Friday, 3 June 2016

Where the US and China truly clash

With the constant noise of terrorists, militants, failing states and the utterances of politicians, it’s easy to forget every nation decides what to do based on its unique “grand strategy.”

Such a concept sounds archaic. More at home perhaps in the thinking of Victorian England or Hapsburg Austria, perhaps. After all, most nations seem to be prioritising the advancement of globalisation which side-lines national needs for the good of the world, and may one day remove the need for borders entirely.

Discussing those strategic imperatives (the core compulsions and constraints on a state imposed by the interaction of geography, economics, politics, security and society) won’t help in understanding failed states. Nations that haven’t achieved or cannot maintain their strategic imperatives are more rightly said to be transitioning to a fresh state that can – sovereignty is always conserved.

Stable states have clear strategic imperatives which evolve over time. New Zealand, as an island nation, has imperatives including ensuring the flow of sea-borne goods in the Pacific, allying with the global maritime power, protecting the ocean approaches to its coastlines and maintaining internal unity between rural and urban regions.

Despite occasional delusions of grandeur in Wellington, New Zealand’s pursuit of its grand strategy is peripheral to global concerns. Only two states sit at the centre of the global system, China and the US, with everybody watching for signs of their individual strategic imperatives clashing. Both can leverage considerable heft, although the US is superior both in military and economic terms.

Its global power emerges from its success in achieving its unique strategic imperatives: dominate the Greater Mississippi Basin, eliminate all land-based threats to the Greater Mississippi Basin, control the ocean approaches to the North American continent, control the world’s oceans and prevent any potential challengers from rising.

The US is the only nation to have ever controlled both the Pacific and Atlantic oceans. Even at the height of its power, the British Navy had serious competition from other European empires. Since the end of WWII, the US has sought to ensure unchallenged maritime domination of the rest of the world’s oceans. This has made it rich and reduced its vulnerability.

Now, compare those imperatives with China’s grand strategy: maintain internal unity in the Han Chinese regions, maintain control of its buffer regions, protect the coast from foreign encroachment and protect its strategic trade routes, resources and markets from foreign interdiction.

One thing should be clear: most of China’s strategic trade routes are maritime. China’s incredible economic rise has led it to view the world entirely through the lens of supply chains. It sees New Zealand as a food supplier, Australia as an iron ore and natural gas exporter, Argentina as a soybean supplier, Zambia as a metals hub and Tanzania as a shipping hub.

To ensure the flow of these goods, China is not buying the developing world – despite what its critics say – but rather building up those emerging economies in exchange for using their natural resources. The positive result is that these projects are connecting the world in new ways and making Western political goals for the developing world possible.

Yet a negative result is emerging too, and it goes back to the US and China’s grand strategies. Right now, neither nation can threaten the other’s first two imperatives. The Greater Mississippi Basin is well out of reach of Chinese aggression and even the mighty US military lacks the necessary troops to control a billion people in China’s Han regions.

Where the two may be clashing, and would explain Beijing’s and Washington’s confrontational rhetoric, is in the two nation’s latter maritime imperatives. If the economic success for both relies on uninterrupted access to sea-borne trade routes, and neither can be certain such access will be guaranteed in the future, a high-level and dangerous clash may be stirring.

As most readers will be aware, China is already moving down the logical pathways to achieve its strategic goals. For instance, in protecting its coastline, it must extend its reach to at least the so-called Nine Dash Line – a series of arbitrary and semi-historic demarcations outlining “Chinese” waters in the Western Pacific. Its island building and aggressive fishing are part of this strategy.

Yet once China is comfortable in this section of the Pacific, it will have created a new frontier. China will then reorient its might to make sure those new maritime borders are stable creating a fresh, wider frontier. It will then reorient its forces again, and so on, compelled into expansion only to better protect its trade routes. This is logical geopolitics, and it was precisely the process the US employed to achieve its imperatives in the 20th century.

China will attempt this not only in the Pacific, but into the Indian Ocean and beyond. Witness the $US46 billion agreement between China and Pakistan signed this month to create the China-Pakistan Economic Corridor (CPEC). The project will link China with two Pakistani ports, strengthen China’s influence in the region and give it an export corridor to the Arabian Sea.

That last is key because the majority of Middle Eastern crude oil is destined for Asian markets. To reach China this oil must sail through chokepoints at the Strait of Malacca (82% of China’s oil passed through in 2014). Since most of China’s developing trade links are in the Indian Ocean, it will increasingly rely on the free passage of the Mallacca, Lombok and Sundra Straits in years to come.

So long as these goods reach their destination, the situation is stable. As per their own grand strategy, the US Navy ensures safe passage of shipping through those straits and the Chinese have grown rich by this arrangement. But Chinese planners are not historically illiterate and know the status quo might not last.

They must prepare for a world in which either the US can no longer guarantee safe passage or it chooses to block such passage for some hostile reason. This might sound infeasible today but the enclosure of China’s near seas would make it relatively easy for an adversary to disrupt or interdict Chinese trade and strangle it. This vulnerability drives all of Chinese strategic thinking.

Beyond this is the emerging need for China to end its policy of political non-interference in its trading partners. China’s cash is attractive because it doesn’t come with the strings of democratic reform. Yet the more it relies on the continued flow of goods, the more it may try to impress political stability on those countries. This too would clash with US strategic goals.

The relationship between the US and China was always going to be competitive, but as this column has argued the relationship doesn’t have to come to blows. There are many rational, non-heroic policy decisions on both sides of the Pacific that can avoid this outcome.

Yet China is changing and this healthy competition with the US is approaching a clash of grand strategies. Ideally both powers would balance to ensure the growth and safety of the other, the paradox is that neither side can be sure the other isn’t playing for domination. Even if that threat is slightly possible, it will continue to drive every strategic decision. And so the cost of inaction on either side climbs higher, exacerbating the perceived threat. This is what happens when a rising power tussles with a status quo power.

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