwbstr.com.

DIPLOMATIC CALENDAR
Obama’s 11th Asia trip as president includes G-20 in Hangzhou and ‘in-depth meetings’ with Xi

The White House announced President Barack Obama’s anticipated trip to Asia for the G-20 Leaders’ Summit in Hangzhou and the East Asia Summit in Laos will take place September 2–9. This is likely to be Obama’s last presidential trip to China, but Obama and Xi may have other opportunities to meet, including alongside November’s APEC Summit in Peru. A Xinhua article based on an interview with Ambassador to Washington Cui Tiankai pointed out that some negotiations toward the first U.S.–China communique took place in Hangzhou, and Cui remarked that “a return to a place full of historic meaning reveals a lot about the direction we should follow.” (Here’s a picture of Nixon in Hangzhou in 1972, and some memories from U.S. negotiators.) The White House statement was vague but expected “in-depth meetings” between Obama and President Xi Jinping, saying the pair would “discuss a wide-range of global, regional, and bilateral issues.” The Laos leg will mark the first visit by a U.S. president there, and will also include a U.S.-ASEAN Summit meeting. Obama is also to stump for the Trans-Pacific Partnership (TPP), for which the White House is reportedly planning a final attempt to gain ratification. / Meanwhile, foreign ministers from China, Japan, and South Korea are to meet August 24 in Tokyo, reportedly marking the first trip to Japan by a Chinese foreign minister since the Japanese government purchased disputed islands from private owners in 2012. A Chinese Foreign Ministry spokesperson was at pains to emphasize that the foreign minister “is not paying a visit (访问) to Japan. He is going to attend the 8th China-Japan-ROK foreign ministers’ meeting upon invitation (应邀赴日本出席).”

ANALYSIS: It is easy to conclude that Obama is already a lame duck when it comes to U.S.–China relations. For a long time, I have argued that was not yet true, but when it comes to major new initiatives that is now the case. This does not, however, minimize the importance of continued contact between the governments as their militaries continue to interact in proximity in the South China Sea. U.S. officials should emphasize that, while Obama’s term is ending, the next president is unlikely to substantially change U.S. policy regarding maritime issues. For strategic issues, all eyes will be on regional security after the G-20. For economic issues, the U.S. election (to the extent its outcome is in question) is a major source of uncertainty.

CROSS-BORDER INVESTMENT
ChemChina’s $43b takeover of Syngenta passes U.S. national security review

The Swiss agricultural biotech firm Syngenta announced that the interagency Committee on Foreign Investment in the United States (CFIUS) cleared a takeover deal with China National Chemical Corporation (ChemChina), removing what a Reuters source called “a major potential hurdle” in the deal. “’We are not disclosing the details of the agreement with CFIUS to respect the confidentiality of the process,’ a Syngenta spokesman said by email in response to a Reuters query. ‘Any mitigation measures are not material to Syngenta’s business.’” The U.S. Department of Agriculture, not typically one of the members of CFIUS, joined the ChemChina-Syngenta review, Reuters reported. / Meanwhile, The Wall Street Journal reported on U.S. political scrutiny of a Chinese acquisition of the Chicago Stock Exchange announced in February, which faces CFIUS and SEC approvals. / And a Chinese consortium announced a deal to acquire the online advertising firm Media.net for $900 million.

ANALYSIS: The CFIUS process is often seen as a political risk for Chinese investments that include the United States, and here is one that received more scrutiny than some others (bringing in an additional department). Still, it was approved, possibly with some mitigation measures. The real challenge for ChemChina may end up being Chinese domestic public opinion about genetically modified organisms.

R&R
China’s first dedicated overseas military facility under construction in Djibouti, host to U.S. and other militaries

Jeremy Page in the WSJ has a great story on the construction and context of China’s first overseas naval facility, under construction this year in Djibouti. “Due for completion next year, the naval outpost is expected to feature weapons stores, ship and helicopter maintenance facilities and possibly a small contingent of Chinese marines or special forces, according to foreign officers and experts monitoring its development. … ‘Steadily advancing overseas base construction’ is one of President Xi Jinping’s foreign-policy priorities, wrote Adm. Sun Jianguo, the deputy chief of the joint staff department and likely future naval chief, in a Communist Party magazine in April. … The U.S. base in Djibouti, Camp Lemonnier, has about 4,000 troops and is used for Special Forces and drone operations against jihadist groups in the region. It abuts Djibouti’s main airport, and attack helicopters and other U.S. military aircraft are often seen by the runway. The U.S. doesn’t want Chinese military aircraft, including drones, flying near its facilities. There is already discomfort that China has provided Djibouti’s air force with a turboprop plane, serviced by Chinese personnel, which U.S. officers say has been seen landing at an airstrip used by U.S. drones. In July, Djibouti’s air force received another two light transport aircraft from China.” Page reports Djibouti also hosts forces from France, Germany, Spain, Italy, and Japan. WSJ published a map of ports frequently visited by PLA Navy ships, and the twitterati quickly produced a map comparing it to Zheng He’s voyages.

#USChinaWeek1966 < — follow this hashtag on Twitter for more
‘Peking Denounces Moscow for Sharing Data with U.S.’

TOKYO, Monday, Aug. 22, 1966 (AP): “Communist China criticized the Soviet Union for transmitting to the United States information obtained from the Soviet weather satellite Cosmos 122. ‘This marks the further intensification of the U.S.S.R.-United States collusion,’ Peking’s New China News Agency said in a broadcast heard year yesterday. The Soviet Union announced Friday it had decided to make public weather information from its earth satellites. The decision came after a two-year delay on a promised ‘cold-line’ weather-exchange communications system.”

(Source: The New York Times. This entry is part of an ongoing feature of U.S.–China Week that follows U.S.–China relations as they developed in another era of change and uncertainty, 50 years ago.)

ABOUT U.S.–CHINA WEEK

U.S.–China Week is a weekly news and analysis brief that covers important developments in U.S.–China relations and features especially insightful or influential new policy analysis.

Graham Webster is a senior research scholar, lecturer, and senior fellow of the Paul Tsai China Center at Yale Law School, where he specializes in U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. His website is gwbstr.com.

Disclaimer: Opinions expressed here are my own (and I reserve the right to change my mind).

Subscription to U.S.–China Week by clicking here or e-mailing me is free and open to all, and an archive of past editions appears at my long-running website on East Asia and the United States, Transpacifica.

Contact: Follow me on Twitter at @gwbstr. Send e-mail to mail@gwbstr.com.

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