July 1, 2006  

The global dragon

China’s new strategy: Making friends, creating enemies

When Chinese Premier Deng Xiaoping unleashed economic reforms in the People’s Republic of China (PRC) almost 30 years ago, no one imagined the effect it would have on China — or the world. Finally freed from the shackles of an inefficient command economy, these reforms transformed the PRC into a commercial juggernaut and a rapidly rising diplomatic and military force in world politics — to say nothing of a potential military competitor for the U.S.

Chinese leaders believe that if its unprecedented economic growth continues, the PRC will be able to return to its glorious, hegemonic past as Asia’s “Middle Kingdom.” In Beijing’s view, China will eventually be able to challenge the world’s most powerful nations, including the U.S., for control of the international system. China-watchers believe the PRC, the world’s fourth-largest economy with the third-biggest defense budget, is well on its way. China’s exploding international economic presence is resulting in growing influence well beyond its East Asian sphere of influence — and Beijing is taking advantage of it. Rather than observing from the sidelines, China is playing a central role in nearly every major international issue. China sees its re-emergence as a superpower as a certainty.

A subset of China’s grand strategy is an opportunistic foreign policy aimed at its main competitor in the international system, the U.S. Beijing is carefully pursuing a low-profile, nonconfrontational policy that aims to advance China’s national interests while attempting to balance — or, preferably, unbalance — Washington’s global predominance. China is using economic incentives and attempting to exploit dissatisfaction with America wherever possible to build relationships across the globe of current or future utility.

Into Africa

Beijing is busily expanding its influence in Africa. Seeking new markets for its export-driven economy and unimpeded — even exclusive — access to Africa’s abundant natural resources, China lavishes African leaders with diplomatic attention, including more than 200 high-level visits over the past two years alone. The U.S. was but one stop on Chinese President Hu Jintao’s recent world tour; two stops were in Africa. Beijing also provides generous financial, commercial and even military assistance, adhering to a “noninterference in internal affairs” policy that Africa’s strongmen find comforting. Desperate to invigorate failing economies while maintaining a strong grip on power, some authoritarian African leaders find China’s development model, based on a limited market economy controlled by a totalitarian government, attractive. Accordingly, Africa’s traditional European and American partners now find their vision of a continent governed by free-market democracies challenged by Beijing’s scramble for influence and resources.

Looking to diversify away from volatile Middle East energy suppliers, Beijing gets 30 percent of its oil from Africa. The PRC has invested billions in resource development and infrastructure — and written off billions more in debt — to help build cozy relationships with dozens of African energy suppliers and even to coax African nations that recognize Taiwan to switch allegiances to the PRC. For instance, facing rebel attacks against their country’s oil infrastructure and foreign oil workers, and disappointed in the American response, Nigeria — the world’s eighth largest oil exporter — turned to China for military aid. China’s unconditional security assistance to Nigeria will not only protect Beijing’s $3 billion oil investment, but will also likely lead to additional lucrative oil concessions from Abuja.

In Angola, another African energy giant, a $2 billion credit line for infrastructure projects secured Chinese access to coveted offshore oil fields. Sudan, perhaps, is the most pernicious example of China’s new Africa policy. While the U.S. and others sought to impose U.N. sanctions on Sudan over the genocide in Darfur, China opposed economic sanctions to protect its $3 billion investment in Sudan’s energy industry. China helped Sudan build three weapons factories, complicating arms embargos against Khartoum. Of course, China ensures access to Zimbabwe’s abundant natural resources by ignoring President Robert Mugabe’s political and human rights abuses.

From Russia with love?

A Sino-Russian romance is blossoming. While both Moscow and Beijing still retain a healthy dose of historical mutual suspicion — and competitive spirit — toward one another, today, China looks to Russia as a potentially important strategic partner across a wide swath of issues. The relationship is characterized by increasing economic, political, and even military activity and cooperation. Both countries have decided that working together to create a “new international order” and a “multipolar world” to advance their interests and balance American influence is mutually beneficial.

For starters, Russia and China have hampered U.S.- and European Union-led efforts to address Iran’s nuclear program. Beijing and Moscow have been reluctant to impose economic sanctions over Iran’s atomic intransigence. No surprise: Moscow and Beijing have too much at stake in their relationships with Tehran. China is investing $100 billion in Iran’s oil/gas fields; Russia is building Iran’s $1 billion nuclear reactor at Bushehr and hopes to make more by reprocessing Iranian nuclear reactor fuel. Both sell millions in advanced weapons to Iran.

There are also big questions about Russian and Chinese willingness to address North Korea’s nuclear weapons program. While Pyongyang may be a troubling comrade for Moscow and Beijing, neither minds that the North Korean nuclear issue causes strategic and political trouble for Washington and exacerbates U.S.-South Korean alliance problems. China certainly does not mind that North Korean missiles are bore-sighted on rival Japan, either.

Perhaps most disconcerting is the growing military cooperation between China and Russia. Last summer, Moscow and Beijing conducted their first joint military exercises, which included more than 10,000 military, intelligence and internal security forces. Both capitals claimed the drills were anti-terrorism in nature and were not aimed at any country — not that anyone in the U.S., Taiwan or Japan believed that. Rumors abound that another series of joint exercises is planned for later this year. Of course, Russia is fueling China’s military buildup with advanced equipment and technology — selling the People’s Liberation Army billions in advanced submarines, fighters, destroyers and missiles. Moscow has transferred SU-27/30 fighter aircraft, Sovremennyy-class destroyers, S-300 air defense systems and Kilo-class diesel destroyers — half of Russian arms exports. Just recently, Beijing purchased Russian IL-76 aircraft for troop movement, air-to-air refueling and Airborne Warning and Control System-type duties.

China also looks to Russia as an energy partner, providing 10 percent of China’s energy needs. Earlier this year, Russia, the world’s No. 2 energy producer, signed a slew of energy deals with China, now the world’s second-largest energy consumer, including a deal to build a 2,000-mile-long Sino-Russian gas pipeline. The pacts allow Beijing to compete with energy-poor Japan for access to Russian resources. Sales to China give Russia an alternative to the demanding, increasingly “Green” European energy market — and also give Moscow leverage over Beijing.

Charming Europe

The PRC has been on a charm offensive in Europe, taking advantage of the continent’s general foreign policy view that China’s rise will be peaceful, tempered by growing economic interdependence, international institutions and democratic transformation. This exceedingly optimistic view, promoted by the likes of French President Jacques Chirac and former German Chancellor Gerhard Schroeder, is not embraced by all Europeans but has not gone unnoticed in Beijing. Like Russia, China seeks economic ties as well as solidarity with Europe as another potential counterweight to America’s global leadership.

One of the key means of strengthening ties between Europe and Beijing has been trade, increasing by 20 percent in 2004 alone. While Europe gripes about the dumping of cheap clothing and shoes on the European market, it glows over China’s choice of European-based Airbus aircraft over its American competitor, Boeing, in the world’s fastest-growing aviation market. But beyond growing Sino-European trade, another of China’s primary goals is political. The PRC wants the European Union to lift its arms embargo that was imposed after the 1989 Tiananmen Square democracy crackdown. After years of intense Chinese lobbying, many European Union member states, led by the French and Germans, were eager to lift the ban as part of a normalization of relations between the two sides. China sees the lifting of the ban as a significant political gesture, publicly absolving the Chinese Communist Party of its transgressions at Tiananmen. Some argued that lifting the ban would reward China’s dismal human rights record and sweep Tiananmen under the rug. The U.S. argued that lifting the ban would not only overlook continuing Chinese human rights problems, but also give Beijing access to advanced European weapons and technology. While Beijing is buying Moscow’s top-notch military wares, China might opt for more advanced European C4ISR to integrate new military hardware, improving its war-fighting capabilities and further shifting the military balance of power across the Taiwan Strait in Beijing’s favor. Alas, American pressure and some clumsy Chinese diplomacy in the form of the passage of the Anti-Secession Law by the PRC’s National People’s Congress scuttled last spring’s effort to end the embargo. Nevertheless, it is likely that lifting the ban will be considered again by the European Union at some point.

A Latin tango

China’s growing interest in Latin America and the Caribbean can be summarized in two words: energy and Taiwan. Beyond these two objectives, Beijing also does not mind prodding Washington with its growing presence in the western hemisphere; its relationship with leftist, anti-American states such as Cuba and Venezuela; and promoting the possibility of replacing the U.S. as the most influential big power in the region.

As usual, China is auguring into the region with economics. The PRC is already investing more in Latin America than any other region outside Asia. Hu visited the region in November 2004, promising to invest $100 billion in Latin America over the next 10 years. While access to copper, iron ore, nickel and soybeans are important, they pale in comparison to China’s interest in the region’s oil and gas. Latin America has 15 percent of the world’s proven oil reserves. Venezuela has the largest oil reserves outside the Middle East and the largest gas reserves in Latin America. In a slap at the U.S., President Hugo Chavez has opened Venezuela’s oil fields to Chinese development. Beijing is also drilling in Cuba’s coastal waters, not far from the U.S. mainland. Bolivia, which has announced plans to nationalize its energy industry, has also invited China to develop the country’s substantive gas reserves, Latin America’s second largest.

China has also made political inroads in the region. Beijing gained observer status in the Organization of American States, a key regional organization. Not only will this increase China’s influence and stature, it also will improve Beijing’s chances of isolating Taipei by enticing the 12 regional countries that recognize Taiwan to shift their diplomatic allegiances to the PRC. Beijing also focuses its diplomatic efforts on countries that have ideological differences with Washington, such as Venezuela, Cuba and Bolivia.

The PRC is playing a minor, regional security role as well. In September 2004, China sent a 155-man peacekeeping force to Haiti. This represents the first deployment of Chinese forces in the western hemisphere. Moreover, U.S. Southern Command testified to Congress this year that China has been training increasing numbers of Latin American military personnel, especially in countries where U.S. military aid has been halted over International Criminal Court jurisdiction. Senior Chinese defense officials have also held exchanges with Ecuador, Bolivia and Chile, and provide military assistance to Jamaica and Venezuela. As China develops its defense industry, it may find a market in the region. Venezuela has reportedly looked at Chinese armaments, including fighters, to replace U.S.-made F-16s.

The Silk Road

A glance at the map shows Central Asia is China’s backyard. Some might call it the PRC’s soft underbelly, inhabited by Islamic states that border China’s restive Muslim Xinjiang province, making it ripe for fundamentalism, separatism and terrorism. To increase Chinese influence in Central Asia, protect its western flanks and guard against America’s entrance into the region after 9/11, China secured an institutional alliance, the Shanghai Cooperation Organization (SCO), with Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Russia in 2001.

These efforts have not only undermined the U.S. in Central Asia, but have also concurrently challenged Russia’s long-held sway over the former Soviet republics as well. Chinese influence also allows Beijing to oppose Central Asian democratic movements such as Beijing’s support for the 2005 crackdown in Uzbekistan. In China’s view, keeping Central Asian dictators in power not only ensures stability, but also helps silence calls for greater political freedom at home.

Beijing has also moved to eliminate American troop presence in Central Asia by encouraging Uzbekistan and Kyrgyzstan to end their host-nation relationships with the U.S. It succeeded in Uzbekistan, which closed Karshi Khanabad air base. Kyrgyzstan’s Manas air base is likely to be shuttered as well, considering that the cost of the U.S. access agreement is being hiked from $2 million to $200 million per year. A Chinese military base in Central Asia under SCO cover would give China a controversial foothold in the region — and more influence.

No surprise that access to significant energy resources tops China’s economic interest in Central Asia, especially reducing Russia’s monopoly on the region’s oil and gas. Using Kazakh and Turkmen pipelines that stretch to Shanghai, Central Asia provides China with near direct access to alternative energy sources that originate outside the volatile Middle East and distant Africa and Latin America. Central Asian pipelines also reduce Beijing’s reliance on interrupted energy resources that arrive by sea courtesy of the U.S. Navy.

China’s filling station

The days when China was a passive actor in the Middle East are gone. Beijing will play an increasingly important role in the region to ensure a constant flow of oil and gas, develop new markets for its goods — including weapons and Chinese labor — and check the spread of Islamic radicalism from Iran (i.e., Shia fundamentalism) and Saudi Arabia (i.e., Wahhabism) to China’s western regions, home to 55 million Chinese Muslims.

In addition to appointing its first Middle East envoy in 2002, China’s growing presence is encouraging Middle Eastern states to view China as an alternative partner and/or counterbalance to American power in the region.

But China’s primary interest in the Middle East is oil and gas. More than half of China’s oil imports come from the Middle East, 30 percent from Iran and Saudi Arabia alone.

Even though Saudi Arabia has been friendly with the U.S. for some 60 years, China is making an effort to get Saudi attention in the aftermath of 9/11. In recent months, Hu has visited Riyadh, while Saudi King Abdullah has called on Beijing. Another key energy nation, Kuwait, is investing in Chinese refinery facilities, and Beijing launched an energy dialogue with OPEC.

China is also a player on the security front. Beijing continues to cultivate relations with Israel to acquire advanced technology, despite a long-standing sympathy for the Palestinian cause. After Russia, Israel is China’s second-largest arms supplier. Israel has transferred Harpy anti-radar drones, Python air-to-air missiles and advanced technology for China’s new J-10 fighter. China is also involved with Israel’s potential adversaries. Since the mid-1980s, China has sold Iran the HY-2, C-801 and C-802 anti-ship ballistic and cruise missiles. The PRC, along with Russia and North Korea, are leading facilitators of Iran’s ballistic missile program. Riyadh is reportedly ready to upgrade the CSS-2s with newer, more-advanced Chinese ballistic missiles, probably as a result of the growing Iranian threat to the Persian Gulf region.

On the evidence, China is willing to provide military assistance and equipment wherever it advances its interests.

A passage to India

China has been a player in South Asia for some time, maintaining its client state relationship with Pakistan to contain the influence of South Asia’s giant, India.

The Sino-Indian relationship, marked by competition and cooperation, has come a long way since 1998, when India and Pakistan (with Chinese assistance) nearly simultaneously joined the exclusive nuclear weapons club. Today, China is courting India to ensure that New Delhi does not join any political arrangement that may have an anti-Chinese purpose, including a closer relationship with Washington. To this end, New Delhi and Beijing agreed to cooperate on energy security and settled their long-standing border disputes, while increasing trade by 40 percent in 2005. China, while opposing Japan, even supported India’s bid for a U.N. Security Council seat.

The PRC also maintains continuing close ties with Pakistan in case Indian relations turn for the worse, and encourages Islamabad to deal with Islamic radicalism that might take root in China. The PRC increasingly values Pakistan for its location on the Arabian Sea. Much to India’s displeasure, China is constructing a deepwater port at Gwadar on the Indian Ocean. The new port, like other Chinese-developed ports in Cambodia and Burma, will eventually allow the Chinese Navy to hedge against America’s — and India’s — monopoly over major sea lanes.

Beijing has also agreed to help Pakistan construct a second nuclear reactor, and supports Islamabad’s ballistic missile program. China is wooing other South Asia states, such as neighboring Nepal and Bangladesh, to empower its regional influence as well. In 2005, China obtained observer status at the South Asian Association of Regional Cooperation meeting, a key regional institution — over India’s objections.

No country will shape the course of the 21st century — for good or bad — more than the PRC. Its international activism indicates that Beijing has ambitions that exceed China’s historical East Asian sphere of influence. No major region of the world is untouched by China’s growing presence. The PRC aspires to replace the U.S. as the world’s most powerful nation, using political, security and economic incentives — often without conditions — and preying upon U.S.-skeptic leaders wherever possible. The question is: Will the world be better off with China atop the international system? At the moment, there are strong reasons to doubt it.

In sum, the likelihood that Chinese and U.S. security interests might come to cross purposes is increasing — not only in the Pacific, but also in many other volatile regions of the world, including the greater Middle East. Misperception and miscalculation, leading to an unintended confrontation between Washington and Beijing, is a real possibility. Maintaining and advancing important strategic interests, including energy security and key relationships, will be vital for both sides.

Crafting a hedging strategy in the face of rising Chinese national, especially military, power is no longer a regional challenge but a global challenge for the U.S.

Heritage Foundation senior fellow Peter Brookes is former deputy assistant secretary of defense and the author of “A Devil’s Triangle: Terrorism, WMD and Rogue States.” He is a commander in the U.S. Navy Reserve.