It is the world or nothing for China

2012-10-10Asia Times

Let's be fair: from the perspective of 30 years on, did it make any real sense for the United Kingdom to go to war in 1982 over the islands the British call the Falklands and the Argentines the Malvinas? For the UK, they were rocks on the other side of the world with no gas and no natural resources. Before the war, their tiny population didn't even have full-fledged British citizenship.

Yes, the occupier, an Argentina ruled by generals, was most unpleasant. It was a fascist regime that had cracked down on its own population with cruelty and gusto, and it had plunged the country into great economic difficulties. The occupation of the Malvinas was supposed to prop up the faltering government in Buenos Aires. Instead, it proved to be the final jolt to topple it.

Yet in the middle of the Cold War, what was the meaning of a costly final colonial campaign by prime minister Margaret Thatcher, who in the meantime was destroying the welfare system that supported millions in Britain? Thirty years ago, that war brought down the Argentine generals but did little else for the UK.

That September, just months after the war ended in June, Beijing stonewalled London's request to extend its 99-year lease of Hong Kong during Thatcher's first visit to China. The Falklands conflict had done nothing to stop or even weaken China's resolve to end the British colonial legacy in its territory. But in the meantime, the Falklands victory may have muddled many British minds.

After the war, London might have thought it had a strong hand to negotiate with Beijing over the Hong Kong lease extension. Beijing saw things differently. It thought London had shown once again that its colonial ambitions were not dead. Those ambitions had started the 19th-century Opium Wars, which began to bring down China. Such ambitions remained a threat to China and had to end.

If the British wanted to discuss the lease, it meant they recognized its validity. Moreover, China was no Argentina, and Hong Kong was no Falklands/Malvinas. The territory's water supply came from the mainland, and Hong Kong's Chinese majority had, to say the least, very split loyalties. Many would side with Beijing in the case of war. A conflict there would be a disaster on all fronts for Britain.

With hindsight, it seems that if London had simply not broached the subject of the return of Hong Kong and had allowed Hongkongers the right to vote for a local parliament, or even for the British Parliament, the territory might still be British to this day.

China might have never brought up the issue of the lease, and even if it did, it would have felt very awkward in the early 1980s about taking back a territory with full-fledged democratic experience. In other words, if Thatcher had negotiated with Argentina to give up the Falklands on the eve of the occupation of even after and if it had given Hong Kong democracy rather than attempting to negotiate with the Chinese over the lease, Britain might now have Hong Kong and be without the Falklands. It turned out to be the other way around.

Why did that happen? Britain misunderstood China and possibly put minor momentary priorities (the concern about the internal political balance in the UK if the people of Hong Kong were given a vote) before its larger, long-term interests. In fact, one can say that London did not see the bigger picture, both in space and history, in 1984.

Yet in an ironic turn, some Chinese today might by missing the bigger picture on the issue of the islands the Japanese call Senkaku and the Chinese call Diaoyudao, an issue that is in some respects similar to that of the Falklands/Malvinas.

The first lesson of geopolitics is that your politics ought to start from the political geography you inherited. From that, you can develop politically by adapting to your ambitions, objective conditions, and perceived circumstances for internal or external survival. [1]

China is surrounded by about 20 states, and with all of them there are contentious borders and potential flash points. This makes it impossible for China to have an expansive, aggressive foreign policy. Border friction with one country would provoke contentions and fear in all the others.

The only real reason this does not happen is the US presence in Asia, which lubricates relations and ties. If the US were to weaken the lubrication process, stop it, or kindle a little spark, that might be enough to scorch the whole prairie around China.

This tension was bound to increase as China grew politically and economically, just as the growing body of an adolescent puts stress on the seams and threatens to tear apart the baby clothes he still wears. Meanwhile, along with China and because of China, most of its neighbors also grew economically and politically, increasing their ambitions and the tensions among the neighbors. So the baby clothes were pulled from both ends.

That situation arose before the 2008 economic crisis, that is, before another point of contention between China and its neighbors. During 2009 and 2010, to stave off the dangers of contagion from the world economic crisis, China kept its exchange rate with the US dollar low and refused to revalue its currency, the yuan. This helped its economy and its exports, but it damaged the economies of neighbors that were manufacturing products very similar to Chinese exports. [2]

And so, to long-simmering border issues that were already under stress because of China and its neighbors' growth, Beijing inadvertently added a new flash point: economic competition in exports. It was as if a dried-up, flammable forest experienced a very hot summer with a scorching sun.

On this situation, the US could have sprayed water to prevent the searing of regional ties. But the US - also piqued by its many setbacks in 2009, the first year of President Barack Obama's administration - felt it had done enough to help China keep the regional peace and stability necessary for its continued economic growth, without even being noticed or thanked for it.

In 2010 therefore, US Secretary of State Hillary Rodham Clinton gave Vietnam a slight nudge on one of the most contentious issues, its claim on the Spratly Islands, and all hell broke loose. Tension with the Philippines went sky-high, and friction over the Spratlys quickly moved to another flash point, the Senkaku/Diaoyu Islands, which are under Japanese control. Moreover, Japan, which had just become the No 2 economy in Asia and third in the world after China's rise in gross domestic product, must have felt that those islands were its last stand to preserve its position in Asia and the world. If Tokyo were to give up on the Senkakus after it had been surpassed in GDP, its status in the world and the region could be compromised forever, according to some in its right wing.

Furthermore, as some senior Thai observers have pointed out to me, China's initial angry reactions on the Spratlys and the Senkakus simply scared the rest of Asia. After World War II, Japan did spread its influence in the region, but it did that through economic investment, the spread of welfare and industry. It was a new tool of politics. Conversely, China, as soon as it became strong and rich, seemed to revert to the old instruments of power: roaring and bullying. This Chinese behavior made Japan look better in Asia compared with rising China.

China acted as it did for many reasons. One was very important. It needed to weather the economic storm coming from the US in 2009. If China had also crashed in that storm, the whole world might have suffered even more, and China itself might have been badly hurt. In retrospect, many in China now argue that its stimulus program at the time was excessive. In reality, in such situations it is hard to assess clearly how much medicine is needed to make the patient recover, and one tends to over-medicate on the often correct assumption that recovery from an overdose is easier than from a dose that is too small.

It is now clear that the present European woes stem from exactly the opposite reaction: the European Union under-medicated Greece against its economic ills. So now a problem that could have been fixed with some 100 billion euros (US$130 billion) could take many trillions to solve, while it is also creating victims all around the continent, and could break the EU apart. In retrospect then, China did perform much better than the EU.

But certainly, China failed in transparency (it didn't make its motives and concerns clear to its neighbors and the US, which is a systemic problem for Beijing) and did not understand well the general predicament, despite the fact that some advisers warned of these risks. We now can say it all happened because China was pushed to the forefront of global politics without enough preparation, and suddenly faced a moment for which it thought it still had many years to prepare. It was as if a child in elementary school is immediately sent to university: he simply cannot follow the professors, no matter how brilliant he is.

In any event, this is all in the past. The problem now is how China can get out of this fix where each party views it from its own little corner. At this point, there are no easy solutions or short-term tricks. Any moves will only further complicate matters, just as applying the wrong medicine to an open wound with will only make it fester.

It is China's challenge to think of a strategy, but the preceding analysis shows the necessary points of intervention, and Beijing has started to heed some of them.

It is indispensable for China to ask for quick and massive US intervention. It seems this has already been done with Japan and the Southeast Asian countries, although we do not know how far Beijing went with its requests. However, it would be delusional to think that with a few steps the US could fix the massive damage on the ground. It takes minutes to burn down a house, but it takes months or years to rebuild it. So China needs to tighten its political cooperation with the US just to recover essential breathing space on its borders.

But this alone will not be enough. China has to come up with a completely new approach for dealing with its Asian neighbors, bringing them together and keeping the US in the loop. This is crucial because China's prickliness on territorial issues has groomed general sensitivity on the issue. South Korea is incensed by its own island controversy with Japan, and Taiwan has revamped its claim on the Senkakus. This may make Beijing's particular claim stronger, but it poisons the general air around China, and the well-being of the general area is more vital than the particular claims.

From these two premises comes the syllogistic conclusion, divided into two parts. First, there is the minor conclusion that simply to survive, China needs to take into consideration US and Asian points of view and interests. This must go well beyond old-fashioned Chinese manipulation - few would fall for that now.

Second, the major conclusion is that if China were to take in the US and Asia, this bloc, representing the majority of the world's population and GDP, would take over the world. Even the possibility of this would arouse fears and suspicion in Europe, Africa and Latin America. To avert this, China, which would be the most threatened by those countries' suspicions, has to consider their interests as well.

This means that at this point, just for its own survival, China must take in the whole world or it will not even get those deserted Senkaku rocks. It is a game of all or nothing. "All" does not mean Chinese domination of the world, impossible for many reasons, but quite the opposite: it means China's thorough adaptation to the rules of the world, which have been shaped for hundreds of years by the Western tradition.

In a way, Beijing already sees this, as its top adviser, Zheng Bijian, has proposed building a community of interests between China and the world. However, achieving this goal seems impossible. China needs to change deeply and quickly, because the next challenges might come much earlier than it expects. It appears more likely that China will fail miserably, and rationally one should think so.

Yet all that has happened in the past 30 years in China defies common reason. No Nobel Prize-winning economist forecast China's meteoric rise, and the few who believed in it did not get a Nobel but public scorn, both inside and outside China. This is not reason enough to believe that China can overcome the present problems, but at least it leaves room for the possibility that it might not fail.

1. It was for this reason that more than five years ago I examined the objective conditions of China's political geography. See "The blessing of China's threat", La Stampa, June 4, 2007. I chose that date of June 4 to publish this because I thought, and still do, that the issue was more important than the crackdown on the student movement in Tiananmen Square.
2. See my article China's new leaders on a tightrope (, Asia Times Online, September 13, 2012.  (2012-10-10 Asia Times)


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