Chinese President Xi Jinping is paying a US visit to attend the 4th Nuclear Security Summit. A US-based scholar noted that the trip not only shows China’s will to beef up cooperation with the rest of the world, but also signals that China, which has kept a low-profile, is ready to play a bigger role in global governance.

During the two-day summit starting from Thursday, President Xi will also meet with his US counterpart Barack Obama.

Li Cheng, director of the John L. Thornton China Center of the Brookings Institute, said that Xi’s second visit to Washington DC in six months highlights that the two major powers are seeking cooperation rather than confrontation.

The new type of major-power ties between the two nations, with win-win cooperation and mutual respect at its core, advocates collaboration rather than conflict, saidLi, explaining that such a relationship emphasizes a desire for cooperation.

He also pointed out that Xi’s attendance at the summit shows China's willingness to further collaborate with the international community. "His attendance will be greatly welcomed," Li stressed, adding that China now plays a crucial role in climate change, cyber security, nuclear security and global economic governance.

"As a major power, China's voice should be heard, and views should be delivered," said Li. He also noted that the international community will continue to respect China's growing role in international affairs.

Though China has previously maintained a low-profile in global governance, its role has since increased, the scholar commented.

Along with its rising international status, China also shoulders more responsibilities and obligations in narrowing the rich-poor gap, promoting South-South Cooperation and other global affairs, he added.

Li also applauded the momentum of Sino-US ties, saying that the leaders of both nations are making far-sighted choices based on an expandedworld view and their fundamental interests.

Though some disputes emerged, they are far outweighed by bilateral cooperation, he noted, especially praising their collaboration in global issues.

"I believe their worldwide cooperation will generate a spillover effect, so that the two will better understand each other and advance cooperation," said Li. 

This piece originally appeared in People's Daily.

The most noticeable trend under the leadership of Xi Jinping since the 2012 National Congress of the Chinese Communist Party (CCP) has been the continuing consolidation of power. In particular, the military has been a key forum in which Xi has strengthened both his personal power and his new administration’s authority. Xi has adopted several approaches and political tactics to achieve this, including purging the two highest-ranking generals under the previous administration for corruption and other charges; arresting 52 senior military officers on various charges of wrongdoing; reshuffling generals between regions, departments, and services; attempting to systematically reform the PLA’s structure and operations; and, last but not least, rapidly promoting “young guards” (少壮派) in the Chinese military.

These bold moves will have profound implications—not only for Xi’s political standing in the lead-up to the next leadership turnover in 2017, but also for the development of civilian-military relations in the country and for the trajectory of China’s military modernization. The third installment in this series focuses on personnel changes that have occurred during the early phase of military reform.

Who are the rising stars in the PLA following the recent reorganization and reshuffling? What are the distinguishing characteristics of the “young guards”? What are possible explanations for and implications of some of the highest-level personnel changes, such as the retirement of the heavyweight military figure General Liu Yuan and the marginalization of Xi’s confidant General Cai Yingting? How does Xi successfully perform the delicate balancing act in personnel appointments by aggressively promoting his own long-time protégés and new loyalists while avoiding making too many enemies?

This is part three of a series that will appear in the upcoming issue of the China Leadership Monitor. Download the article in full below. The first paper in the series can be found here: Promoting "young guards": The recent high turnover in the PLA leadership (Part 1: Purges and reshuffles), and the second paper here: Promoting “young guards”: The recent high turnover in the PLA leadership (Part II: Expansion and escalation).

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On December 1, the Center on the United States and Europe (CUSE) at Brookings hosted a discussion exploring Russian power throughout history and how two of its most pivotal rulers—Josef Stalin and Vladimir Putin—defined Russian leadership and its role in the world in the 20^th and 21^st centuries. The discussion featured remarks by Stephen Kotkin, professor at Princeton University and author of the authoritative new biography, Stalin Volume I: Paradoxes of Power, 1878-1928 (Penguin Press, 2014).

In his book, Kotkin reveals Stalin as a ruler who is both astute and blinkered, diligent and paranoid, cynical and true-believing, charming and vicious. However, Stalin is more than just an eminent biography; it is a book about Russian power in the world as well as Stalin’s power in Russia, recast as the Soviet Union. Ultimately, Stalin offers an analysis of power—where it comes from, how it is utilized or squandered, and what its human consequences are.

Brookings President Strobe Talbott offered introductory remarks and moderated the discussion.  Prior to assuming the leadership of Brookings, Talbott served in the U.S. State Department as ambassador-at-large for the former Soviet Union and then as deputy secretary.

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• Putin and Russian Power in the World: The Stalin Legacy

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The announcement of King Abdullah’s death puts Saudi Arabia in the hands of his designated successor, Prince Salman. Salman has his own health issues and faces an immediate crisis on the kingdom’s southern border in Yemen. Continuity will be Salman’s hallmark, including close ties to Washington.

Now King Salman, born Dec. 31, 1935, who is also defense minister, has been chairing cabinet meetings for several months and handling almost all foreign travel responsibilities for the monarchy since he became the heir in 2012. He has visited China, Japan, India, Pakistan, the Maldives, and France since becoming crown prince after the death of his predecessor, Prince Nayif. He has hosted a series of Saudi allies like Pakistani Prime Minister Nawaz Sharif and Egypt’s president, Abdel Fattah Al-Sisi, who paid their last respects quietly to Abdullah in the last week.

Before becoming crown prince, Salman was governor of Riyadh province for 48 years. When he became governor in 1963, Riyadh had 200,000 inhabitants; today, it has more than seven million. Salman presided over this remarkable transformation with a record for good governance and a lack of corruption. Since most of the royal princes and princesses live in Riyadh, he was also the family sheriff, ensuring any transgressions were dealt with smoothly and quietly with no publicity. He knows where all the bodies are hidden.

Salman also oversaw the collection of private funds to support the Afghan mujahideen in the 1980s, working very closely with the kingdom’s Wahhabi clerical establishment. In the early years of the war, before the U.S. and the kingdom ramped up their secret financial support for the anti-Soviet insurgency, this private Saudi funding was critical to the war effort. At the war’s peak, Salman was providing $25 million a month to the mujahideen. He was also active in raising money for the Bosnian Muslims in the war with Serbia.

Salman’s sons include the first Muslim astronaut, Prince Sultan, and the governor of Medinah, Prince Faysal. Another son, Prince Khaled, is a fighter pilot in the Royal Saudi Air Force and led the first RSAF mission against Islamic State targets in Syria last year. The family controls much of the Saudi media. All will now be up-and-comers.

Salman has his own health issues and has had a stroke. (Persistent rumors of dementia are denied by the palace.) His successor was announced in February 2013 to ensure continuity. Second Deputy Prime Minister Prince Muqrin was born Sept. 15, 1945 and was educated at the Royal Air Force College in England before becoming a pilot in the Royal Saudi Air Force. Later, he was governor of Medinah province and then head of Saudi intelligence. Muqrin is now crown prince.

Abdullah, Salman, and Muqrin are sons of the modern kingdom’s founder, Abdelaziz Ibn Saud, who had 44 recognized sons. The survivors and their heirs constitute the Allegiance Council, which Abdullah created in 2007 to help choose the line of succession. In practice it has only ratified the king’s decisions after the fact.

Muqrin is widely believed to be the last capable son of Ibn Saud. So now that Muqrin has ascended to the crown prince position the kingdom will face the unprecedented challenge of picking a next in line from the grandsons of Ibn Saud. That will raise questions of legitimacy not faced in the last century of Saudi rule.

Abdullah has been the de facto ruler of the kingdom since King Fahd suffered a debilitating stroke in 1995; he became king a decade later when Fahd passed away. A progressive reformer by Saudi standards, Abdullah gave the kingdom 20 years of stability. Salman is likely to provide continuity. The House of Saud values family collegiality and harmony highly. The two previous Saudi kingdoms in the 18th and 19th centuries were wracked by family internal squabbles which their foreign enemies exploited. Eleven of 14 successions were contested and the Saudis ended up in exile in Kuwait until Ibn Saud created the modern kingdom in 1902.

With the Arab world facing its worst crisis in decades, the royals will want to present an image of stability and strength. This is especially true with the collapse of the pro-Saudi government in Yemen, which will be Salman’s first crisis.

The Zaydi Houthi rebels who have all but disposed the pro-American government in Yemen this week have a slogan which reads, “Death to America, death to Israel, curses to the Jews and victory to Islam.” The collapse of President Abd Rabdu Mansour Hadi’s government, which openly supported American drone strikes in Yemen against Al Qaeda in the Arabian Pennisula for the last couple of years, puts a pro-Iranian anti-American Shia militia as the dominant player in a strategically important country. The Bab El Mandab, the straits between Asia and Africa, are one of the choke points of global energy and geopolitics. The leader of the Houthis gave a triumphal speech Tuesday and Iranian diplomats hailed his victory. The Houthis have fought a half-dozen border wars with the Saudis, who spent billions trying to keep them out of power.

The Houthis’ victory also ironically benefits AQAP by polarizing Yemen, the poorest country in the Arab world, between Shia and Sunni with AQAP emerging as the protector of Sunni rights. AQAP is fresh off its attack on Paris and has grown since 2009 into the most dangerous al Qaeda affiliate in the world. It is dedicated to overthrowing the House of Saud. Salman will have his hands full immediately.

This piece was originally published by The Daily Beast. 

In “Designing Pan-Atlantic and International Anti-Crime Cooperation,” a chapter for the new book, Dark Networks in the Atlantic Basin: Emerging Trends and Implications for Human Security (Center for Transatlantic Relations, January 2015), Vanda Felbab-Brown discusses the context and challenges of designing policies to counter organized crime and illicit economies in West Africa. She argues that although large-scale illicit economies and organized crime have received intense attention from governments and international organizations since the end of the Cold War, the strategies designed to combat these developments have been ineffective and, at times, counterproductive. Many populations experiencing inadequate state presence, great poverty, and social and political marginalization are dependent on illicit economies; and policies prioritizing suppression of these economies can, paradoxically, increase the economic and political capital of criminal or militant groups.

The recent drug trade epidemic and the connections between various illicit economies and terrorism have cast a spotlight on West Africa, Felbab-Brown explains. But in analyzing how the drug trade affects West Africa, it is important to note that preexisting institutional and governance deficiencies crucially amplify the destabilizing effects of the drug trade. Neither the  drug trade nor the entrenchment of political corruption and misgovernance in West Africa are new phenomena emerging in the wake of cocaine flows through the region. Rather, political contestation in West Africa has long centered on the capture of rents from legal, semi-illegal, or outright illegal economies such as diamonds, gold, timber, cacao, human trafficking, and illegal fishing, resulting in a pervasive culture of illegality, in which society expects that laws will be broken, enforcement evaded, and that the state will be the source of rents rather than an equitable provider of public goods. A long history of rentier economies, illicit activity, smuggling, endemic corruption, weak institutions, and governance as mafia rule—that provides exceptions from law enforcement to the ruler's clique—has left West Africa with what Felbab-Brown terms the technology of illegality and the state as mafia bazaar.

This context makes West Africa a particularly vexing area for policymakers and international donors who want to combat militancy or organized crime in West Africa. The United States and international community should consider any intervention in the region strategically, calibrating assistance packages to the absorptive capacity of the partner country, focusing on broad state-building, and fostering good governance. The priority of the United States must be to combat the most disruptive and dangerous networks of organized crime and belligerency, recognizing that anti-crime interventions cannot eradicate the majority of organized crime, illicit economies, and drug trafficking in the region. Moreover, efforts by external donors, such as Colombia or Brazil, to transfer policy practices to West African countries need to carefully consider which external lessons and policies are suited for local contexts.

The full book, Dark Networks in the Atlantic Basin: Emerging Trends and Implications for Human Security, is available for purchase from The Brookings Institution Press.

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Less than four months after ascending the throne, Saudi King Salman bin Abdul Aziz Al Saud has made unprecedented changes in the line of succession that benefit his own son Prince Mohammed bin Salman. These shifts come as Salman pursues the most assertive foreign policy in recent Saudi history.

The king removed the sitting Crown Prince Muqrin, his half brother, and promoted the third in line Prince Mohammed bin Nayef, his nephew, up to number two. Salman made his own son, Mohammed bin Salman, the new number three. The King also replaced the ailing foreign minister, Prince Saud al Faisal with a non-royal, the current ambassador to Washington, Adel al Jubeir. Prince Saud had been Foreign Minister since 1975.

According to the royal palace, Prince Muqrin asked to be replaced, but no reason was given. No crown prince has ever given up the position in the history of the modern kingdom, founded in 1902. When Salman ascended the throne in January, the press trumpeted Muqrin as heir and there was no sign he was not eager to be the next in line. Many will assume he was asked to quit.

Speculation will be intense about why that might be. Muqrin was a protégé of the late King Abdullah. He is not close to Salman's branch of the family, the Sudeiris. He also appeared less enthusiastic about Salman's war in Yemen. As a former fighter pilot Muqrin understands the limits of air power, and he may have had doubts about the wisdom of what was initially called Operation Decisive Storm, but has now become a stalemate.

The new crown prince, 55-year-old Mohammed bin Nayef, is famous for defeating Al Qaeda's violent attempt to overthrow the House of Saud a decade ago. MBN, as he is known, led a four-year counter-terrorist campaign that decimated Al Qaeda in the Kingdom and drove its remnants into Yemen. In the process MBN survived at least four assassination plots. His father, the late Crown Prince Nayef, was so reactionary he was nicknamed the Black Prince. But MBN studied in Oregon and with the FBI and Scotland Yard before joining the Saudi interior ministry. He also holds the position of chairman of the Kingdom’s security and political committee coordinating all security issues.

Mohammed bin Salman, MBS, is the face of the Yemen war. He became defense minister in January and has been constantly on Saudi TV appearing to direct the war effort and meeting with foreign leaders to win support for the campaign against the pro-Iranian Zaydi Shia Houthi rebels. He is considered ruthlessly ambitious and is very close to his father. He has given up his position as chief of the royal court but he will undoubtedly keep control of access to the king.

Unlike most Saudi princes, MBS was not educated in the west. Instead he studied at King Saud University. There is controversy over his age, reputed to be anywhere from 29 to 34 (officially his birthday is July 24, 1980). He is chairman of a number of young people's organizations in the Kingdom and seeks to portray himself as the leader of the next generation of Saudis. He also chairs the powerful development and economics committee that coordinates economic policies, including oil price and supply.

In promoting his nephew and son, King Salman is passing the torch to the next generations of royals. Since 1902 the Kingdom has been ruled by the founder of the modern Kingdom Ibn Saud Abd Al Aziz or his sons. Now, Salman will be the last son to reign.

These changes have all been endorsed by the Allegiance Council, the committee of the sons and grandsons of Ibn Saud, but the legitimacy of selecting the next generation has been a question mark over the succession process for years. The king hopes it is now all settled.

The late King Abdullah's own son, Prince Mitab, has kept his powerful position as commander of the Saudi National Guard. The SANG is the family’s praetorian guard, it defends the capital, the holy mosques in Mecca and Medina and the oil industry. SANG troops have occupied Bahrain, the Kingdom’s tiny island neighbor, since the Arab Spring in 2011 to keep a minority Sunni monarchy in power.

The new lineup is solidly pro-American but riven with doubts about American reliability. The royals believe George W. Bush foolishly let Iran gain dominance in Iraq and fear Barack Obama is too eager for a nuclear deal with Iran and a grand rapprochement with Tehran. Repeated assurances by Obama and concrete support for the Yemen war have not altered Saudi doubts about America.

Salman's decision to wage war in Yemen so soon after coming to the throne reflected his acute concern that Iran was gaining a foothold on the Arabian Peninsula in what has always been the soft underbelly of Saudi Arabia, Yemen. The Zaydi Houthi rebels are not pawns of Tehran but they did initiate direct air flights between Sanaa and Tehran early this year, offered Iran port facilities and negotiated a lucrative oil deal. A few Iranian Revolutionary Guard advisers have been assisting the Zaydis for the last few years covertly. From Riyadh's view Iran already dominated decision-making in Baghdad, Damascus and Beirut, it does not want a fourth Arab capital to be aligned with Tehran.

But Salman's intense effort to secure wide Islamic backing for the war has been less than a success. Oman, Yemen's other neighbor, has opted not to join with the other five members of the Gulf Cooperation Council in the fighting, instead staying on the sidelines. The Pakistani parliament voted unanimously to keep neutral and rebuff repeated Saudi requests for ground troops to aid the war effort. Pakistani officials have privately suggested Salman panicked into the war without a viable strategy to get the Houthis out of Sanaa. Even Egypt, which benefits from billions in GCC aid, has opted not to send troops. although it's navy is supporting the Saudi blockade of Yemen.

The Yemen war is part Saudi-Iranian regional rivalry, part the unfinished business of the Arab Spring revolutions and part sectarian Sunni-Shia animosity. It is above all the Salmans’ war, father and son together. The surprise elevation of MBN and MBS underscores how the stakes in this war are crucial, not only to Yemen's future but increasingly to the future of the House of Saud.

This piece was originally published by The Daily Beast.

The G-20 Summit begins in Brisbane, Australia this Saturday, November 15. Leaders are descending on the city to tackle the biggest economic challenges facing the planet. A major theme of the discussions will likely be convergence—the rapid approach of average incomes in low- and middle-income countries towards those in advanced economies—and its sustainability. In a recent brief in the Brookings Global Think Tank 20 series, I explore this issue in the sub-Saharan African context, examining what has been holding the region back, how Africa might reach the rapid convergence seen by other emerging economies, and if and how convergence might be sustained. For my full brief, see here.

As most know, despite the “growth miracles” happening on the continent, sub-Saharan Africa still has a long way to go. Africa’s economic growth started much later and has gone much slower than the rest of the developing world; thus its per capita income gap against advanced economies still remains quite large. In fact, Africa hasn’t even converged with other emerging economies (see Figure 1). 

In addition to slow growth, Africa faces many, many challenges: Conflict-ridden countries still face a declining income per capita, and inequality is rampant. While Africa’s poverty rate is dropping, its share in global poverty is not: In 1990, 56 percent of Africans lived on under $1.25 a day, meaning that they represented 15 percent of those in poverty worldwide. Over the next 20 years, the region’s poverty rate dropped to 48 percent, but its share of global poverty doubled. At this rate, many predict that by 2030 Africa’s poverty rate will fall to 24 percent, but represent 82 percent of the world’s poor (Chandy et al., 2013). 

Of the utmost importance for convergence, though, is the issue of structural transformation in the region. If sub-Saharan Africa can reduce its reliance on unproductive and volatile sectors, it will build a foundation on which economic growth—and convergence—can be sustained.

Currently, African economies are characterized by a reliance on natural resources, agriculture and a budding services sector. Natural resources are, and will likely continue to be, major drivers of Africa’s economic growth: About 20 African countries derived more than 25 percent of their total merchandise exports in 2000-2011 from them. Unfortunately, this dependence on natural resources comes hand-in-hand with challenges such as financial volatility, rent-seeking behavior, and a loss of competitiveness, among many others—making a turn away from them necessary for long-term, sustainable growth. Similarly, most African economies depend heavily on the low-yield agriculture sector—its least productive sector and with the lowest income and consumption levels.

While labor has been moving out of the agriculture sector, it is moving into the services sector. From 2000-2010, the agriculture labor force share fell by about 10 percent while services grew by 8 percent (McMillan and Harttgen, 2014). While much of the movement into the services industry has been into productive areas such as telecommunications and banking, most service sector jobs in sub-Saharan Africa are informal.  Although informal activities offer earning opportunities to many people, they are often unstable and it is far from clear that they can be an engine of sustainable and inclusive high economic growth. In addition, growth in the services sector overall has historically not shown the economic returns that industry has.

If policymakers can enhance productivity in the services sector, then growth could take off even more rapidly, but until then, the highly productive manufacturing sector will be the key to Africa’s convergence. (For more on this, see the attached PowerPoint presentation.)

The Missing Piece: African Industry

Industrialization in Africa is low: Manufacturing–the driver of growth in Asia—employs less than 8 percent of the workforce and makes up only 10 percent of GDP on the continent (Rodrik, 2014). In comparison to the 8 percent growth in the services sector from 2000-2010, manufacturing saw only 2 percent growth (McMillan and Harttgen, 2014). In addition, the region’s manufacturing sector is dominated mostly by small and informal (and thus less productive) firms. Since the research has shown that industry was key to the explosive and continued growth in Asia and Europe, without concentration on or support of the manufacturing sector, African economies are not likely to replicate those convergence dynamics (Rodrik, 2014). Thus, Africa’s slow pace of industrialization means that, in addition to its late start time and its past sluggish growth, the region has another obstacle towards convergence.

There is hope, however; there are already hints that structural transformation might be happening. The recent rebasing of Nigeria’s economy revealed some important new trends. There, the contribution from oil and gas to GDP fell from 32 to 14 percent, and agriculture from 35 to 22 percent. At the same time, the telecommunication’s contribution sector rose from 0.9 to 9 percent, and manufacturing from 2 to 7 percent.

Achieving a successful economic transformation will help capitalize on improved growth fundamentals and achieve high and sustained per capita growth rates. However, for such a process to yield lasting benefits, it is crucial to better understand the ongoing structural changes taking place in Africa. This is an important task for economists studying Africa and, in addition to achieving a “data revolution,” both meta-analysis and case study methods can be useful complements to the current body of research on the continent.

References

Chandy, Laurence, Natasha Ledlie, and Veronika Penciakova. 2013. “Africa’s Challenge to End Extreme Poverty by 2030: Too Slow or Too Far Behind?” The Brookings Institution, Washington D.C. April 2013, http://www.brookings.edu/blogs/up-front/posts/2013/05/29-africachallenge-end-extreme-poverty-2030-chandy

Rodrik, Dani. 2014. “An African Growth Miracle?” NBER Working Paper No. 20188, June. http://www.nber.org/papers/w20188

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As the G-20 Summit concluded in Brisbane, Australia on November 16th, it set a target to achieve an incremental jump in global GDP growth of 2 percent by 2018 and made commitments to creating a Global Infrastructure Investment Initiative (GIII) to address an estimated $5 trillion per year in infrastructure needs around the world. 

It is a valid policy idea to expose the gap between current and potential rates of economic growth to the public. That the Australians put the spotlight on this growth gap was the central achievement of their G-20 Summit in Brisbane. It is a contribution to the global effort to energize the global economy and generate both greater and smarter growth. The question is, will it work? 

The gap between potential and actual growth has more to do with the patterns and sources of growth than the rates of growth. It is certainly necessary to continue to use monetary and fiscal policy to stimulate aggregate, demand-driven growth, but it will not be not sufficient.  

The people-problem in global growth has to do with structural obstacles: market dynamics of globalization tend to increase income inequality; technologies can be labor displacing rather than labor absorbing; and the knowledge-economy requires technical skills that are more sophisticated than investment-driven industrialization.  

As a result, the focus is now on structural policies and reforms, an issue on which the OECD has been an international leader. OECD Secretary General Angel Gurria jointly released an OECD report with Australia Minister of Finance Joseph Hockey in February of this year. At the G-20 Summit in Brisbane, Gurria said that it was possible that the global growth effort by the G-20, which the OECD and IMF are monitoring, could “overshoot” the 2 percent target.  

Discussing structural reforms tends to “get in the weeds” quickly, since the details vary by each country’s circumstances—as made clear by Brisbane’s G-20 Action Plan. Going from the Brisbane G-20 Summit to regional, ministerial, and national agendas and actions becomes the next phase in this effort to boost global growth by shifting the patterns and sources of growth. 

A key component in closing the growth gap will be the aforementioned Global Infrastructure Investment Initiative. The GIII is the culmination of a long discussion involving the G-20, the World Bank, the regional development banks, the private sector and others on how to accelerate much-needed investment in infrastructure—globally, and on a scale that can make a difference, especially in an era of fiscal policy constraints.  

The relationship between private and public investment in global infrastructure and other global growth projects is tricky. Just because many governments face reduced flexibility with fiscal policy at the moment does not mean that the responsibility for infrastructure investment can or will or should be picked up by private investors, much less private financial institutions and markets. The public and private sector each have a vital role. One will not work without the other.

Yet rules and norms do have to be worked out to incentivize private investment in infrastructure. This work is well underway and embodied in the Brisbane GIII. Incremental investment in global infrastructure adds up over time, and prudent direction of financing toward the most impactful projects can be a big boost to global growth and directly have an impact on peoples' lives. This is the kind of people-oriented action G-20 leaders were looking for in Brisbane.

Setting incremental “reach goals” is not just a word game or publicity play. It has proven to be a means of mobilizing resources, policies and efforts by diverse actors to stimulate higher-order results than might otherwise have happened. Just engaging in projecting likely growth outcomes can set the bar too low. In fact, all global goal setting is meant to motivate and mobilize momentum for just such incremental efforts. 

Taken together, a combination of structural reforms, infrastructure investment and continued growth-oriented monetary and fiscal policies can make a real difference in boosting global growth. This combination makes the Brisbane target of an additional 2 percent of global GDP growth by 2018 a feasible, even if ambitious, goal.

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The world’s top economies had much to discuss at the G-20 summit in Brisbane, Australia last month, including reinvigorating global growth, the reduction of trade barriers, financial regulation reforms, and global infrastructure. The G-20 meeting took place at a key time for U.S. international economic policy, as it came on the heels of President Obama’s prior stops at the APEC summit and the ASEAN summit. As the U.S. joins its G-20 colleagues in aiming to boost G-20 GDP by an additional 2 percent by 2018, there remain many questions about how G-20 countries will follow through with the goals set in Brisbane.

On December 3, the Global Economy and Development program and the Economic Studies program at Brookings welcomed U.S. Treasury Undersecretary for International Affairs Nathan Sheets in his first public address since being confirmed in September. Following the recent G-20 meeting, Sheets discussed his perspectives on priorities for international economic policy in the years ahead across key areas including trade, the international financial architecture, and the United States’ evolving economic relationships.

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• U.S. Economic Engagement on the International Stage: A Conversation with U.S. Treasury Undersecretary Nathan Sheets

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“Although we are seeing a strengthening recovery in the United States, the overall performance of the global economy continues to fall short of aspirations,” said Treasury Undersecretary for International Affairs Nathan Sheets to a Brookings audience yesterday. In the event, hosted by the Global Economy and Development program and the Economic Studies program at Brookings, Undersecretary Sheets described six “pillars” that form his offices “core policy agenda for the years ahead” to support “a growing and vibrant U.S. economy.”

1. Strengthening and rebalancing global growth. Undersecretary Sheets noted the “persistent and deeper asymmetry in the international economic landscape,” and called for policymakers to “work together toward mutually beneficial growth strategies” such as boosting demand.
2. Deepening engagement with emerging-market giants, such as China, India, Mexico, and Brazil. On India, for example, the undersecretary noted that “faster growth, deeper financial markets, and greater openness to trade and foreign investment promise to raise incomes, reduce poverty, and bring many more Indians into the global middle class.”
3. Framing a resilient global financial system. “To be sustained,” he said, “growth must be built on a resilient financial foundation.” (See also Federal Reserve Governor Lael Brainard’s remarks yesterday on the Fed’s role in financial stability.)
4. Enhancing access to capital in developing countries. “Expanding access to financial services for the over 2 billion unbanked people in the world promises to open new possibilities as the financial wherewithal in these populations grows,” he said.
5. Promoting open trade and investment. Undersecretary Sheets explained that “Increased U.S. access to foreign markets, and the consequent rise in exports of our goods and services, is an important source of job creation in the United States.” He described current trade priorities, including the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), the Information Technology Agreement (ITA) concerning China, and the Trade Facilitation Agreement (TFA) concerning India.
6. Enhancing U.S. leadership in the IMF. Undersecretary Sheets said that Treasury and the Obama administration “are firmly committed to securing approval for the 2010 IMF quota and governance reforms.” Citing the widespread support already in place for these policies, Sheets argued that “without these reforms, emerging economies may well look outside the IMF and the international economic system we helped design, potentially undermining the Fund’s ability to serve as a first responder for financial crises around the world, and also our national security and economic well-being.” He also called on the Senate to confirm six administration nominees as executive directors or alternate executive directors at the IMF and multilateral development banks.

Watch the video here:

Get a transcript of Undersecretary Sheets’ prepared remarks here.

Brookings expert Donald Kohn, the Robert S. Kerr Senior Fellow, moderated the discussion. The speaker was introduced by Senior Fellow Amar Bhattacharya.

We will likely look back on 2015 as a consequential year in China’s evolving global strategy. The September crash of the stock market in Shanghai marks the first contemporary occasion when China’s internal difficulties have had global consequences. In November, China will take over the leadership of the G-20 and have an opportunity to put its stamp on the evolving tools of global governance. And on September 28, President Xi Jinping will address the world during the 70th anniversary of the only global body in which China already has full powers—the United Nations.

A rising power, cut from different cloth

But with greater consequence comes greater responsibility. President Xi’s job at the U.N. in 2015 will be harder than in recent years. For the past several years the international community has been transfixed by the narrative of the rising powers, and of American, or at least Western, decline. Now, America’s economic recovery, its energy revolution, its leadership on Ebola, and its re-engagement around the Islamic State (or ISIS)—however partial—has gutted the “American decline” narrative. 

And Xi’s putative allies in the forging of a post-American order—Russia, Brazil, and India—won’t be nearly the help to China they have often been presumed to be. President Vladimir Putin will speak against the backdrop of Russia’s aggressive strategy in Ukraine and now Syria; Brazil’s President Dilma Roussef against the backdrop of a deep recession and a huge corruption scandal; and while President Narendra Modi is still riding relatively high internationally, he’s hardly riding in a pro-China direction. 

China is more consequential than any of these other three, of course. But it faces its own challenge to its narrative as it doubles down on its assertive posture in the South China Sea and as its handling of the stock market collapse shows serious cracks in the narrative of the “Beijing model.” As Chinese growth has slowed, especially in the manufacturing sector, so has its consumption of global commodities—and the knock-on effect has been slower growth in dozens of developing countries that had ridden China’s boom. China isn’t quite the alternative “pole” to the West it has been hyped to be. 

Still, China is now clearly the number two economy in the world; the number two defense spender; the dominant force in politics and economic integration in East Asia; and an increasingly important voice on global issues. So hype and narrative aside, the world will be listening closely to what President Xi has to say at the U.N.—as they will when he takes the reigns of the G-20. 

In what direction is Chinese leadership heading?

At a 700-person-strong gala dinner in Seattle on Tuesday, President Xi rehearsed the arguments. China is committed to a peaceful rise. China has learned the lesson of the Second World War, and recognizes that military hegemony is not an option. China is committed to the multilateral order, and the U.N. Charter. He even teased the international relations scholarly community: “There is no Thucydides trap,” he said, referring to the idea that the growth of Chinese power will cause fear in the United States and lead to war. He stressed his theme about forging a “new kind of great power relations” that eschewed military competition for more creative approaches to cooperation on win/win issues. 

All these would be welcome messages at the U.N., and if he means it, they are profoundly important messages. But if Xi wants these messages to be believed, if he wants to gain credibility at the global level, he’s going to have to do more than just talk a good game. 

First, China is going to have to start acknowledging that leadership is less about abusing the privileges of power and more about absorbing costs. The world may be hungry for leadership, but it’s not hungry for leadership of the abusive kind. It’s hungry for actors capable and willing to set a direction and bear the lion’s share of the costs of action—because that’s the only thing that’s ever overcome the collective action challenges that otherwise bedevil cooperation at the international level. 

China is going to have to start acknowledging that leadership is less about abusing the privileges of power and more about absorbing costs.

Second, he has to put his strategy where his principles are. He could start with the U.N. Charter. It’s an essential document of the international order, but only if the great powers abide by its essential principles (not by every detail.) The most essential of these are the prohibition against the acquisition of territory by force and the assertion of non-interference in sovereign affairs (except with the backing of the Security Council). The United States has violated these principles, notably in Iraq—its violation was of a temporary nature, of course, but had huge consequences. Russia has violated these principles—its violation in Crimea is modest in scale but notionally permanent and a fundamental violation of the foundational principles of the U.N.

China’s actions in the South China Sea have been more subtle than these, but no less invidious or injurious to the notion of a stable international order. If China wants others to believe that it still intends for its rise to be peaceful, it needs urgently to shift strategy in the South China Sea—and it would be in a strong position, then, to call on the other great powers to recommit themselves to the principle of the non-use of force and respect for sovereignty. 

[Xi] has to put his strategy where his principles are. He could start with the U.N. Charter.

I’m reasonably optimistic about the first idea. China was among the most neuralgic of countries when it came to the global response to SARS a decade ago; it’s learned its lesson and was far more forward leaning on Ebola. It chipped in, albeit not to scale, on the eurocrisis. It’s made financial contributions to the counter-ISIS campaign. And it’s made commitments that, if kept, will make a vital difference on the climate. These efforts represent a serious start, and if President Xi expands China’s role in this kind of leadership it could position him well on global issues—especially during his G-20 presidency. 

I’m not so optimistic about the second. China shows every sign of being locked in an assertive-tilting-to-aggressive strategy in the South China Sea, consequences be damned. And with Russia also seemingly locked into a “wrong-foot the West” strategy, the United States and its allies will increasingly be pulled into an escalatory response—creating exactly the kind of Thucydidean trap President Xi ostensibly wants to avoid. (The United States bears responsibility here too, and it can also take steps to lower tensions in Asia.) 

The problem is, the further out we go along the pathway of security tensions in Asia, the more we undermine the prospects for win-win cooperation on global challenges like terrorism and climate. For now, these twin strands of strategy are in roughly equal balance—both rivalry and restraint are leitmotifs of Xi’s worldview, and of America’s. But 2015 is going to be an important testing time for the viability of this dual-strand approach. If Xi wants to start tilting the balance to win/win approaches, his speech at the U.N. is a good place to start. But even that would only be a beginning.