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4 SINOGRAPH China's new leaders on a
tightrope By Francesco Sisci
This essay written originally for Nomos
& Khaos, now in its eight edition, is the
report published by the Italian Osservatorio
sugli Scenari Strategici e di Sicurezza
(OSSS), which presents developments in the
interdependencies between economics and strategy
on an annual basis.
America bids to
remove Myanmar from China's sphere of influence
and intervenes in the Spratly Islands dispute.
Whilst not totally out of the blue, the
visit to Myanmar by Hillary Clinton, the United
States Secretary of State, in November 2011, came
as a surprise to many Chinese leaders.
Notwithstanding the quasi-democratic election of
Myanmar's new president, Thein
Sein, supported by the
military junta, the country had in fact failed to
make much headway on humanitarian issues.
The dissident Nobel Peace Prize winner
Aung San Suu Kyi was still under house arrest and
a true democratic system, which for 20 years had
been the official reason for American hostility
towards Myanmar, had not yet been implemented. So
why did the United States rush to support a junta
which for decades it had heavily berated?
In 1972, with Richard Nixon's Beijing
visit, the Chinese had had first-hand experience
of such political gyrations. In that period, the
Americans had rehabilitated China in order to
isolate Vietnam and at the same time strike a
formidable blow against the Soviet Union, which
would find itself with one more declared adversary
on its southern border, and, what is more, an
adversary supported by the United States.
Just as in the 1970s when the United
States used China to isolate the USSR, now they
were going to play the Myanmar card in order to
complete the encirclement of China. This was the
logical conclusion that the Chinese leaders came
to in light of their past political experience.
In reality, this paradigm change was not
totally unexpected. At the beginning of his
presidency, in 2009, in his dealings with the
Chinese, Barack Obama had gone out on a limb,
quietly downplaying human rights issues and even
offering to sell them sensitive technology.
In return however he needed gradual, even
minimal, progress on the yuan exchange rate issue.
The Chinese currency was supposed to appreciate in
order to breathe life back into an American
economy beset by woes. In November 2009, during
Obama's visit to Beijing, the American president
failed to obtain anything at all, a fact that cast
him in a very bad light when he returned to
Washington.
This was only the beginning of
the story; the real calamity occurred at the
Copenhagen climate-change conference in December
which was punctuated by a raft of incidents and
gaffes culminating in the Chinese minister, Xie
Zhengua, shouting at Obama. The president did not
react, but from that moment on the all-too-brief
honeymoon between the USA and China, which was
supposed to pave the way for a de facto Group of
Two, could be considered to all intents and
purposes over. The final nail in the coffin was
when the Chinese dissident Liu Xiao-bo was
sentenced to 11 years imprisonment on Christmas
Day 2009.
At the beginning of 2010,
American policy towards China changed tack
radically. The US administration, which for months
had held Google back, now gave it free rein, and
from that time on the issue of Internet freedom
and freedom of information would remain at the
center of attention in the media and was to become
the main bone of contention between the two great
powers.
In the aftermath, Hillary Clinton
rubbed more salt in the wound by stating for the
first time that the issue of the Spratly Islands -
claimed either in toto or partially by China,
Vietnam, the Philippines, Malaysia, Indonesia and
Brunei - was of international importance as it
involved an area of ocean that was crucial for
international trade and through which supplies
transited from and to northern Asian countries
such as Korea and Japan, both of which are United
States' allies. The Americans therefore felt they
were personally involved in the dispute.
In fact, the repercussions of America's
move went even further because every country in
the world was affected, at least potentially. It
was and is in the interest of the European Union
and Japan, Africa and Latin America to be able to
sail through the contested waters, and so at any
time these countries could become active
participants in the dispute. This led China, the
largest of the states claiming sovereignty over
the Islands, to find itself potentially mired in
diplomatic disputes and acute political
disagreement.
In this way, even if the
Taiwan issue had been destined to find a peaceful
and permanent solution, as seemed to be likely
back in 2010, China would be left with another
gaping wound - and one that would be more complex
since the dispute is liable to involve much of the
world.
Actually, the Taiwan issue is much
more circumscribed as it affects only the United
States, long-time allies with the "Kuomintang"
(KMT) nationalists and Japan, playing the role of
"shadow ally" of the secessionist island.
Moreover, both states have been heavily
conditioned in their adoption of tangible measures
by the fact that they have formally long
recognized China's political unity.
So
there are robust constraints on the use to which
the US can put Taiwan against Beijing. The plain
truth is that America cannot openly come out
against the idea that sooner or later the island
will ask to permanently rejoin the motherland.
In the case of the Spratly Islands, the
situation is completely different. Here, there is
a vast geographical area openly under dispute and
involving countries that are much closer to these
islands than continental China. The situation is
exacerbated by the fact that, not only is this
area amongst the most important global trade
routes, it is also infested by pirates.
This situation could rapidly ignite,
placing China in a daunting position. If one of
the countries nearest to the disputed islands -
either Vietnam or the Philippines, both of which
are politically speaking in Washington's sphere of
influence - decided to occupy an island guarded by
the Chinese, China would have no alternative but
to defend itself.
At that point, if China
triumphed, it would clearly demonstrate that it
did indeed constitute a threat and thus, at least
according to a certain line of reasoning, must be
isolated, first politically and then economically.
If it lost, it would show that it was merely a
"paper tiger" that could therefore continue being
provoked in the certainty that the outcome would
be favorable.
Victory or defeat would then
trigger a chain reaction within China that could
radically disrupt the country's political
equilibrium. The political crisis undermining the
Qing dynasty's authority broke out in the same way
with a conflict which, at the time, the emperor
regarded as minor: the "Opium Wars" against the
English.
In fact, the Qing decided that
the threat posed by the English was marginal and
that the real threat came from Russia, which was
allied with the Zungari Mongols. It was therefore
necessary to focus all the country's resources and
attention on the Zungari. Similarly, coming back
to current events, defeat in the Spratlys could
trigger a crisis that might in turn undermine the
stability of the entire Chinese system.
America's political intervention over the
Spratlys has also effectively destroyed the
agreement reached in 1999 by the then Premier Zhu
Rong'i with China's neighbors. China and the ASEAN
countries agreed on that occasion to remove any
bones of contention regarding the islands,
proceeding jointly to develop the maritime area in
question.
Though a vague formula, it was
however grounded on solid elements as China had
recently saved itself and the rest of Asia from
the 1997 - 1998 financial crisis, whose effects
had been worse than a war. In fact, the economic
crisis also overwhelmed the political system in
almost all the countries affected, be they large
or small. At the end of the crisis, both
parliamentary regimes such as Thailand and
military dictatorships such as Indonesia had
collapsed. Even solid democracies such as Japan
and South Korea had been violently shaken by the
events.
Though the crisis did not occur
with America's blessing, neither was it cursed or
condemned by America. It had been triggered by
Wall Street speculation. The United States then
underlined that the Asian economies which were
badly organized and essentially corrupt, had to
make way for healthy market forces.
It was
almost the end of Asia's dreams of growth.
However, at that juncture China had succeeded,
with its combination of economic and
administrative measures, in putting a stop to the
cycle of competitive devaluations which were
ravaging Asia like a tsunami. It had also
maintained its own currency and the Hong Kong
dollar. Hong Kong was returned to China by Great
Britain on 1 July 1997 - pegged to a fixed
exchange rate with the American dollar. In this
situation Chinese leadership was acknowledged by
the other countries in the region which ended up
clustering round Beijing, sharing the fruits of
its resistance to the speculative tsunami.
Compared to 2009, China's situation had
undergone a radical transformation by 2010, though
apparently remaining unchanged in terms of its
economic fundamentals. In fact Beijing kept the
renminbi - dollar exchange rate fixed, stubbornly
refusing to revalue it.
China's decision,
theoretically only directed towards America, which
openly pushed for revaluation, in actual fact also
harmed all the other countries, whether Asian or
not, whose economies were jeopardized by an
exchange rate which was too low.
Specifically, Beijing's exports, which
were favored by the exchange rate, gained a
competitive edge against all the other developing
countries, including China's sensitive neighbors
who were directly involved in the Spratlys
dispute.
The situation proved that when
push comes to shove, China, in reality, is
identical to America, in other words ready to act
in its own interests, and totally oblivious to
other countries' interests. At that point one
might as well continue the usual policy, remaining
faithful to one's oldest ally.
In fact,
this new situation prompted by the renminbi
exchange rate demonstrated just how little chance
there was of benevolence on the part of China in
respect of the disputed islands.
Against
such a backdrop, the incident which occurred in
September 2010 between a Chinese fishing boat and
a Japanese patrol boat became the classic straw
that broke the camel's back: the definitive proof
that China's goal was only to expand its own
power, oblivious to others.
Beijing
steadfastly pressed ahead with export expansion,
in the process harming other countries' exports
and, similarly, it impudently seized control over
areas of sea plied by other countries' vessels,
refusing to recognize their rights. The result was
unanimous convergence on the United States by all
those countries affected. Initially at least,
China did not notice. In a fever of distraction,
hubris and domestic confusion, Beijing continued
to believe that, with regard to this issue, there
was only a two-way debate between itself and
America.
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