CHINAwatch

Japan, China - could tension between them lead to war?

Live panel discussion here on 28 September 2012 with Voice of Russia, London with Professor James Woudhuysen of De Montfort University in the UK; Dr Ramon Pacheco Pardo, of Kings College London; and Professor Yuriy Tavrovskiy, Moscow’s Russian Peoples' Friendship University.

"War By Other Means: China’s Political Uses of Seapower"

In an article dated 26 September 2012 in The Diplomat, an online international affairs magazine for the Asian Pacific Region, Toshi Yoshihara, John A. van Beuren Chair of Asia-Pacific Studies at the U.S. Naval War College, presents his views of China's sophisticated maritime strategies, a flexible and calibrated combination of non-military and military power, "that will be more effective and equally difficult to counter". 

"While such strategies do not, yet, portend the fundamental reordering of maritime Southeast Asia, they will likely yield incremental dividends that advance China's larger aims at sea".

His article was adapted from his testimony before the House Committee on Foreign Affairs delivered on September 12, 2012. Click here

Dr Yoshihara advances the argument that China's non-naval power projection in the East and South China Seas is predicated upon the following components -

(a) mobile onshore anti-ship missile assets along China's coastline which can be deployed in support of naval manoevres in the region's theatres;

(b) non-combat civilian vessels of the China Maritime Surveillance (CMS) agency, which serves to keep up China's territorial claims "at a low simmer". This weakens the rationale of any foreign military initiative, is flexible enough to be turned up or down to test an opponent's resolve, and may over time cause a strategic fatigue in the opponent's resistance;

(c) buying time for the on-going rapid progess in building up a credible, modern and comprehensive blue-water navy.

Against this perceived Chinese naval power projection strategy, Dr Yoshihara proposes that the United States should -

(a) continue to beef up the military capabilities of China's negibours;

(b) build up a shared regional military surveillance system; and

(c) instal a rapid-response U.S. naval force with anti-ship missile capabiliites that can be deployed quickly in response to any military situation in these waters.

Regardless of the effectiveness of Dr Yoshihara's suggested counter-measures, what has been left unsaid in his assessment is the fact that vitually all of China's neigbours in these waters, including Japan, have China as the centre of a regional production and supply chain, their largest trading partner, a vital export market, an engine of their economic growth and job creation and increasingly for some, a source of foreign investment. So none can afford making China an implacable enemy. Nevertheless, they all welcome the American Pivot as a military insurance, if not a free ride, in hedging against a powerful China.

Dr Yoshihara's insightful analysis in fact illustrates how China is successfully applying the basic tenet of Sun Tzu's ancient Art of War - that winning a war does not always have to involve fighting. Perhaps that's why the article in The Diplomat has the heading "War By Other Means - China’s Political Uses of Seapower"

China's rising tsunami of anti-Japan protests

In the wake of the politically-charged Diaoyu/Senkaku island territorial dispute, anti-Japan nationalism is going viral in China, sweeping across over 100 cities in China as well as Chinese communities overseas. This coincides with the anniversary of the 9.18 (September 18) incident in 1931 when Japane began the invasion of China. Click here

China has become Japan's largest trading partner and is reliant on China as its largest market of Japanese goods manufactured in China. This benefits from a high-yen policy which costs less in yen for its Chinese investment and puts more spending power in the hands of Japan's aging population. So economicallyJapan stands to lose a great deal in the event of an all-out confrontation with China.

All the parties concerned - Japan, China and the United States - know full well that an all-out war should be ruled out as none wants one or can afford it.

However, a weakened Japanese Noda adminstration, fighting for political survival against right-wing activism, is unlikely to back down. Moreover, while the U.S. has repeatedly declared its neutrality on  sovereignty over the disputed island, it has affirmed the application of the U.S -Japan Security Treaty to the disputed island which Japan claims is under its administration.

While anti-Japanese nationalism may come in handy to boost China's territorial claim, it would not be in China's interest to allow it to run riot. This is because social stability is paramount during China's imminent leadership transition at a time of weakening Chinese and global economies.

But geopolitically, Japana's right-wing politics seems to be handing over to China the best opportunity in decades of settling this territorial dispute once for all.

The current row with Japan and other rival territorial claimants provides perfect legitimacy for China to tighten military and adminstrative coverage of claimed territories in the South China Sea, which comprise China's vital sea lanes.

This also opens up the opportunity to set the records straight on the sovereignty issue. That's why China has now submitted historical documents supporting claimed lines of territorial demarcation to the United Nations.

The historical background is explained in a recent article in Foreign Policy - "Why the Japan-China island dispute is an American problem" Click here

If Japan keeps up the right-wing rhetoric, popular anger in China, already at boling point by recalling Japan's imperial past, could well push China to consider more draconian retaliatory measures e.g. unilateral specifc trade sanctions such as export of rare earths, in addition to curbing business opportunities of benefit to the Japanese economy.

All of this seems rather pointless over some small and unattractive island outcrop in the South China Sea.

But besides hidden gas and oil reserves, what is really at stake is the battle over geopolitical influence over these sea lanes between the world's extant superpower and its perceived challenger. Added to this is the no-small-matter of China's national pride in territorial integrity traumatized by centuries of foreign aggression.

In any case, this unstable standoff between Japan and China is unsustainable, especially for an economically-weakened Japan. Chances are that some sort of an accommodation will be worked out balancing the interests on all sides, including no less America's interests in the Asia-Pacific. See my Op-ed article Discord in Asia in the South China Morning Post here.

Stopping the row from escalating seems to suit all parties and necessity is often the mother of invention. Perhaps the current visit of American Defence Secretary Panetta to Beijing would at least set the tone for a more meaningful tripartite dialogue.

"Brighter days ahead for China's economy"

In an article for China's Economy and Policy, the flagship publication of Gateway International, a global China consultancy firm, G. Bin Zhao, executive editor, outlines a brighter picture of China's economy in the coming decade. He advances the following arguments -

(a) By all accounts, China's economy, though not necessarily comprehensive national power, is set to overtake the United States by 2018 to 2021, even if China's growth rate drops to 5% p.a.;

(b) Already rapidly internationalized, the RMB is set to become at least one of the world's leading reserve currencies, if not the leading one, after the Chinese yuan becomes fully convertible on the capital account probably by 2020, when China's economy is to become the world's largest;

(c) Subject to deepening economic integration with the Mainland, Hong Kong is likely to overtake New York as the leading global financial centre within 20 years;

(d) Albeit noted for scale rather than global brand leadership, China's enterprises have increased their listing in the Global Fortune 500 from only 11 a decade ago to 73 companies (79 if Taiwanese companies are included). More are likely to transform into truly global leaders to take possibly up to half of the league table within two decades.

(e)  According to China's State Intellectual Property Office, total patent applications were more than those of Japan and the US in 2011. Meanwhile, science and technology think tank Battelle estimates that China is likely to increase her share of 15% of global research and development spending to surpass the US within a decade. The international stature of Chinese universities is expected to rise: the University of Hong Kong expected to rank among the top 10 in the world, while Peking and Tsinghua universities to rise among the top 20.

(f) China is expected to narrow the gap with the US in the aerospace industry within two decades.

Download SCMP - 17.09.12 - Brighter days ahead for China's economy

G. Bin Zhao's optimistic prognosis seems to chime with the forecast of China's looming economic dominance "possibly only years away" by Arvind Subramanian, Senior Fellow at the Peterson Institute for International Economics, Washington DC, in his new book, "Eclipse: Living in the Shadow of China’s Economic Dominance."  Click here

All these rosy predictions, of course, tend to downplay the well-known litany of critical domestic and external challenges China faces in the coming decades, including leadership transitions, worsening corruption, inequalities, social discontent, ecological degradation, water, energy and other resource constraints, unbalanced reliance on infrastructural investments and low-margin exports, weakened external markets, problematic foreign relations, a rapidly--aging demographic profile and rising aspirations of an educated, liberal and internet-savvy middle-class.

However, past prejudgments of China’s eventual collapse have repeatedly belied themselves by predicating upon the past, especially China's politically convulsive past. The clear present-day reality is that the Party is fast turning itself into a ruling party that can only sustain its legitimacy by delivering what most people want, by continously re-inventing itself, and by building China's long-term competitiveness in keeping with the changing times.

For example, a recent YaleGlobal article ""Beyond Factory Floor: China’s Plan to Nurture Talent" dated 10 September 2012 Click here shows how determined China is in honing home-grown innovation and talent in the coming decades.

Alongside the coming leadership transition, a raft of major reform measures is already on the cards, judging from a recent 468-page World Bank report jointly undertaken with the Development Research Centre of the State Council, which counts Li Keqiang, China’s likely Premier-in-Waiting, amongst its staunch supporters.These measures include the reform of state-owned enterprises, growing a green economy, tackling the "hukou"" system which marginalized migrant workers, and the promotion of civil society.

Success is by no means guaranteed and many black swans can be expected along the way. But there is little doubt China is leaving no stone unturned in “Building a Modern, Harmonious, and Creative High-Income Society" by 2030. Click here 

"China's absent princeling is a mystery not a crisis"

"China's absent princeling is a mystery not a crisis"", opines John Foley, a Reuters Breakingviews columnist, in his article of 12 September 2012 on Breakingviews, an online Thomson Reuters platform.

Foley concludes, "True, a missing crown prince shouldn’t be taken too lightly. An unexpected disruption to the leadership process that resulted in internecine struggles would be damaging both for economic and political stability. And the secrecy doesn’t bode well for future openness. But assuming order can be maintained, what counts most for China is “how”, not “who”. Click here

The significance of Xi's continuing disappearance from view can hardly be over-estimated if the cause is much more than a mild personal ailment. True, in the long run, the Party may well be able to find its own feet. But after going this far in building up a consensus on a leadership successor, any suggestion of a political struggle at this late stage is bound to unravel the earlier consensus and unleash potentially convulsive rivalries at a difficult time of China's domestic economy and external relations. The resultant upheaval may well be cataclysmic.

Leadership succession at the highest level of the Party doesn't happen by chance or only during the final run-up to the end of term. The fact that Xi became the only Vice President in the first place suggests that the Party consensus happened much earlier that he was meant to be the crown-prince.

For more background, please visit my analysis at "How are China's top leaders selected and how stable is China's Communist Party?" at Click here

So at this late stage, to open up the whole issue of leadership succession as a result of political discord or more serious illness is to open a Pandora's Box.

But I agree that Xi’s sudden disappearance is a mystery, not a crisis, though not by downplaying its significance if tainted by politics.

What may suggest that the disappearance was not some kind of a sudden coup is that some time after the cancellation of Xi's meeting with Hilary Clinton, there was an official press release about a photo opportunity of his subsequent meeting with the Danish Prime Minister. Now this could well have been a breakdown in internal communication. On the other hand, the tight control over press releases about top leaders means that for a little while, the State Council office might have thought that the photo-op could still materialize.

If this interpretation is correct, there is more credence to the conclusion that Xi's disappearance is no more than recuperation from a mild heart attack or some other mild ailment rather than the manifestation of a coup.The business-as-usual activities of all other top leaders seem to lend support to this.

In any event, the personal health of China's top leaders is looked after by the most advanced medical facilities of the country. But if it turns out that the ailment is anything but minor, then a bumpy ride in the leadership transition may of course be expected.

However, there are also unconfirmed reports that during his absence, Xi has been feverishly engaged with is top aides in helping to finalizing the opening of the forthcoming Party Congress. If so, his health and position as China's new President-in-waiting seem assured and with the shape of the new leadership line-up nearly complete, the date of the coming Party Congress may well be announced sooner rather than later. 

Time to re-think a new Asian Order? (Abridged)

For decades, the South China Sea has enjoyed relative calm, despite occasional territorial disputes. This has so far depended on a predominant U.S. military umbrella under which regional states thrive in a China-centric global production- and-supply chain.  This stability has now been disturbed on several fronts.

First, China views the South China Sea as assuming ever-increasing strategic weight. Apart from Taiwan, China has long-standing historical territorial claims over certain islets and atolls and a consequential large swathe of the South China Sea, demarcated by the controversial “U-shaped nine dashed lines”(1) Click here.  Situated in these waters are sea lanes vital for economic survival, as well as huge potential energy reserves. China’s rival territorial claimants have now become more assertive with their claims, egged on by rising nationalism and emboldened by America’s Pivot to Asia.  This has resulted in recent series of high-sea standoffs.

Over the years, as part of a peaceful “rise” or “development” strategy, China has been building harmonious relations around and beyond her periphery. China became the first non-ASEAN nation to sign the Treaty of Amity and Cooperation in Southeast Asia in 2003. With the ASEAN-China Free Trade Area, the “ASEAN way” based on consensus and equality between states has been gaining traction. This mutually-beneficial harmony is now showing signs of strain. After a fallout on how territorial claims should be handled, the 45^th ASEAN meeting in July, 2012 failed to issue a joint communiqué for the first time.

Second, there is growing U.S.-China military rivalry.  China is starting to build a blue-water navy with the commissioning of a first aircraft carrier.  Although this is a re-fitted old Russian model and China’s naval force remains decades behind, U.S. strategists are becoming alarmed by China's advances in "A2/AD (anti-access/area-denial)" capabilities, including mobile "aircraft-carrier killer" missiles, and in “C5ISR” (2) , cyber-warfare and space technologies. These are being deployed and continually developed to deter and delay potential adversary military deployment in case, for example, of a war over the Taiwan Strait.

To counter China, the U.S. military is reported to be planning a major expansion of radar missile defences in Asia. Concurrently, the Communist Party-run Global Times reported that China was developing a long-range, nuclear-capable, multiple-warhead ballistic missile that could potentially overcome US anti-missile defences.

Third, there is a looming split in the U.S.-China symbiotic economic relationship, dubbed  “chimerica” by historian Niall Ferguson in 2006. America is now feeling the pain of outsourcing jobs to China. It is alarmed by excessive debt-driven consumption financed by China’s largesse in American treasuries. On her part, China is wary of over-reliance on exports and the folly of tying up too much savings in a “U.S Dollar Trap” (3) Click here. Moreover, a prevailing  “China threat” has resulted in unease, suspicion, and mistrust, if not paranoia. A “Great Sino-American Divorce” is now looming on the horizon (4). Click here

These regional fault-lines therefore call for a re-think for a more sustainable Asian Order.

It must first be appreciated that with daunting domestic challenges, China needs a stable and peaceful international environment to progress. Following Deng Xiaoping’s advice, China would be loathe to seek leadership before becoming fully developed. Moreover, as China’s economic welfare and national security continue to depend on integration with the world order, it would be in China’s interest to behave as a “responsive great power” (5). China’s rise has thus been characterized by “normative” and “remunerative” rather than “coercive” power (6). This “peaceful rise” trajectory conforms to the “new security concept” articulated by former Foreign Minister Qian Quichen, a concept of strategic reassurance based on cooperative security, dialogue, and mutual economic benefit.

China has therefore been operating within, and stands to benefit from, a stable regional order largely underwritten by the United States. While a rising China can no longer unreservedly accept America’s dominance, it would not be in China’s best interest to dislodge the United States from the Asian region, even if China is able to do so, which remains unlikely for a long time.  Seen in this light, China’s rise in Asia need not be at America’s expense (7).

Additionally, in an inter-connected and inter-dependent world, the United States’ capacity to lead has become more constrained, according to the U.S. National Intelligence Council (8). To tackle global challenges and to maintain world order, America needs to work closely with a host of state and non-state actors as well as allies and non-allies, including a rising China.  Instead of checking China’s “peaceful rise”, therefore, America should strategically capitalize on it to achieve sustainable regional stability.

Moreover, while free-riding on America’s military protection, none of China’s neighbours, including Japan, wants to join an overt anti-China military bloc, as all depend for their economic growth on China as their largest market and trading partner.

Against the above background, ideas for a more stable Asian Order are now being offered by a number of prominent strategists.

Drawing on his thought-provoking book “The China Choice”, Professor Hugh White floats the idea of a “Concert of Asia” to avoid a possible “deadly strategic rivalry”. America is to partner and share regional power with China as an equal, accommodating or balancing China’s core regional interests, along with those of India and Japan (9). Click here Although White’s approach may work, the challenge is how this can be achieved without compromising the interests of America’s key regional allies.  

Zbigniew Brzezinski, a doyen in American foreign policy, has advanced a global American grand strategy, comprising a “Larger West” by drawing Russia and Turkey into an enlarged European Union , and a ““Complex East”, where the U.S. would act as “regional balancer”, similar to the role played by the United Kingdom in intra-European politics before the early 20^th century (10). Click here

A lynchpin of Brzezinski’s eastern component is a “U.S.-Japan-China Cooperative Triangle” to be nurtured through reconciliation between China and Japan, similar to that between Germany and France as well as Poland after World War II. The guiding principle should be to uphold obligations to Japan and South Korea without being drawn into a war between Asian powers.

To accommodate China’s core regional interests, Brzezinski suggests early resolution of the main sticking points in US-China relations, particularly the Taiwan issue. As Washington no longer recognizes Taiwan as a sovereign state, protecting a separate Taiwan indefinitely by arms sales is likely to intensify Chinese hostility. Given China's growing power and greatly expanded cross-Strait links, he doubts that Taiwan can indefinitely avoid the evolution of a more formal connection with the mainland, perhaps under a "one country, several systems" formula subject to exclusion of any PLA deployment on the island.

China’s re-emergence as a world power marks another turning point in the tide of history. A classic drama of power transition is playing out. The fracturing of the Asian Order is a clear manifestation.  A purely military strategy is fraught with uncontrollable risks of a “security dilemma” that may escalate into a regional if not global war. Managing and accommodating China’s rise without sacrificing American interests takes strategic insight and bold thinking in the broadest context.

While actual developments and events are unlikely to fit neatly into any recipe, deeper understanding and debate of the changing dynamics at work may help in better managing a more sustainable Asian Order, underpinned by an evolving U.S.-China relationship, the most important of bilateral relations in the 21^st century.

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(1)          See “Interpreting the U-shape Line in the South China Sea” dated 15 May, 2012 on China & US Focus, an online platform supported by the China-United States Exchange Foundation based in Hong Kong. A map of the disputed waters is attached here.

Download Map of disputed islands and waters in the South China Sea

(2)          Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance, and Reconnaissance.

(3)          “China’s Dollar Trap”, by Paul Krugman, in the New York Times, 2 April, 2009. 

(4)          “The Great Sino-American Divorce” by Mark Leonard, Reuters Columnist and Co-Founder and Director of the European Council on Foreign Relations, 23 August 2012, in his Column on Reuter.com.

(5)          “China’s Regional Strategy” by Professor Zhang Yuling and Associate Research Fellow Tang Shiping, both of the Academy of Social Sciences in Beijing, referring to the  four core concepts of China’s grand strategy, in “Power Shift, China’s and Asia’s New Dynamics”, David Shambaugh (ed.), University of California Press, 2005.

(6)          See Amitai Etzioni’s power classifications in “A Comparative Analysis of  Complex Organizations”, revised ed., New York: The Free Press, 1975.

(7)          “China’s rise in Asia need not be at America’s expense” by David Lampton, George and Sadie Hyman Professor and Director of China Studies at the John Hopkins University School of Advanced International Studies, in “Power Shift – China and Asia’s New Dynamics”, David Shambaugh (ed.), University of California Press, 2005.

(8)          “Global Trends 2025: A Transformed World”, National Intelligence Council, Washington D.C, 21 November, 2008.

(9)          “The China Choice: A Bold Vision for U.S.-China Relations”, in The Diplomat, an international current-affairs online magazine for the Asia-Pacific region, by Hugh White, professor of strategic studies at Australian National University, visiting fellow at the Lowy Institute, and author of the new book “The China Choice: Why America Should Share Power”, Black Inc. 20 August, 2012.      

(10)            “Balancing the East, Upgrading the West - U.S. Grand Strategy in an Age of Upheaval” in Foreign Affairs (January/February 2012), by Zbigniew Brzezinski, Robert E. Osgood Professor of American Foreign Policy at Johns Hopkins University's School of Advanced International Studies, a scholar at the Centre for Strategic and International Studies, and United States National Security Advisor to President Jimmy Carter from 1977 to 1981. The article was adapted from his soon-to-be published book, “Strategic Vision: America and the Crisis of Global Power.”