August 17, 1999	atimes.com

China Somebody better tell the Chinese STRATFOR's Global Intelligence Update Weekly Analysis August 16, 1999 Summary: Last week saw an intense campaign by China to warn anyone who would listen that it was going to take some sort of military action against Taiwan. We tend to believe them. We do not think that there will be an invasion, but several other military options present themselves. Given the public threats it has made, China must take some action. Beijing's credibility is now on the line. The United States says that it will intervene, while simultaneously claiming that China will not take action. On Saturday, a US State Department official met with the Dalai Lama, China's mortal enemy. The US is now committed to defending Taiwan, having said on record that the Chinese are bluffing and having publicly met with the Dalai Lama in the middle of all of this. China believes that the US is trying to ''Kosovo'' it. Meanwhile, Johnny Chung is saying that the Democrats' Counsel on the Government Reform and Oversight Committee gave him advice on how to take the Fifth Amendment. Things are, as they say, getting interesting. Analysis: China launched an intense and very public campaign last week designed to convince the world in general - and Taiwan and the US in particular - that it intends to take military action against Taiwan in response to its stance on statehood. Newspapers throughout the world were filled with reports of statements made by Chinese diplomats and journalists to the effect that China was committed to taking military action against Taiwan in order to punish it. The Communist Party newspaper in Hong Kong reported, for example, that the ''military situation was a lot more serious than what the outside world was aware of'', and that China had identified 200 military targets on Taiwan. Troops were ostentatiously put on alert. Chinese warnings of inevitable military action against Taiwan were delivered to the US as well. We take these warnings seriously. We are reminded that many years ago, just prior to China's intervention in the Korean War, Chinese diplomats and journalists delivered warnings in several venues about the consequences of UN forces moving close to the Yalu River. Moreover, given the level of public visibility that the Chinese have given to their warning, it will be difficult for China not to act. As we stated last week [ http://www.stratfor.com/services/giu/080999.ASP ], we do not think that an invasion of Taiwan itself is possible at the moment. Therefore the question is, what sort of military options are available to China? One option, already discussed by us [ http://www.stratfor.com/asia/specialreports/special47.htm ] has apparently been floated by Chinese officials: the seizure of two islands, Quemoy and Matsu, that are just off the mainland of China but are controlled by Taiwan. The islands were frequently shelled and threatened during the Cold War. Their seizure would be a high-profile, low-risk operation within the amphibious capabilities of China. A second strategy (or additional dimension to the Quemoy/Matsu move) is the launching of rockets and missiles against Taiwan. Such an attack could consist of anything from a symbolic attack with a small number of missiles against an unpopulated area, to an all-out attack against Taiwan's air and naval forces designed to reduce Taiwan's ability to defend itself against a follow-on amphibious assault. Now, there are two risks to this strategy. The first is in its effectiveness. As the US discovered in Kosovo, there are limits to the effectiveness of air campaigns. To attack and fail is worse then not to attack at all. There is also the risk of Taiwan or US counterstrikes against Chinese installations. If these were effective, the net effect of the campaign on China's strategic position would be disastrous. How confident is China in its aerospace forces? A third option is a campaign against Taiwan's shipping. A full blockade is not possible, but intermittent attacks against merchant vessels (recall the tanker wars in the Persian Gulf) might be possible using missiles, as well as aircraft and submarines to carry out direct attacks and lay mines. The problem with this strategy is that it could strike at the shipping of third powers, such as Europeans. In addition, Taiwan and the US could retaliate by striking at China-bound shipping and mining China's ports. In a geographical sense, China is somewhat more vulnerable in this strategy than Taiwan. We should add here that If the US participated in such a blockade of China, the ability of the Chinese to create problems at the Panama Canal would suddenly become an important variable. Each action has the possibility of a dangerous reaction. China must measure its actions against reactions. Chinese newspapers were full of bravado in the past week. Declaring victory before fighting is dangerous, particularly when China cannot know whether they face Taiwan alone or the United States as well. The US did everything it could last week to convince China that the US was on auto-pilot in its Taiwan policy. If Taiwan were attacked, the US would respond. US naval officers in the region made it clear that they were prepared, in position and capable of dealing with any Chinese threat. At the same time, in a move intended to infuriate China, a US State Department official met with the Dalai Lama of Tibet in New York. Both the Taiwan and US officials stated that it was their view that China would take no action. National Security Council spokesman David Leavy stated, ''It's the United States government's judgment that there aren't any extraordinary developments or signs that there is a mobilization on the PRC's [People's Republic of China's] part.'' The official US view, publicly stated, is that China is bluffing and that its carefully circulated reports of mobilization and inevitable action are untrue. There are three possible explanations for what is going on: 1: US intelligence has information that China not only can't invade Taiwan but that it cannot take any effective military action. Alternatively, the US may be reading China as having the capability but being unwilling to use it. US intelligence may have information that this really is a bluff. 2: The US would welcome Chinese military action as an opportunity for a devastating counterstroke against China. It is engaged in an extensive strategy, going back to the bombing of the Chinese Embassy in Belgrade, designed to provoke China into a rash military move for which the US is poised and ready. 3: There is a massive disconnect between Washington and Beijing concerning the other's concerns, contentions and capabilities. This sort of disconnect has happened numerous times before in US-Chinese relations. It may be happening again. We choose number three. Let's look at the world from China's point of view. US action in Kosovo was a critical breaking point for them. The US had previously worked on a principle established in Haiti and Somalia that it had the right to intervene militarily in sovereign nations on humanitarian grounds. Embedded in that principle was the idea that it would do so with the support of the international community, meaning that there would be essential concurrence or at least a neutral stance by the members of the UN Security Council. In Kosovo, this was not the case. The US intervened in the face of open opposition from two Security Council members, China and Russia. In Kosovo, the US established the new principle that through NATO, it could intervene unilaterally in the internal affairs of a sovereign state and partition the country. Furthermore, should another country, even China, use its facilities to provide support for the targeted country, the US was prepared to take direct military action even against their embassy. This told China two things. First, that the US now regarded itself as an independent arbiter of the fate of nations. Second, that China would not be treated differently in any way from Serbia or Somalia. After Kosovo, China saw itself in the cross-hairs of US policy, for several reasons: 1: China has two regional insurrections of varying levels underway. One is among the Muslim population of Xinjiang province; the other is in Tibet. China sees the US as encouraging these insurrections. Having established the precedent of invading Serbia on behalf of the rights of the Kosovo Albanians, China sees the US as having also, logically, asserted the right to intervene in Tibet and Xinjiang if it chooses. 2: Directly in the wake of the Kosovo crisis, Taiwan broke with 50 years of precedent by declaring itself a separate state. China is convinced that Taiwan would not have done this without tacit US approval. They see the US promise to defend Taiwan after the declaration as proof of this proposition. This follows from the Kosovo doctrine as well: the US has the right to redefine the boundaries of nations for moral or humanitarian reasons. 3: The US harbored the leader of the Falun Gong movement in New York. In Chinese dynastic history, numerous insurrections have originated with apparently apolitical sects generating hostility to the regime. In fact, the Chinese are setting up a campaign against a new group, Xiang Gong, which is said to have 30 million members. The Chinese government does not regard the rise of internal opposition as accidental. 4: China sees the US as taking advantage of China's economic problems. This weekend, China's official People's Daily wrote, ''An appropriate adjustment in the exchange rate may after all be a policy option if imports significantly exceed exports and push up a trade deficit.'' China is still in economic trouble. Regimes cannot afford to appear to be weak, particularly when they are. The issue here is how Beijing appears to the Chinese masses. That means that quiet diplomacy that wouldn't give Beijing a public victory is not going to happen. China sees the US as having put into place policies that, if followed logically, would result in US participation in the fragmentation of China. The one legacy of Mao that all Chinese value is that he eliminated the foreign domination and fragmentation of China that had existed for a century. Deng's promise was that he could retain Chinese sovereignty while easing China back into the international economic system. China is undergoing the great test of Deng's doctrine: can China retain its unity, territorial integrity and sovereignty while in economic decline, or will that decline generate disunity, fragmentation and a loss of sovereignty? The central problem is this. The US did far more than save Kosovo's ethnic Albanians. It redefined the region's geopolitics. This affected not only Serbia, but all countries surrounding Serbia. It drew countries like Bulgaria deep into the US orbit at severe geopolitical cost to the Russians. The intention of Kosovo might have been limited. The outcome of Kosovo was a profound shift in regional alignments. Further, China has come to see US peacekeeping operations as covers for expanding US power. It also sees Kosovo as a blueprint for such operations elsewhere in the world, including China. It sees the bombing of the Chinese Embassy as a clear signal that the US no longer distinguishes China from Haiti, Somalia or Serbia. Whether or not the US intends to expand the Kosovo doctrine to China is immaterial. The Chinese view is that every US move signals that the US has a national interest in influencing human rights issues within China's boundaries. China must assume that the US intends to carry that policy to its logical conclusion. If Taiwan is prepared to assert state sovereignty and the US is prepared to defend that assertion militarily, then the US is now prepared to redraw the map of China as it did the map of Serbia. China cannot permit that. It cannot now invade Taiwan, but it can take other measures. It must do something to retain its credibility. A man in Jiang Zemin's position cannot afford to be made to look ridiculous. Now, there is a complicating issue. Johnny Chung, fund raiser for the Clinton campaign, has just stated that he received advice from the Counsel for the Democratic minority on the Government Reform and Oversight Committee prior to his testimony. The advice was about taking the Fifth Amendment prior to congressional testimony. One does not have to be Woodward and Bernstein to know that something stinks here. Clinton has a major China problem. That problem will drive him to be rigid and inflexible in order to protect himself from the charge of being a pawn of China. Now, what are the military options for the US? The US is far from helpless against China, but there are clear limits to its ability to engage China on its own terrain. China is not Serbia. Its ability to project forces is limited; its ability to operate defensively is not. Moreover, US forces are scattered around the world. They are still carrying out air strikes in Iraq under some policy no-one can quite remember. Aircraft and crews are being overhauled and rested from Kosovo. Korea is perennially unstable. Draw-downs in budgets are showing themselves in countless ways. Neither China nor the US is ready for an extended and indecisive encounter over Taiwan. It is not clear, however, that the Chinese are in a position to avoid some action. It seems to us that Bill Clinton cannot avoid responding. The danger here is not a short series of unimportant counterstrokes, rapidly passing into history. The danger is that both sides will get tangled in an extended, inconclusive and bloody confrontation. We cannot help but think of the air crews patrolling Iraqi airspace this weekend, eight years after Desert Storm. Decoupling from foreign adventures is not the American strong point. Ignoring challenges to national sovereignty is not the Chinese strong point. China thinks the US wants to ''Kosovo'' it, to coin a term. The US knows this is ridiculous. The meeting with the Dalai Lama was a courtesy. The Falun Gong leader's presence in New York was a coincidence. Taiwan never consulted the US on its sovereignty statement. The US has nothing to do with shipping arms into Xinjiang. Bombing the Chinese Embassy was an accident. It has occurred to no-one in Washington to take advantage of China's economic problems. We're convinced. Now, somebody better tell the Chinese. _________________________________ For republication policy contact: STRATFOR, Inc. 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: http://www.stratfor.com/ Email: info@stratfor.com

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