CHINAwatch

ASEAN reference to US-China Cold War in Pacific

Live discussion on In Focus, an insight program with Indus News on 30 June, 2020 (The relevant segment starts from time counter 17:50)

New Cold War: De-risking US-China conflict

A June 2020 Hinrich Foundation report authored by research fellow Dr. Alan Dupont offers seven insightful recommendations (Chapter 4):

(1) Protect democratic values and interests;
(2) Maintain a military edge;
(3) Manage decoupling to minimize disruptions; 
(4) Reform the WTO; 
(5) Strengthen international cooperation, middle-power diplomacy and "back channels"
(6) Develop new cyber and tech rules, protocols and agreements 
(7) Integrate economic and security policy.

These recommendations have a great deal to commend themselves. They may, however, benefit from the following additional perspectives -

(a) Does China really want to dominate the world, with all the obligations, costs and pushback implied? Would achievement of its China Dream be better realized by upholding multilateralism and a global "community of common destiny"? If so, instead of baiting an awoken lion by stroking fears of a global "China Scare", would there be room to encourage greater mutual understanding and learning between the West and China as regards governance and norms, without necessarily negating one or the other? 

(b) As for decoupling, it's true that the idea has gained much further traction thanks to the Coronavirus pandemic. So essentials like certain medical supplies and equipment plus products and components directly affecting national security are likely to see changes in their supply and value chains. But totally "cutting the Gordian knot" seems impossible, as Dr. Dupont quotes from John Lee of the Lowry Institute (page 28). This will become even more apparent with the coming Regional Comprehensive Economic Partnership (RCEP), the world's largest trading bloc, of which China will be a key Member. China has also indicated it may well join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Click here At many more countries already have China as the largest trading partner by far, the vast majority of nations do not want to be forced to choose between the United States and China. 

(c) As the world's Superpower, the United States already possesses overarching global military dominance on multiple fronts. It has 11 nuclear-powered aircraft carrier battle groups compared with China's nascent and miniscule version. It has some 800 military bases in 70 countries and territories, compared with China's only spot in Djibouti. It's nuclear stockpile is some tenfold over China's. Would stroking fears about US global military edge risk a "security spiral" with China and Russia, feeding into the American "military-industrial-complex" vested interests at the expense of much-needed improvements of homeland infrastructure, healthcare and education? 

(d) A looming new Cold War with the United States and the global  Coronavirus backlash have taught China a huge lesson. Its coming Five Year Plan (2021-2025) is likely to focus on improving its own people's livelihood and environment. Click here  Would cooperation with China on global issues of common interests such as Climate Change, denuclearization, anti-terrorism, water scarcity, poverty relief, UN Sustainable Development Goals, and reform of China's Belt and Road Initiative, be more productive in de-risking US-China conflict?         

China Has Two Paths to Global Domination

The above article appeared in Foreign Policy dated 22 May, 2020. It's penned by Hal Brands, Henry A. Kissinger distinguished professor of global affairs at Johns Hopkins University, and Jake Sullivan, nonresident senior fellow at the Carnegie Endowment for International Peace and a deputy assistant to President Barack Obama and national security advisor to Vice President Joe Biden from 2013 to 2014. 

The article argues that there are two paths whereby China could be seeking global domination.

One is a regional path by achieving primacy in the Western Pacific, similar to invocation of the Monroe Doctrine by a rising United States during early to mid 19th century.

The other path is more complex and sweeping. It consists of "building a new Chinese-led security and economic order across the Eurasian land mass and Indian Ocean, while establishing Chinese centrality in global institutions." The example quoted is China's Belt and Road Initiative with a "Digital Silk Road" component. The endgame is to convert pervading economic and technological advantage into global geopolitical dominance, including gravitas in international institutions such as the United Nations. 

The authors point out that the two paths are not mutually exclusive. The analysis is to debunk any naivety that that blocking China's advances in the Western Pacific would be sufficient to thwart China's design for hegemony. 

This is part of a continuing stream of US top-ranked researchers and opinion-formers reinforcing a pervasive sense of the "China Scare", reminiscent of the "Red Scare" at the height of the old Cold War.

Other eminent scholars and influential thinkers include Michael Pillsbury's "The Hundred-Year Marathon: China's Secret Strategy to Replace America as the Global Superpower" (2015), Graham Allison's "Destined for War - Can America and China Escape Thucydides Trap" (2017), and Robert Spalding's "Stealth War: How China Took Over while America's Elite Slept" (2019).

What this Foreign Policy analysis of the perceived "China Threat" is intuitively correct. Yet, the authors fail to ask whether China really wants to dominate the world, with all the obligations, costs and pushback implied, and whether its realistic trajectory lies in upholding multilateralism in a global "community of common destiny".

The authors' reference to China's single new military base in Djibouti as an example of a design to build a global network of military bases to rival the United States is hardly convincing, bearing in mind the latter has some 800 military bases in 70 countries and territories. Let's not forget also that Djibouti is a special strategic energy transit choke point which has long hosted similar military bases of the United States, France, Italy, Japan, and, possibly soon, Saudi Arabia and India. 

What is perceived as China's aggression or assertiveness may also be understood as China's response to perceived treat to its own security.

For example, apart from territorial disputes, the South China Sea is China's critical conduit for economic survival - trade, energy and other resource imports - which seems increasingly challenged by US military "encirclement" through bases in the so-called "first" and "second" island chains stretching from Okinawa, Guam and beyond. 

The question should also be asked whether China's Rise is a legitimate struggle of a proud, ancient civilization which has held sway for many more centuries in the past than the recent few under the thumbs of foreign aggressors. 

In other ways, the world would benefit from a deeper understanding of what China has to contend with and what the country has now become. For starters, a new two-part National Geographic video documentary China from Above: The Future is Now may serve as an appetizer. Click here and here .

Worsening Australia-China relations and what to do about it

As highlighted in this live TV interview on 9 June, China has warned citizens not to travel to Australia due to increasing hostility towards its nationals.

As Australia-China relations are plummeting, Gareth Evans, former Australian foreign minister (1988-96), and currently with the Australian National University, offers a nuanced yet realist view of how to engage with a perceived "increasingly-assertive" China to achieve a truly win-win relationship.

Read his article How Not to Respond to China dated18 June, 2020 on an online platform of the Asia Global Institute, a University of Hong Kong think-tank. 

India-China deadly clashes in the Galwan Valley Himalayan border

Notwithstanding long-existing border disputes including recent military standoff at Doklam, not a single shot has been fired on both sides for over 45 years. This latest clash is the first of its kind resulting in fatalities on both sides. An Explainer by The Guardian of 17 June, 2020 provides a brief background. 

My recorded interview for The Republic TV of India on 17 June, 2020 offers specific pointers to the way forward. (The Republic TV online channel boasts 930 million monthly page views and counting.) 

The territorial disputes between India and China go back to the British Raj designs on Tibet. Tibetan history with Chinese sovereignty or suzerainty spans over thousands of years of China's Dynasties. A 2017 video documentary, Tibet - The Truth produced by Monarex of Hollywood reveals some startling inconvenient truths behind Tibet's romanticized façade. 

Strategic US-China decoupling in the tech sector

This informative and insightful Hinrich Foundation report published on 4 June 2020 dissects the intricate web of mutual dependencies and rivalries in cutting-edge technologies between the two Great Powers, how conflicts may intensify and how multinationals could navigate through choppy waters. 

The following exerts give a glimpse of what the report is about -

"The China-US geopolitical competition has reached a tipping point and morphed into a new “cold war”, even as extensive trade and commercial ties continue on uncertain terms. In this report we look at why US-China decoupling in the tech sector is inevitable and implications for multinational companies."

"This is techno-nationalism on an unprecedented scale. Thus, as policymakers and business leaders outside of China contemplate this new reality, a new set of outcomes will emerge:

• Certain strategic value chains will decouple, restructure and diversify out of China.
• The US, EU and other state-actors will focus increasingly on countering Beijing’s economic nationalism with techno-nationalism initiatives of their own.
• Re-shoring and ring-fencing of some critical manufacturing will be unavoidable.
• New public-private partnerships, alliances and programs will need to emerge to compete with Chinese state and non-state actors.
• Multinationals will need to adjust to a world of increasingly fragmented and localized value chains.
• Businesses will have to adopt “in-China-for-China” business models if they wish to access the Chinese market."

Of particular note are the following titbits -

• Huawei claims 85,000 international tech patents. It is the world's biggest ICT patent holders in Europe, the top 50 patent holder in the United States, and the first in the world for patents related to 5G; 
• America's top tech firms are highly dependent on revenue from the China market: Qualcomm - 65%; Broadcom, Micron, and Marvell Technologies - more than 50% and the rest - 20-40%. 
• "Today, most innovations coming out of Silicon Valley cannot be manufactured unless they are made in China" (pages 10-11) 

Download Hinrich Foundation-Strategic Technology Decoupling from China-Alex-Capri-08 June2020

 

Will China become weaker or stronger after Covid-19?

As the Coronavirus crisis engulfs the world, China with its tarnished images is facing multiple headwinds. There are clamors in foreign countries for China's accountability and even reparations, harking back to China's past humiliations at the mercy of foreign aggressors.  While China is the first to recover from Covid-19, its slowing economy has taken a massive battering. Alarm bells are ringing about the millions of jobs lost which are unlikely to return anytime soon. 

Amid the doom and gloom, it is easy to lose sight of reality. According to an IMF update of 14 April, global economic growth this year is expected to drop to minus 3%. China and India are the only countries able to register positive growth, at 1.2% and 1.9% respectively. The American economy is expected to contract by 5.9%.  Next year, China's economy is forecast to rebound vigorously by 9.2%, compared with India's 7.4% and the U.S's 4.7%. 

A TIME article of 14 May speculates how How China Could Emerge Even Stronger After COVID-19 . Against this rosy prediction, many parts of China's economy remain ensnarled by grave disruptions in the global supply and value chain where China is a central hub. Additionally, the global chain is being de-Sinicized, according to a research note of 3 June, 2020 by BBVA, a French bank. As a result, China may lose 1.6% of its GDP annually. 

The research notes that most productions moving away from China are in labor-intensive sectors such as textile, footwear, wood plus labor-intensity parts of high-tech industries such as optical devices etc. However, labor-intensive operations have been moving away from China for years. This is a phenomenon of China's rising wages and other costs as much as its strategy of industrial upgrading. As long as such movements are offset by industrial higher value-added processes,such as robotics, and new employment is created in advanced manufacturing and in the services sector, the overall outcome may not be all negative. 

On the other hand, the US economic outlook appears less than robust while the Fed's massive money-printing doesn't seem to turn things around in the real economy. If China manages to restore steady growth over the coming years, it begs the question whether China may be able to overtake the US economy sooner than expected, say, before 2030?  

The Struggle for Power: U.S.-China Relations in the 21st Century

Leading up to the more robust, realist, and all-of-government pushback against China in the latest White House report United States Strategic Approach to the People’s Republic of China is the above 14-chapter book, The Struggle for Power: U.S.-China Relations in the 21st Century

The relatively concise, 14-chapter book was compiled earlier in 2019 by a team of distinguished American experts and scholars including Joseph Nye, Condoleezza Rice, Michael Pillsbury, Graham Allison, Elizabeth Economy, and David Shambaugh. The tome is a good read to understand the intensifying dynamics in US-China rivalry for economic, military, technological, and ideological dominance.