Will there be a US-China naval showdown?

By S.P.SETH

If one were to go by the apparent bonhomie in US-China relations since the Obama administration took over, it would be fair to surmise that there has been a significant shift in the US policy toward China in favor of not only cooperative but, indeed, collaborative relationship.

But this is only part of the story, as we shall see later.

An important change on the US side was detected during Secretary of State Hillary Clinton’s China visit. She asserted that the US’ concerns about China’s human rights record would not derail progress in other areas.

Beijing greatly appreciated this.

China was also encouraged and felt proud by the inclusion of two ethnic Chinese in the Obama cabinet, with Steven Chu as Secretary of Energy and Gary Locke as Secretary of Commerce.

This is a double-edged sword.

Beijing believes that the Chinese ethnicity and heritage should transcend all other loyalties of overseas Chinese to serve the cause of the old motherland and its communist political order.

This was bluntly articulated by Wang Zhaoguo, a Politburo member and a former head of China’s United Front Department, at the Eighth National Congress of Retuned Overseas Chinese and their Relatives.

He reportedly congratulated them for using “blood lineage”, “home-town feeling” and “professional linkages” to achieve “outstanding results in uniting the broad masses of overseas Chinese.”

Obviously, Steven Chu and Gary Locke are outstanding US citizens and their patriotism is beyond question. Otherwise, they wouldn’t be where they are today in the United States.

But such calls on overseas Chinese to put their ethnicity above their citizenship can be counterproductive in the United States, or anywhere else where ethnic Chinese are living by raising the specter of a “fifth column.”

However, the Sino-US bilateral relationship presently looks like going through a honeymoon period of sorts. It was dramatically demonstrated when over 250 high level Chinese officials descended on Washington in late July for their annual Strategic and Economic Dialogue.

In his opening speech to the assembled Chinese officials, President Obama highlighted the importance of the relationship when he said, “The relationship between the United States and China will shape the 21^st century.”

The US and China are seen in some quarters as the duumvirate (G-2) in the matter of managing the world economy.

Emphasizing convergence in their respective responses to the global economic crisis, Jim Steinberg, deputy secretary of state, has said, “I think it’s demonstrated that there is no decoupling, that we need each other.”

During her China visit, Secretary of State Hilary Clinton expressed her appreciation for China’s investments in US treasury bills and bonds.

China is now said to be the country’s biggest foreign creditor.

But what has happened so far is simply the change in atmospherics, without any substantive improvement.

Take, for instance, the question of trade imbalance, with China stockpiling billions of surplus US dollars.

During the presidential election, candidate Obama accused China of manipulating its currency to gain export advantage, costing jobs in the United States.

In the new atmosphere, the United States no longer uses the word “manipulation” of currency. But they still maintain that the yuan is undervalued.

In other words, the huge trade imbalance and the resultant billions of dollars in currency reserves that China continues to accumulate, still remains a serious issue.

And then there is the climate change question. While China is making a lot of noise on controlling carbon emissions in the future, it is not willing to accept binding cuts.

This could develop into a very serious issue if the carbon emission control legislation, being developed in the Senate, were to impose tariffs on products from countries, like China, that do not accept binding cuts to their emissions.

However, the US seems keen to have China’s support on some contentious international issues. For instance, the United States is hoping to have China on board with new sanctions on Iran, if it were necessary.

While China supports nuclear non-proliferation and Iran’s inclusion in it, it is not keen on UN Security-Council mandated sanctions.

Indeed, China hosted an official visit from Iran’s Vice-President, Mohammad Reza Rahimi, only a few days ago. The Chinese news agency Xinhua reported Premier Wen Jiabao enthusiastically commending the progress in Sino-Iranian relations at a meeting with the visiting official guest.

He said, “The Sino-Iranian relationship has witnessed rapid development, as the two countries’ leaders have had frequent exchanges, and cooperation in trade and energy has widened and deepened.”

Even with existing sanctions in place, two-way trade between China and Iran rose 35 per cent last year, to $27 billion.

And in the last five years, China has reportedly signed about $120 billion worth of oil deals with Iran.

In light of such high stakes in economic ties with Iran, it doesn’t look like that China will come on board with the United States in any significant way, if required.

North Korea, though, has increasingly become an area of shared concern. Washington has come to rely heavily on China to persuade or coerce Pyongyang into giving up its nuclear ambitions.

Despite Wen Jiabao’s recent visit to North Korea, the latter remains obdurate. But Beijing is not willing to go all the way to bring down the regime in Pyongyang for fear of a flood of refugees into China.

China’s political leverage in the hermit kingdom is limited, as it doesn’t seem to have access to any alternative political centre, if it exists at all.

Therefore, the US reliance on China in regard to North Korea seems as unproductive as any other available course.

Even though the political rhetoric on China is sounding quite positive, there is considerable concern on its rising military power.

Lately, there has been a panic of sorts in the US military circles over China’s development of a ‘killer missile’, believed to have “the range of a ballistic missile and the accuracy of a cruise missile” , to target US aircraft carriers.

According to Randy Schriver, a US military analyst, “The Chinese would have the ability to hold our carriers at a great distance—it almost makes the aircraft carriers obsolete.”

Vice-Admiral John Bird, commander of the Seventh Fleet, is worried too, though he doesn’t think that China’s ‘killer missile’ will make aircraft carriers obsolete.

He said, in Sydney that, “Challenged with that threat you might adjust your approach, but that is a far cry from making carriers obsolete.”

But John Bird does think that China’s naval capability “has grown much faster than any of our predictions.” And many of these new capabilities “are intended to counter” the US navy, with weapons systems “targeted to our carriers and larger ships.”

Referring to some provocative naval incidents in the past few months in the South China Sea, he said, “They [China] have made it clear they consider the South China Sea to be more or less theirs.”

And he is quite right because China passed legislation in the nineties to assert that claim.

South China Sea is, therefore, likely to increasingly become the testing ground of China’s maritime power.

Basically, according to Vice-Admiral John Bird, “…the Chinese would like to see less of the Seventh Fleet in this part of the world.”

He suggested that China aimed ultimately to displace the US in the Pacific.

In other words, despite all the recent political bonhomie between the US and China, the inherent logic of an eventual naval showdown at some point in the future is hard to ignore.

China’s Rise Spells Turbulence

By S.P.SETH

China’s communist rulers put up a big show to celebrate the sixtieth anniversary of their revolution. But the show was not open to the people of the People’s Republic of China, except on TV screens.

The residents with houses and balconies with the parade view were barred from looking out. The hotels were barred from having guests.

This says a lot about the regime that doesn’t trust its own people while celebrating the country’s achievements over a sixty-year period. What are they afraid of?

Obviously even after China’s impressive economic growth and growing military might, the regime still worries about its popular legitimacy.

They don’t seem quite sure if the implied social contract they have made with the people for legitimacy, based on economic growth, is working or not.

China’s communist oligarchy seeks legitimacy for monopoly of power indefinitely, without popular participation. The exclusion of people from the sixtieth anniversary celebrations is a classical example of both arrogance and paranoia.

There are two elements to China’s strategy to keep people on its side. The first is continuing economic growth to absorb the growing pool of unemployed people. The recent economic slowdown has put a damper on it despite the large economic stimulus package.

The hastily-packaged stimulus spending is creating further distortions in an economy already lopsided to fuel real estate and stock market fluctuations as well some shoddy infrastructure spending.

The government is now reining down some of it for fear of fueling inflation. But with so much dependent on maintaining economic momentum to contain social instability, it seems like the government is all the time trying to plug a leaking boat which might flounder some where along the line.

And since there are no measurable yardsticks of popular support like democratic elections and supportive institutions, the government is always second-guessing its people.

There is widespread social unrest across the country. The government has stopped publishing annual statistics of such protests because the situation is getting worse.

This is not to suggest that there is an imminent threat to the Party’s power but there is a steady, though scattered, groundswell of frustration and anger.

And this is coalescing around corruption. At its recent party meeting, the leadership admitted that the corruption has “seriously damaged the party’s flesh-and-blood bond with the people and has seriously affected the solidity of the party’s ruling status.”

Corruption is everywhere in the country. The Transparency International, an anti-corruption watchdog, has reportedly listed China as the second worst country in bribery out of 22 in its 2008 report.

Corruption now is institutionalized and because it involves all levels of the Party and government, it is becoming increasingly difficult to root out.

And even when some big fish is snared occasionally and punished severely, it is generally attributed to political vendetta.

And this general sense of malaise and corruption is not helped when the sons and daughters of top party leadership control some of the biggest business conglomerates in China.

For instance, the former president and party general secretary Jiang Zemin’s son is reportedly the country’s telecommunications tsar. Li Peng’s family is controlling the power sector. Zhu Ronji’s son is into banking. And President Hu Jintao’s son recently sold automated ticket machines to Beijing city government.

All these princelings might be shrewd businessmen and women in their own right, but it is only fair to ask if they would have made it to the top business league but for their political connections?

No wonder that corruption and nepotism have become the focus of people’s frustration and anger against the system.

And because the problem is systemic and entrenched at the highest levels in some form or the other, there is lack of concerted action to deal with it.

Therefore, despite impressive economic growth as an exercise in legitimacy, the Party is not so sure about its rapport with the people.

At the same time, the rural masses of the country have largely missed out from economic growth, with resources mainly directed to China’s industrial economy.

Indeed, they have been subsidizing industrial growth through diversion of rural land, water supply, relatively depressed prices of rural products and export of cheap labor to work on urban construction and industrial sites.

There is widespread paranoia at the Party’s top level about danger lurking everywhere, evident in the exclusion of people from official celebrations.

Which manifests itself even more severely when dealing with ethnic minorities like the Tibetans and Uighur people.

Indeed, the Party is not averse to using mainstream Han population against these marginalized minorities to whip up national hysteria, inside and outside the country. This was evident at the time of the Beijing Olympics.

At the same time, there is a deeply felt sense of historical humiliation inflicted on China during the 19^th century, as well as the Japanese invasion and atrocities of the last century.

Therefore, when Mao declared China’s liberation and the inauguration of the People’s Republic of China on October 1, 1949, he also proudly announced that this was the moment when ‘China has stood up’.

In other words, China’s “liberation” was essentially couched in nationalist terms.

However, Mao got distracted with his power plays leading to purges, disastrous experiments of economic and social engineering like the Great Leap Forward culminating in the lost decade of the Cultural Revolution.

It was only after Mao’s death that China’s leadership got a clear sense of direction under Deng Xiaoping about building up the country into a modern and powerful state. And to achieve this it was imperative to create a growing and modern economy.

The only successful model for this was to harness aspects of capitalism to build up China.

Apart from economic growth, nationalism (increasingly as xenophobia) is another important plank in the Party’s exercise in popular legitimacy.

The sixtieth birth day military parade, with China’s armed might on display, was intended both to rally people around the Party as the architect and builder of China’s national power; as well as to serve notice on the world that China really means business when it comes to defending and promoting its perceived national interests.

And these national interests are not static but expanding with its global power.

Deng Xiaoping advised that China should bide its time while getting on with the task of building a strong and powerful nation.

Today’s communist leaders believe that China is now in a position to flex its muscles but without going overboard as it still has quite some way to go to attain military parity with the United States.

But the upcoming generation of new communist leadership material is quite jingoistic in terms of China’s national interests.

Wang Xiaodong, an influential leader of the China Youth and Juvenile Research Centre, for instance, is quoted in the Australian newspaper (in a report from its China correspondent) to say that the younger generation “will globalize its [China’s] national interests, and this will affect not just our close neighbors but the whole world. It [China] must gain the capacity to protect those interests.”

The process of expanding China’s national interests, and to secure them with greater projection of its military power, has already begun evidenced from the scramble for resources.

Its stark manifestation was the jostling of a US ship in the South China Sea, and similar incidents of lesser intensity.

Communist China’s 6oth birthday was a massive display of its power, with obvious message for the world.

And if the Party comes under pressure from increased social unrest (as seems likely), the temptation to turn up the nationalist heat to rally people around the flag might be irresistible.

And this is not what the world looking for from a rising China.