New big noise on the block

Posted on November 11, 2012


China is getting bigger and stronger, but it will take more than that for it to elbow aside US dominance.

Now that we’ve found out who will lead the US for the next four years, we can get back to the main game of figuring out who will lead the world for the next 400.

You’ve heard the projections. China will have a bigger economy than America’s in four years, according to the International Monetary Fund.

And China’s military spending will eclipse America’s about 20 years later, on current trends.

The end of the superpower’s reign, the end of the white man’s rule, or, as the Australian National University’s Hugh White put it: “China’s rise may prove to be the most consequential change in Australia’s strategic circumstances since European settlement over 230 years ago.

“It may, indeed, mark the final close of the era of Western primacy in Asia that began with Vasco da Gama,” 500 years ago, “leaving Australia and New Zealand as its relics.”

And he may well be right. But America’s relative decline against a rising China is always measured one-on-one.

The US is not only a country. It’s part of an ecosystem of alliances. So while the US alone accounts for a vast 41 per cent of all global military spending, together with its allies this rises to an astonishing 71 per cent, according to Dinah Walker, an analyst at the Council on Foreign Relations in the US.

China’s military spending, though it’s been growing at a rapid clip, is still only 8 per cent of the global total. And what about when we include China’s alliances?

Here’s the rub. China has no formal military alliances, as we understand them. It does have allies, nonetheless. Until about a year ago, it could reasonably count four. North Korea, Burma, Pakistan and Zimbabwe.

But Burma, or Myanmar as it’s now known, broke with China when it decided to leave the dictator’s club and pursue political liberalisation. Japan is now its biggest aid donor and Barack Obama is to visit next week.

That leaves North Korea, Pakistan and Zimbabwe. Zimbabwe is useless in any military sense outside Africa. The other two could be important in particular contingencies. Both are nuclear armed, like China itself.

But North Korea’s main value is as a buffer to keep the American ally South Korea at a distance. Otherwise the paranoid recluses of Pyongyang are more a liability than an asset.

And Pakistan is only truly useful to China in the event of a clash with India. Pakistan counts itself an ally of America’s too, up to a point.

This leaves Beijing with a ragtag bunch of allies confronting a dominant US alliance system that includes all the major powers of Europe in the form of NATO, and the greatest Asian power other than China itself, Japan. Plus, in Asia, its alliance network includes South Korea, Australia, Thailand, Singapore and the Philippines.

“It’s the scale of the US relationships that really freaks China out,” says the director of the Centre for China in the World at the ANU, Geremie Barme. “China is surrounded by people who hate it – it’s just the geopolitical reality.”

But while the scale and depth of the US alliance network is perhaps America’s greatest strategic asset, it’s also a degrading advantage. Because all the major US allies, like the US itself, are cutting their defence budgets.

Walker makes this key point. “The United States’s and its allies’ share of world military spending fell from 2005 to 2010. It is projected to fall further, to 64 per cent by 2015, even if US spending as a share of GDP holds up at today’s levels. Budgetary pressures in Europe may mean this share falls even more rapidly.”

In Europe, beset by debt crises, the main NATO powers have cut defence budgets well below 2 per cent of GDP. In Asia, the two most powerful US military allies, Tokyo and Seoul, also recovering from economic difficulty, are cutting their defence outlays too.

And at the centre of this global alliance system, Washington, defence spending is being seriously retrenched too. Walker again: “President Obama’s budget proposes cutting security spending to 3.7 per cent of GDP in 2018. This would match the 2000 level and represent the lowest allocation of GDP to defence spending in the post-World War II era.”

So the US-based alliance structure would still be mighty and still dominate world military outlays, but it is on a shrinking trajectory.

China, in the meantime, is expanding its spending, its arms and its ambitions.

China increased its defence budget faster than any nation in Asia over the past decade. Its military outlays grew at an 11-year compounded annual growth rate of 13.4 per cent, according to a CSIS study. At this rate, it quadruples in a dozen years.

And Australia? Although it’s the only developed nation on earth that has not suffered a recession in 20 years, although, as Wayne Swan likes to repeat, its economy is “the envy of the world,” Australia has cut its defence effort as a share of GDP to 1.56 per cent, its smallest since 1938 on the cusp of World War II.

Despite a charm offensive in the late 1990s and into the 2000s, China isn’t going out of its way to win friends in its neighbourhood any longer. From 2010, it took a sharply more assertive turn. As Beijing’s foreign minister, Yang Jiechi, helpfully pointed out to a meeting of regional foreign ministers that year: “China is a big country and other countries are small countries and that is just a fact.”

It was in that year that Chinese officials first described the South China Sea, where it has overlapping territorial claims with half a dozen nations, as a “core interest”. So what? This is freighted with significance because it’s the same rhetorical category that China reserves for Taiwan and Tibet, the territories where it has unfailingly promised to use force against any challenge to its sovereign claims.

China has big plans, as the outgoing president, Hu Jintao, cited in his work report to the National People’s Congress this week: “We should enhance our capacity for exploiting marine resources, resolutely safeguard China’s maritime rights and interests, and build China into a maritime power.”

This sends a shiver through regional capitals. Although Hu also reiterated China’s commitment to “firmly pursue an independent foreign policy of peace,” this rings hollow with China’s neighbours who have felt the sharp edges of Beijing’s maritime power in recent months.

The clearest sign yet that China has shifted from being a status quo power to a recidivist one was its unilateral move in July to place a garrison of the People’s Liberation Army on the Paracel Islands in the South China Sea, which are also claimed by Vietnam.

Why is it so important for China to expand its maritime domain, even at the risk of conflict with its neighbours? Robert Kaplan, an American writer for The Atlantic and Stratfor, this week made the point to the Lowy Institute by way of analogy: “Why did the US become a great power? Because it dominated the greater Caribbean Basin,” displacing the great European powers in the 19th century. “By coming to dominate the Western hemisphere, that gave it the space to compete in the Eastern hemisphere.

“China sees the South China Sea as its Caribbean, the sea it needs to dominate to become a great Eurasian power, not just an Asian power.”

China’s new assertiveness disturbed the Obama administration, alarmed other Asian governments and energised what has become known as Obama’s “Asian pivot”.

This is a signature policy of the Obama years, declaring a shift of attention and resources from America’s long-running emphasis on the Middle East towards the Asia-Pacific. Its most concrete manifestation so far is the permanent rotating deployment of US Marines in Darwin announced last November.

And Beijing is not happy. Mike Green, an Asia expert at the Centre for Strategic and International Studies in Washington and former top Asia official in George W. Bush’s White House, emerged from two days of intensive discussion with senior Chinese foreign policy intellectuals this week to observe: “China’s view is that the US is trying to block its rise. They are highly critical of the ‘pivot’ – in their view the US is opportunistically using China’s disputes with Japan or the Philippines or Vietnam to cement its position at China’s expense.

“This narrative is very, very strong in China. Their view is that all of Asia will ultimately be drawn into China’s orbit, and resistance is futile, and that’s making them more willing to use coercive measures.”

The trick, says Green, is to “buck up the alliances in the Asia-Pacific, without provoking the Chinese even more”.

This is precisely what the Obama administration would like to achieve, and it’s the overarching mission of the Secretary of State, Hillary Clinton, and Secretary of Defence, Leon Panetta, when they visit Perth next week for the US’s annual cabinet-level consultation with its antipodean ally.

As Clinton’s lead Asia official, Kurt Campbell, told Fairfax Media in an interview this week: “We’ve made clear repeatedly and consistently our strong desire to see the relationship between Australia and China continue and grow in a positive way.

“We welcome that, we support that, we encourage that. And we welcome insights from Australia in terms of how the US can be more effectively engaged with our friends in Beijing. So the China dimension is increasingly important. I believe our interactions in this area will only grow in the future.” And Campbell urges “cooler heads to prevail” in China’s territorial clashes with its neighbours.

Yet at the same time that the US and its allies seek to fully engage with China, Washington wants to hedge against a possible future of increasing Chinese aggression.

That’s why Clinton and Panetta will ask Australia not to take advantage of the Marine deployment to cut Australia’s defence spending to a historic low, but to do what it can to contribute to keeping the US alliance structure as strong as possible.

Julia Gillard likes to lavish Barack Obama with praise. He quite enjoys that. But he’d sooner see her put her money where her mouth is.

Peter Hartcher

Shift at the top in rising China

The top leadership in China changes every 10 years and the 18th congress of the Communist Party of China, which has ruled that one-party state uninterruptedly since 1949, commenced on Thursday to anoint the new general secretary, or party chief, and name the standing committee of the politburo that will assist him. This will happen over a period of seven days.

The leadership change matters because of the rapid rise of China’s economic and military power, deepening the scope for its intervention on the world stage. China has moved up from being the sixth-largest economy in the world to the second position in the last 10 years, and may overtake the US by 2025.

That signifies a consequent escalation of its military might, which can be used to influence relations with neighbours as well as the US-led Western bloc.

This cannot but have consequences for geopolitics and geo-economics. China’s vice-president Xi Jinping, as per established norms, is scheduled to take over as general secretary at the party congress.

By March 2013, he is expected to succeed Hu Jintao as President, and the following year take charge as the head of the Central Military Commission.

The combination of these three positions makes the Chinese leader the most powerful entity in China and possibly the world, next only to the American Pre­sident.

However, unlike in the era of Mao Zedong and Deng Xiaoping, the ge­ne­ral secretary cannot go solo and has to seek consensus in the highest party councils.

Along with China’s rising stature, its party congresses have begun to attract greater world attention because the Chinese state remains opaque, with many viewing it as a “police state”. Its inner workings are obscure while its actions reverberate both regionally and internationally.

Mr Xi’s presumed proximity to the Chinese armed forces can feed Chinese nationalist postures and territorial claims in the East China Sea and the South China Sea, worrying Japan, Vietnam and the Philippines specifically.

This should also test the sturdiness of America’s “Asia pivot”, announced by President Obama. There is so far little hint of any changes in the new Chinese leader’s attitude towards India or Tibet, with which Beijing’s India policy can get linked.

Despite China’s economic and military robustness, the country is mired in corruption, and scandals have touched the politburo level.

The address to the congress of outgoing leader Hu, was peppered with references to corruption, which he linked to rising tensions within the country that could hit stability.

Curbing these may be the incoming Mr Xi’s first task, besides pushing market-oriented economic growth.

Deccan Chronicle

What Hu Jintao Leaves Behind

Now that the U.S. presidential election has concluded, the world’s attention is turning to China. November 8 marked the opening of the 18th Party Congress, China’s version of a political convention at which all the top Communist Party leaders will be announced. While we won’t be treated to the sight of hundreds of millions of Chinese turning out at their local schools and senior citizen centers to vote—although the American Embassy in Beijing did host an invitation-only mock U.S. election for Chinese citizens—the suspense is almost as great. True, we already know that Xi Jinping will be the next president and Li Keqiang the next Premier, but we don’t know who will occupy the other five to seven seats within the top-level Standing Committee of the Politburo. For that, we will have to wait. The Communist Party is savvy enough to know that once the leadership lineup is revealed, no one will pay much attention to the rest of the week-long Congress. No matter what Xinhua says, the world is not waiting for an elucidation of the country’s cultural policies.

While we sit and wait, I thought it might be interesting to think not only about the future but also a bit about the past—namely what is President Hu Jintao leaving behind for President-elect Xi Jinping. Not surprisingly, Hu’s legacy is mixed, captured best perhaps by the Chinese word weiji—which combines the characters for both danger and opportunity. Navigating a path forward will require that Xi address at least the following “dangers” and “opportunities.”

The Not-So-Great Communicator: One of the most distinguishing features of Hu Jintao’s presidency was his almost complete lack of presence. Hu avoided the press and sent Premier Wen Jiabao to manage any crisis that required a personal touch. (Wen earned the affectionate moniker “Grandpa Wen” because of his responses to the people’s suffering during earthquakes, floods, and health crises.) Even Hu’s political slogans failed to excite: Who in or outside China understands “scientific development” or believes China is a “harmonious society” in the midst of a “peaceful rise.” The bar couldn’t be lower for Xi to assume the mantle of the Great Communicator.

Trains, planes, and automobiles: If Hu’s interpersonal skills left something to be desired, he nonetheless  presided over one of history’s great economic transformations.  During his tenure, per capita GDP in China jumped from roughly $1200 to $5400; per capita car ownership increased from 15 per 1000 people to around 80 per 1000 people in 2011; China now boasts the largest high speed rail and expressway systems in the world; and the country has transformed from serving as one of the world’s largest recipients of World Bank loans to loaning more money to the rest of the world than anyone else, the World Bank included. On the face of it, Xi Jinping could not have asked for a better legacy…or could he?

A Chinese people on the move: The Chinese people can’t vote at the ballot box, but they do vote with their feet. The wealthiest flee the country. During Hu’s tenure, fully 27 percent of Chinese with at least $15 million in assets have emigrated and another 47 percent are considering it. They cite the quality of the educational system, the environment, health care, food safety and protection of assets as the drivers behind their desire to leave. The poorest Chinese, citing the same exact challenges, take to the streets to protest; and those protests now total more than 180,000 annually. Maslow’s hierarchy of needs has officially arrived in China.

A mandate for reform: The stasis in political and economic reform achieved during ten years of Hu-Wen rule, would seemingly be a boon to Xi: after all anything he does will be better than the nothing that was. Unfortunately for Xi, the Chinese people already appear to have an idea of what they want. A Global Times survey released just in time for the Party Congress reveals that 80 percent of Chinese advocates political reform; and more than 70 percent says Beijing needs to tackle healthcare, pensions, and social security in the next five years. What do people want most from political reform? According to the survey, they want more power to oversee the government for themselves and for the media. Nothing in Xi’s background suggests that this would be his top reform priority, but unless he wants to preside over more social unrest, more capital flight, and more brain drain, he might want to listen.

Backyard bully: One of the great surprises in recent years has been the unraveling of Chinese foreign policy. After more than a decade of earning kudos for a relatively sophisticated and nuanced approach to the rest of the world, China has become the backyard bully of the Asia-Pacific. It is a problem largely of China’s own making, and includes: serious, occasionally violent, conflicts with the Philippines, Vietnam, and Japan; disaffection in Canberra and Singapore; and a new degree of unpredictability in relations with previously stalwart supporters Burma/Myanmar and North Korea. Dialing all this back won’t be easy, particularly in the context of a newly revitalized U.S. presence in the region. Still, some nice words and a renewed willingness to share might get Beijing an invitation to play again.

In an interview he gave in 2000, Xi Jinping stated, “When you have just taken over a new job you will also want to set your own agenda in the first year. But it must be on the foundations of your predecessor. It is like a relay race. You have to receive the baton properly and then yourself run it to the goal.” The foundations laid by Hu are somewhat shaky, and we don’t know what Xi will see as his goal. But it sounds as though we won’t have long to wait before we know what it is and how he plans to get there.

Elizabeth C. Economy