In the early months of the second decade of the 21st century, that grey area of the Euro-Atlantic where Eastern Europe fades into the post-Soviet world seems much the same as it has been since the collapse of the Soviet Empire in 1991. Belarus remains a dictatorship. Tbilisi anticipates war with Russia. The ever unstable Kiev continues to flirt with national bankruptcy. Moscow grumbles on about its diminished status and searches the horizon for signs of nato’s encroachment. And forgotten Moldova remains forgotten.
One could be forgiven for thinking that nothing ever really changes in this part of the world. But one would be wrong. Lost in the latest flurry of reporting on the recent presidential election in Ukraine is the larger story that the European Union has begun at long last to build an eastern policy on behalf of both Europe and the United States. Somehow overlooked in the latest controversies over the construction of a pipeline or the self-interested sale of an aircraft carrier has been the unprecedented realignment of trade and multilateral institutions in relations between Europe and the former Soviet Union. And this has changed everything.
First and foremost, there has been a fundamental change in how the twin forces of nato expansion and eu integration function. The change is to such a degree that it is reasonable to think that a new historical period is beginning in Europe’s east. More to the point, this change is poorly understood in both Washington and Brussels. The recent past of massive European integration and multiple nato expansions in Central Europe is simply no longer a helpful prologue to the challenges we now face in Europe’s east.
The immediate questions are: How did we stumble into a new historical period? And, when did we leave the ebullient, optimistic, and expanding world of post-1989 Europe? Well, anyone who attended the nato summit in Bucharest in April 2008 must have known that the go-go period of nato expansion had become a thing of the past. Since the invitation of Croatia to join nato’s Membership Action Plan (map) in 2002, there had been no further invitation to map until Montenegro was permitted to begin the process in December 2009. Beyond vague associations with Ukraine and Georgia, nato as an institution has stalled at the border of post-Soviet space.
Like nato, the limited optimism and timid political risk-taking of the European Union have been confined to the Balkans, and even forward movement there within the eu’s enlargement policy has been shrouded in public wailing about “enlargement fatigue” and rumblings in European bureaucracies about “privileged partnerships.” Last year, President Nicolas Sarkozy and Chancellor Angela Merkel were correct and cruelly candid in maintaining that nothing should happen in expansion or integration which could place the ratification of the Lisbon Treaty at the slightest political risk. These were all warning signs that a remarkable political period in Europe — stretching over 20 years, from the fall of the Berlin Wall though the integration of roughly 110 million “new Europeans” — was coming to an end.
A new phase
The beginning of a new historical period, most evident in Europe’s east, occurred sometime in 2009 and was caused and accompanied by four major shifts in geopolitics. If we look at each of these individually, we can begin to see the contours of a new politics in Europe’s east.
The most important event in 2009 was undoubtedly economic. There is little doubt that the overthrow of large-scale integration as the grand strategy of the West was precipitated by the global recession. The protectionist, isolationist, and inflationary effects which we anticipated from the history of the 1930s did not occur, but our exuberance for expansion and globalization collapsed faster than Lehman Brothers. Overnight, strategy turned inward rather than internationalist — preservationist rather than activist. Claims that “freedom is universal,” “democracy is historically inevitable,” and “the End of History has come” were simply dropped from the policy debate and, after a few months, seemed as quaint and bizarre as flappers and the Charleston must have seemed during the depths of the Great Depression. Concerns over Greek budget deficits and the real estate market of Spain were soon to become far more urgent than further European expansion.
Broadly speaking, I think that European elites misunderstood this change as the “Obama Effect.” If so, they were fundamentally wrong. As Brussels understands better than any capital in Europe, expansion and integration are huge drains on political and financial capital. By March 2009, in the complete absence of either cash or courage, political objectives had to change.
Secondly, there was a significant ideological reversal brought about by the Russian-Georgian War in August 2008 and during the months following the fighting. (The ongoing argument about which side bears the larger blame for starting the war has no relevance to the effect that the mere fact of the war had on international politics.) The Russian-Georgian conflict was a catastrophic shock to the ideological foundations of U.S. foreign policy in post-Soviet space and to a lesser, but still significant degree, to democracy promotion efforts around the world.
In general terms, U.S. and European policy towards post-Soviet countries had been cobbled together around a handful of sound-good, feel-good objectives which, over time, were supposed to transform the post-Soviet world into a rough-hewn, Slavic version of Central Europe. The relationship with Russia would be demilitarized. Frozen conflicts would melt away in multilateral diplomacy. Eastern democracies (which, incidentally, never go to war with each other) would focus on the vibrancy of their parliaments, civic societies, and economies. And above all else, war — that horrible relic of 20th-century Europe — was simply out of the question.
Instead, on the night of August 7, 2008, Georgia, the most promising of the Color Revolution countries, and Russia, the object of Western diplomacy since 1989, began blazing away at each other, blissfully unaware of the damage they were doing to the ideological tenets of democracy promotion and international activism in the rest of the Euro-Atlantic. Unfortunately, the Russian-Georgian war could not be dismissed as a border incident; the entire 58th Army of the Russian Federation was engaged in combat operations. The catastrophe for the ideology of democracy was the unavoidable recognition that the Russian-Georgian war was preventable yet was not prevented. The central claim for expanding the system of democratic states is that this association not only lends itself to greater prosperity but also that it is extremely effective in resolving potential conflicts and in preventing war.
Admittedly there had been some tremors in the force since 2003, as America’s well-intentioned plan to remove Saddam Hussein, protect the people of Iraq, and rebuild a functioning democracy began to go off the tracks. But things like that happen in such unusual places and can often be attributed to a failure of tactics and planning. But when armies go to war on the borders of Europe, as they did in the Russian-Georgian war, it causes a crisis at the level of theory from which existing policy cannot immediately recover. Virtually overnight, economics replaced ideology in the American political lexicon and multilateralism shouldered aside the last vestiges of hegemonic thinking in U.S. policy. In the event, by the beginning of the Obama presidency, there was full-scale global recession accompanied by a profound crisis in the theory of how democracy could be exported.
Thirdly (bearing in mind we are looking at these world political events narrowly, through the lens of how they affect Europe’s east), the economic crisis and the failure of U.S. diplomacy to prevent the Russian-Georgian war caused the incoming Obama administration to reconsider the national interests of the United States in the eastern Euro-Atlantic — meaning in the Eastern Partnership countries, Russia, the Caucasus, and Central Asia. Influenced by the scarcity of capital, enervated by multiple wars, and perhaps only eager to be “not Bush,” the new administration recognized, (correctly, I think) that if one strips away the desiderata — that native body of hopes, evangelicalism, and exceptionalism that has caused Americans to run off regularly to save the world since their country’s earliest history — then the United States has very limited “hard” national security interests in the eastern Euro-Atlantic area. When a major power recalibrates the definition of its interests in as vast an area of the Euro-Atlantic, that has a significance which cries out for clarification.
As the markets and our ideological confidence were falling, an expansive (and to some dangerously universalist) definition of U.S. interests was falling with them. Significantly, the first clarification of the Obama administration’s redefinition of interests came in the reformulation of Russian policy, which was rolled out awkwardly with the catch-all “reset” policy at the annual Munich Conference on Security Policy in February 2009. What were these rather muddled officials trying to say in the first days of the Obama administration?
Although figuring out how many bilateral working groups could dance on the head of a Russian pin would take the White House many more months, Defense Secretary Robert Gates had already laid out the strategic premise in his declaration that Russia was simply not a threat. What he meant was something slightly more subtle. The downturn in the global economy and the growing instability in the North Caucasus and, more recently, the South Caucasus had caused the United States to conclude that Russian political instability, economic fragility, and international isolation were far greater threats to U.S. interests than the distant prospect of Russian power and economic prosperity — which, compared to the aforementioned darker alternatives, America would welcome.
Before the end of February 2009, economic interdependence between Russia and the West — heretofore a suspiciously collaborationist, Schröderist Ostpolitik — supplanted neocontainment as the agreed-upon doctrine of the United States and Europe. Not since George Kennan wrote his Long Telegram has Washington fallen so quickly and completely in love with a doctrine governing Russian policy. Virtually overnight, Washington rediscovered the salutary effects of liberal trade theory and the charms of classical European diplomacy.
Ever since David Ricardo refuted mercantilism by claiming that trade allowed both parties to benefit, political interpreters of economics have made the additional claim that trade itself could act like an invisible hand in bringing nations to political agreement. The former foreign minister of Germany, Frank-Walter Steinmeier, refined this argument with respect to Russia, arguing that the exchange of Russian natural gas for European cash would create an interdependent economic relationship that would provide the foundation for stable and mutually beneficial political engagements.1 Like countless other Europeans before him, Steinmeier also argued that it is probably wise not to poke the Russian bear with a stick while you try to do business with it. Exactly why White House speechwriting felt the need to rename these exclusively European ideas about Russia as “President Obama’s reset policy” remains a mystery.
Characteristics of the new eastern policy
The confluence of global recession and ideological disillusionment which stimulated a delimitation of U.S. interests internationally and a reconsideration of Russian policy in the United States, Germany, and France was more than enough to mark an end to the rapid reorganization of a wider Europe, which had been proceeding apace for the previous 20 years. By the early months of the Obama presidency, the contours of a new historical period were becoming clear.
Europe’s “open door” policy, which had been constructed in the expectation that a third wave of expansion would soon follow the Visegrad round of 1999 and the Vilnius round of 2004, split into two different doors reflecting a new understanding that there were now aspirant countries that bore little or no resemblance to Poland, the Czech Republic, or Hungary. The classical expansion path, associated with Poland — nato first and then, inexorably, membership in the European Union — was now an open door only for the Balkan countries, which were covered by the categorical promise of full integration made in the Thessaloniki Communiqué. Setting aside some technical objections and regional squabbling, Croatia, Albania, Montenegro, even Macedonia and Serbia — and at least in theory Bosnia and Kosovo — were all going to be fully integrated into both nato and the European Union in the fullness of time.
But the second door, a new post-Soviet track, would be reserved for Europe’s eastern neighbors. These countries would not be candidates per se, but rather partners. Both Ukraine and Georgia would interact with nato and the European Union through ambiguous associations far different from the terms of historical inevitability encompassed in the Thessaloniki Communiqué. The second open door did not guarantee membership, but it did not preclude it either. The post-Soviet track is not atheistic on further expansion; it is agnostic. Although policy towards the eastern partners does not reflect a belief that there are European democracies east of Bratislava, it is an open door because its authors are open to the possibility of such a belief in the future. An enlightened agnosticism is now the defining characteristic of the eastern policy of the West. It is quite similar to what might be called “Turkish track” in terms of relations with the European Union — which I will discuss further below.
The second major characteristic of the new phase of history concerns nato. In Europe’s east, nato is dead. As I suggested earlier, it died at the Bucharest nato summit in April 2008. But it would be a mistake to conclude, as some do, that nato was killed by the aggressive diplomacy of Russia. It died a natural death of irrelevancy. The fundamental problem of the near, post-Soviet neighbors, such as Ukraine, is political instability, which in turn contributes to economic dysfunction and potential national bankruptcy. About this, nato knows nothing.
In relative terms, Ukraine faces no external security threats and correctly views nato accession as an unnecessary expense both financially and politically. The secular decline of nato’s relevance in Ukraine can be seen in the public support for nato, which has dropped steadily in every government since its height in the middle years of President Leonid Kuchma. Strictly speaking, it is just too early for nato in Ukraine and Moldova. nato cannot guarantee Ukraine against the threat that Ukraine’s political instability poses to itself. And it cannot improve the economic circumstances that pose an existential threat to households and livelihoods of Ukrainians. Politics in Europe’s east is at the level of “pocketbook politics,” and until the electorates reach a minimum level of economic security the attraction of a shared security organization is extremely limited.
Or, perhaps, it would be more precise to say that the attraction of nato should be extremely limited for those countries emerging more from the collapse of the economic and social system of the Soviet Union than from Soviet occupation. The exceptions to this rule are countries where “frozen conflicts” from the breakup of the empire remain within their borders. The most obvious exception is Georgia, which seeks the help of nato and the United States in the recovery of South Ossetia and Abkhazia, lost to Georgia in the ethnic cleansing of the 1991 and 2008 wars. Like Georgia, Azerbaijan seeks allies in the recovery of Nagorno-Karabakh, while Armenia sees nato’s Membership Action Plan as diplomatic protection for Nakorno-Karabakh. Only Moldova seems to recognize that military alliance does not lend itself to the resolution of frozen conflicts.
The Georgian exception poses a problem for Europe’s eastern policy, just as defiant nationalism has always posed a problem to pan-European ideas. Georgia’s national myth of the recovery of lost territory is simply more important to most Georgians than the idea of joining a European community, much in the way the imperative of Serbian history often gets in the way of Serbia’s integration into the European Union. Analytically, whatever policy Europe comes up with will have to divide post-Soviet countries — which remain in a war zone, with all the political passions thereof — from countries where the memory of ethnic cleansing is sufficiently distant that their economic isolation seems the bigger problem.
The obvious corollary to the withdrawal of nato from Europe’s east is the dramatic rise of the European Union as the defining normative power in relations with the eastern partners. Europe’s east is completely the province of the eu in a way that the East German plain was completely the province of nato a quarter century ago. The dispositions of officials at the European Commission, such as Commissioner Stefan Fule and his deputy Hugues Mingarelli, have far more impact on the lives, jobs, and futures of average Ukrainians than the policies and Membership Action Plans of nato Secretary General Rasmussen. And this is not at all a bad thing.
Post-Soviet space is and must be geoeconomic before it can again become geopolitical. It is not far off to think of Europe’s east as pre-geopolitical Europe. If one examines the semantics of Europe’s dialogue with its east, it is dominated by terms such as free trade agreement, visa liberalization, gas transit system, and conditionality of imf aid. This is the vocabulary of economic recovery and development. It is strikingly different from the democracy rhetoric of President George W. Bush in his Freedom Square speech in Tbilisi and bears nothing in common with the popular and populist slogans of the Color Revolutions. And, perhaps, this shift is the normal maturation of the eastern democracies. In our own tradition, the liberal economic theories of Adam Smith and David Ricardo preceded the Emancipation Proclamation by the better part of a century.
But whether or not economic development must precede and accompany the full flower of a European democracy, the disillusionment with the promise of the Color Revolutions in Georgia and Ukraine has become a significant characteristic of the political character of Eastern Europe. (Here I am referring not to the disillusion of former enthusiasts of the Rose and Orange Revolutions, among whom I include myself. I refer to the disillusionment of Georgians and Ukrainians.) The important point for policy lies in the disappointment of the peoples who expected that radical political change would immediately improve the quality of their lives and their government.
Neither Color Revolution led to the democracy we imagined. Notwithstanding the promising initial reforms of President Mikheil Saakashvili, in general terms, the revolutionary eastern democracies have been characterized by eccentric forms of czarism, instability, war, and profligate spending on subsidies and pensions (in Ukraine) and on weapons and thuggish security services (in Georgia). At some point in 2009, the Orange Revolution lost its historical connection with the Velvet Revolution, and Western capitals stopped thinking of Ukraine as the backward country cousin of Poland. It is now evident that all the leaders of the “goulash democracies” of the east are some form of relatively good or thoroughly bad czar, whether we speak of Victor Yushchenko, Ilham Aliyev, Mikheil Saakashvili, Vladimir Putin, or Alexander Lukashenko. Strictly speaking, we now recognize that these are czarist presidents (or prime ministers this year in Russia) with underperforming parliaments and underdeveloped civic societies that are fundamentally different from the robust parliamentary democracies of the rest of Europe.
What emerged from this reassessment of the economic realities and democratic conditions in Europe’s east was an understanding that the trajectory of post-Soviet states in their relations with Europe could best be described as “Turkish track.” By this I mean that much like the relationship which has existed between the European Union (and its precursor organizations) and Turkey since 1963, when Turkey joined the European Economic Community, the European Union’s relationship with Ukraine and other post-Soviet states will be more like a multi-year discovery of national identity than a formal process of integration. Although Turkey’s closer relations with the European Union began in 1963 with the opening of markets, it was not until the elections in 2003, when Prime Minister Recep Tayyip Erdogan and the ahk Party came to power, that it became clear that Turkey was far closer to a moderate Islamic democracy than Kemal Ataturk’s vision of a militantly secular state with a Prussian general staff. The question of identity has been at the core of the Turkish-European relationship at least for the last 47 years and is only now coming into sharper relief.
A similar search for identity has been taking place in Ukraine for the last five years in the form of a running political battle to decide whether Ukraine is Blue or Orange, pro-Russian or pro-European, Eastern or Western. The election of Victor Yanukovych as president on February 7, and the formation of a regions-led coalition in the Rada, will begin to clarify that the center of Ukrainian politics lies in the Russian-speaking, Slavic, casually Orthodox, industrial, and oligarchic Donbass — not in the Europeanized elite of Kiev. It would seem to me that the jumble of regional factions, powerful industrialists, and up-and-coming technocrats which is now the governing majority in Ukrainian politics is in some ways more authentic and representative of Ukraine than the Potemkin heroics and tiresome histrionics of the defeated Orange leaders. Although expectations for the incoming government are vastly lower than the hopes in 2005, after the Orange Revolution, more realistic expectations may help Europe break the pattern of continuing disappointment in its efforts to help Ukraine.
But regardless of the flavor of the first post-Orange government in Ukraine (this year, or in following years) this will only be a step in the mutual discovery of identity which will go on between Ukraine and the European Union for the better part of this decade. Much like the early stages of Turkey’s relations, the first milestone along Ukraine’s “Turkish track” will be the negotiation of a free trade agreement with the European Union. One hopes this will be rapidly followed by the liberalization of travel and then move through a progression of closer nonmembership associations.
Unlike during earlier periods of expansion, when the central question was not whether but when, Europe now needs to know who Ukraine is. We are in a conditional phase of history when we are wonderingif Ukraine might become a member. Nevertheless, there is a misapprehension about where the weight of decision-making lies on the question of whether or not Ukraine moves onto a membership track — or if Turkey stays on it, for that matter. The popular view is that Europe holds all the cards and that Kiev and Ankara are at the receiving end of the judgment of Brussels. But this is much like the young men in a locker room trying to settle among themselves which girl each will take home that evening. The men think they alone will make the choice, but this is not so. Sovereign states, like women, have a mind of their own, and men — even high officials in the eu — may find themselves waiting at considerable length for their decision.
I suspect it will be years before Ukrainians will make a conclusive decision that their future lies within European institutions. They have already suggested that they will not consider nato membership until a national referendum which is at minimum somewhere between five and seven years in the future. What is at stake in the “associative phase” of the Eastern Partnership is whether Ukraine remains an isolated and underdeveloped northern Moldova or evolves into an eastern Norway, a key partner of the eu on values and energy, but not a full member.
Towards the end of these associations, the modern identities of Ukraine and Turkey will become apparent to their citizens and to the European Union. It is conceivable that the European Union will then have to decide whether it wants an Islamic Turkey or a post-Soviet Ukraine within the institutions of Europe. But it is also possible that one or both countries may have made other choices before the European Union ever has a real decision to make.
Changes in political economy
One often makes more progress in understanding the changes in the political economy of the Euro-Atlantic by casual examination of the superficial than by trying to define the structural forces which are driving historical change. So let’s forget about the tectonic economic plates and geopolitical stresses and just look around to see which buildings are shaking. The following are the quick corollaries to the arguments I have offered:
- nato does Afghanistan, not Europe’s east. At the end of the day, nato will be the guarantor of security in a wider Europe, but that day is far off and we do not yet know if Europe will be wider than it currently is.
- With the exception of some of the Balkan states, this will be a decade without nato or European Union enlargement.
- The defining policy of the West towards Russia will be a fusion of German economic interdependence and America’s renewed interest in multilateral diplomacy. The engagement of Russia on nonproliferation, Iran sanctions, and other un Security Council initiatives is likely to persist — at some expense to a vocal activism on human rights and democracy promotion. (Some will argue that this policy neglects the responsibility of Western governments to open up space abroad for civil society, but if the claims for economic interdependence are to be believed, a growing middle class will do that far better than high-minded Western diplomacy.)
- We are seeing the rapid rise of economists and trade theorists in the corridors of power in Washington, Berlin, and Paris. This has been accompanied by an equally rapid decline in the influence of Central and Eastern European leaders whose historical and ideological interpretation of Russia dominated the period from President Reagan to President Bush. A halfway decent imf economist now seems more likely to produce positive change in Europe’s east than a former dissident from Prague or the best neoconservative political theorist.
- As a consequence, the modern role of Nordics, Balts, Central Europeans, and Georgians in explaining Russia to the rest of us has been vastly diminished. In a sense, the well-meaning advice of what was briefly called “New Europe” to America about the danger of Russia is another casualty of the shift from ideological belief to economic calculation.
- As much as prudent nato planning for the defense of its members is a good thing, simply planning to defend a country does not create a democracy. At the end of the day, nato is a very effective but expensive insurance policy which is not worth purchasing until there is something of political and economic value to secure. The idea that nato can only be a guarantor of European democracy ex post facto, and not the sufficient condition for its creation, will come as a disappointment to many of America’s friends and admirers in Europe. No amount of reassurance and hand-holding by the Obama administration will change this reality for Central and Eastern Europeans.
- Europe’s east will sink or swim on the coherence of the European Union and its success in developing mechanisms, like the Eastern Partnership, which can manage the tricky economic and political currents of this intermediate period.
- While the hard integration of militaries and formal institutions has already disappeared, a soft, virtually unseen integration between peoples, cultures, and markets will continue and, under certain circumstances, may even accelerate.
Twenty-four months ago even one of the foregoing changes on the political landscape would have been unthinkable. Taken together, these changes constitute a recomposition of the political economy of relations between the post-Soviet space and the rest of the Euro-Atlantic, what Kennan called “Russia and the West.” Today, it is more precisely the relationship between “Europe’s east and the rest of the West.”
As a conservative, I am predisposed to look at political change, particularly dramatic political change on the borders of Europe, as not necessarily a good thing. Emotionally, it is difficult to look at the passing of an historical period which brought us the fall of the Berlin Wall, political figures like Pope John Paul II and President Vaclav Havel, and the inclusion of 110 million people in European institutions with anything other than a sense of loss and regret. But if we look at the interests and aspirations of the people of Ukraine and of the other Partnership states, the changing of the rules and relationships is not necessarily a bad thing. The redirection of Russia into energy trade with Europe, the rise of the post-Lisbon European Union, and the appearance of the imf as a major player in economic recovery may open up possibilities that were either squandered by or denied to Europe’s east between 1989 and 2009.
Any conclusions about how Ukraine and Europe’s policies towards the east will develop in these changed circumstances must of necessity be extremely tentative. Suffice to say, a breathtaking series of mistakes, misjudgments, and diplomatic pratfalls have constituted American and European policy towards Ukraine for the past 20 years. About Central and Eastern Europe, historians will say that we were remarkably lucky to get the basic architecture right. About Ukraine, they will say that it is remarkable how consistently we were wrong. It is fair to say that we will have to look at Ukraine and other post-Soviet states with considerable modesty and as if we are now seeing them for the first time — which in a sense this new historical period forces us to do.
Beyond the self-effacement of Western policy, I am confident in only two conclusions. The all-important and defining phase of the “soft integration” of Europe’s east will begin, if it does at all, with the election of Victor Yanukovich in Ukraine, which may bring a modicum of political stability to Ukraine. It will end with the reelection of Vladimir Putin as president of Russia in 2012, with a mandate to impose draconian structural reforms to end the burgeoning economic crisis in the Russian economy. These 30 months are what the historian Barbara Tuchman called in another context “the plastic moment” in history where things can be shaped and policies formed. These months are the limited time where Europe’s door remains open and an effective Eastern Partnership and accompanying policies can be put into place. If Europe is to have an eastern policy worthy of the name it will have to be constructed in this period and built first in Ukraine.
The eu must rapidly conclude a free trade agreement that is as important for the eu as it is for Ukraine. Then, both the United States and the eu must directly engage Ukraine’s oligarchic elite, which is the first real constituency to appear in its politics, however distasteful some may find the post-Soviet nouveau riche. And, the eu needs to target Ukrainian students and youth with giveaway visas and readily accessible educational opportunities and exchanges on the scale of the Marshall Plan.
Whatever the outcome of these soft power engagements, we already know that the result will be completely different from the development of Western Europe after 1945 and Central and Eastern Europe after 1989. It will have nothing to do with previous rounds of nato expansion.
Fortunately, history has a keen sense of irony. We may find that Ukraine’s east may move post-Soviet space to the West far more rapidly than Western political romanticism could drag the once beloved Color Revolutions into Europe. We may rediscover that the soft powers of liberal trade and travel bring about the close association of democracies just as firmly and conclusively as a military alliance. Or we may not.
1 Steinmeier’s argument is indistinguishable from the logic of America’s policy towards China. What began as “Coca-Cola diplomacy” has grown into a massive exchange of Chinese exports for U.S. Treasury debt. U.S. policy towards China rests on a foundation of economic interdependence. Whether it produces exogenous political benefits remains in dispute.