Thursday, September 17, 2009

Why China Is A Danger To Us. . .

I wrote an article some time ago in which I pointed out that the obsession with China surpassing us economically was all a bunch of paranoid garbage. . . and it is. But that doesn’t mean that we should not be worried about China. Here’s what should concern you. . .

China: The Military Threat

About ten years ago, China came to an interesting realization. It knew it could not compete with the United States military as a world power. But what if it didn’t have to? After much rethinking, China concluded that it didn’t need to compete with the United States militarily as a world power, it only needed a strong enough military to outclass whatever the United States could bring to the region in the event of conflict. In other words, it didn’t need to prepare to fight the United States around the world, it only needed to be strong enough to intimidate the United States into staying out of whatever regional conflicts it chose to start, e.g. Taiwan.

Putting that plan into motion, China began modernizing its military with EU and Russian weapons. In 2002, when I first started paying attention to this issue, China began buying old Russian Kilo-class submarines. Those subs are equipped with long-range, anti-ship missile systems. The Chinese also bought destroyers, anti-aircraft missiles and fighter-bombers from the Russian at the same time. They also began building large numbers of missiles that could reach other countries within the region, and they began doing war games that involved simulating attacks on Taiwan.

According to experts at the National War College, those submarines would “very significantly enhance the Chinese navy's ability to influence events in the East China Sea. First, by enforcing a blockade against Taiwan, if Beijing adopts that course of action, and also by posing a serious problem for opposing naval forces attempting to operate in the area.”

Now Defense Secretary Robert Gates has acknowledged this threat. Said Gates on Wednesday:
“When considering the military-modernization programs of countries like China, we should be concerned less with their potential ability to challenge the US symmetrically -- fighter to fighter or ship to ship -- and more with their ability to disrupt our freedom of movement and narrow our strategic options. Investments in cyber and anti-satellite warfare, anti-air and anti-ship weaponry, and ballistic missiles could threaten America's primary way to project power and help allies in the Pacific -- in particular our forward air bases and carrier strike groups.”
Short of starting an arms race in the region, combating this threat will be extremely difficult, especially with an administration that pays no attention to world affairs. Perhaps discouraging further arms sales and allowing Taiwan to buy more modern American military hardware would be a good start? Of course, that could cause China to stop buying the bonds Obama needs to sell so that he can keep up his deficit spending.

China: The Foreign Policy Threat

At the same time, China has undertaken a much more aggressive approach to foreign policy throughout the rest of the world. Meet the “Bamboo Republic”:

Do you remember the banana republic? “Banana republic” was the term for countries that were essentially ruled by fruit companies. British or American companies would head to places like South America and set up banana and rubber plantations. They would then use their considerable wealth and power to shape/control the local governments to ensure that their investment was protected. The banana republics came to end as result of various means, most often revolution.

Now they are back, and China is the biggest purveyor. At a time when most governments in the world are content to step back and let NGOs -- non-governmental organizations -- address the problems of the Third World, China has stepped into the vacuum. Using hard currency, they have bought up massive amounts of resources in these countries, everything from oil, to minerals, to huge tracks of land. They also bought up the companies that were doing the extracting and they have created companies to manage the land. In this way, they are securing the oil, the copper, the iron ore, and the wheat that they need.

The question that remains unanswered is how this will affect the governments in those countries. Will this predispose them toward a favorable view of China? Will they feel held hostage to China’s demands? Will they become Bamboo Republics? And is this good for these countries, or have they simply traded white colonial masters for Chinese colonial masters? Moreover, how will this affect countries like the United States, as, for example, copper mine after copper mine comes under the influence of the Chinese government?

Like it or not, resources are limited and it’s time to consider the wisdom of letting a government like China monopolize the things upon which modern economies depend.

China And The Coming Oil Shortage Threat

Similar to the Bamboo Republic threat comes a threat of massive disruption to our oil supply. Everyone knows that oil is a commodity, and, thus, it doesn’t matter where you get it, right? Well, no.

In fact, there are different types of oil. Indeed, one of the reasons that Iran is seeking nuclear power even though it is “sitting” on a ton of oil, is that its oil is “sour crude”, meaning it contains a great many impurities -- particularly sulfur. Those impurities need to be removed before the oil can be processed. This makes the oil expensive to use and not well suited to being turned into gasoline (it tends to be used for heating oil or diesel).

A second, more important fact is that oil is not dumped into a market where it can be picked up by anyone like bread from a bin at a grocery store. Oil comes from certain countries and is often designated for specific countries. Indeed, the United States gets most of its oil from Canada, Mexico and Saudi Arabia. But coming in a strong fourth, and providing around 1/6th of the oil supplied to the United States, is Venezuela.

And this rubs Hugo Chavez wrong. Thus, he has stated several times that if he could find other buyers, he would stop selling oil to the United States entirely -- thereby cutting off 1/6 of the oil supply to the United States. The reason he hasn’t been able to find too many buyers is that Venezuela also sits on sour crude, which not everyone can refine. Last week, China signed a deal with Venezuela to start developing oil fields in Venezuela.

This remains speculation at this point, but it will not likely take long after China develops the infrastructure needed to process and transport oil from Venezuela to China, before Chavez starts selling all of his oil to China instead of the United States. Where will the United States suddenly find enough oil to replace 1/6 of its requirement?


The Chinese are not fools, nor are they content with being second class. They have made it clear that they view the world now as bi-polar, with the United States on one end and China on the other, and everyone else nothing more than pawns. We need to make sure that we are not dependent on China in any way, and that China does not find a way to hold us over a barrel. We also need to think about balancing China’s power within its own region by fully supporting our friends, before they stop being our friends and instead fall under the influence of a new Chinese Empire.


LL said...

Very astute observation.

China wants precisely what we want - to be dominant in our hemispheres. China wants to be able to be the Alpha Male in the East and they are working to obtain that capability. Does it mean they intend offensive action against the homeland of the US?
Why not?
For the moment, our nukes are better than theirs.

China wants to catch up with the US in 100 years. That, clearly articulated is what they want. They want technical and material parity in a century.

The US thinks in terms of four year terms. The Chinese are thinking in terms of a century. I've spent time in China. I've spoken with national leadership and this is something they continually say. The man on the street says it too.

Writer X said...

Andrew, are we not dependent upon them already financially, in terms of the bonds we need them to buy? Or, are our economies so intertwined that currently we both need each other?

Very interesting post! Thanks!

AndrewPrice said...

LL, Thanks!

I've heard that a good deal from people who've been over there -- that China wants to be the biggest kid on the block and they are patient enough to take a longer term approach to getting there.

Too many Americans think that China is becoming just like us, but there's no evidence of that.

We really need to do a rethink on our approach to dealing with China. This is a chess game being played out and we need to make sure they can't cut us off from the things we need to stay on top.

If we're not careful, we're going to find ourselves cut off from the things we need and unable to defend our friends.

AndrewPrice said...

Writer X, You're welcome, glad you found it informative.

There is some truth to the idea that intertwined economies "need" each other. BUT that is a sword as well as a shield. If China attacked Taiwan, we could cut off their exports in retaliation, but that would hurt us as much as it would them.

So what it really comes down to is a game of chicken and who is willing to take more pain -- and that's almost always the authoritarian country.

So in the end, that won't stop them from mistreating our friends, but it may stop us from helping our friends -- the Russians just re-taught this lesson to the Germans vis-a-vis Georgia.

In terms of bonds, it would be a problem for current spending if the Chinese suddenly stopped buying bonds -- we would need to cut spending or find other buyers. But the bonds already issued are virtually meaningless. We could simply refuse to pay or we could devalue our currency to make them virtually worthless.

LawHawkSF said...

Andrew: Great analysis. I should also add that my assessment of post-Mao China is that it is no longer the expansionist terror it used to be. That doesn't mean we can relax by any means. But they have a peculiar sense of great power as being defensive rather than offensive. If over that 100 year long view of theirs it becomes apparent that we will compete but not threaten their national pride and safety, the situation might become quite different. Their leadership is still entrenched, but even they don't want a real war, or even a costly cold war like the former Soviet Union. They'll attack ruthlessly if they feel threatened, but that paranoia may disappear with the passage of a generation or two. I'm no Pollyanna, but I don't see them in the same light as, say, North Korea.

My numerous Chinese connections here in San Francisco say the authorities seem more concerned about Chinese-American immigrants who visit the old country with their crazy western ideas than they are about our military or our spies. But at least two generations will have to pass before a clear picture emerges. In my lifetime I have seen China go from a mass-murdering totalitarian state, to an oligarchic dictatorship, to a truly vicious authoritarian state which does allow some very small freedoms. Liberty and democracy are by no means inevitable, but it's progress.

Writer X said...

Devalue our currency? I'm sure that is another topic all together but that is a very troubling thought.

AndrewPrice said...

Lawhawk, I'm not sure they don't have territorial aims, though I don't see them interested in an outright war with us. They are certainly fixating on bringing Taiwan into Greater China. And they clearly intend to keep places like Tibet. I suspect they wouldn't mind dominating the surrounding countries -- though probably not anything outright like the Warsaw Pact.

I also their efforts in Africa and South America aimed at creating vassal states.

On individuals, what really creeps me out is when I hear people like Jackie Chan (a very westernized, intelligent man) speak in a straight face about the Chinese system being "better" because it is "better" to let the government make most decisions for you. I had hoped that kind of thinking was over, but it still seems pretty ensconsed.

AndrewPrice said...

Writer X, Our currency has been slowly devaluing for some time. It's the inevitable consequence of trade imbalances and deficit spending. Though it can be sped up or slowed by increasing/ restricting the money supply.

Like all things economic, there are winners and losers. Our exports would surge, imports would become very expensive and consumers would suffer. The Nordic countries have been doing it for years to keep their (pretend) "miracle" alive. Italy and Spain used to do it just to stay afloat -- the Euro ended that.

A better plan, in the event of serious conflict, would simply be refuse to pay bonds issued to China -- like we've frozen Iran's assets. In any event, the real danger, as I said, is that our policy makers won't act according to our interests for fear that they could no longer get their hands on Chinese money.

patti said...

the facts of this post have been keeping me up nights. the times are turning, and the danger isn't as far off as we used to like to think.

LawHawkSF said...

Andrew: Tibet was an ancient grudge carried out to fruition by Mao in 1950. Taiwan is not a conquest of foreign territory in their eyes, it's a rogue state to be brought back into mother China. I don't agree, of course, but it's not like the Soviet Union believing foreign territory like East Germany should submit to Moscow's rule. Their other forays were either during the Maoist period or shortly thereafter. The Soviet Union wanted satellite states ready to join the world communist super-nation. China wants "client states" to keep America off-balance, as in Africa. China would like to dominate its own region, but more like America's domination of the western hemisphere than like the Soviet Union's absorption of other states into the Soviet state.

I'm not truly disagreeing with you on any of those issues, just seeing subtle differences. China could turn overtly militant again tomorrow, and though I wouldn't predict it, I wouldn't be shocked by it either. It's even more enigmatic at times than what Churchill said about the Soviet Union. As I said, if there's going to be a major change in China, it will probably take two generations to get there.

As for Jackie Chan, he's just carrying Obama's message to the Chinese mainland. What can individuals and free businesses do that government can't do better? I think saying that he has a Chinese attitude is racist. I'm calling Janeane Garofalo and Jimmy Carter right now. LOL

AndrewPrice said...

Patti, It's things like this eventually come to a head some day, unless you work to prevent them. And, sadly, few in Washington have the nerve or desire to prevent them.

Lawhawk, I would not at all discount a militant China in their own neighborhood. I can see them using their military against Taiwan and possibly against North Korean at some point, and to generally terrorize the 'hood.

But beyond that, I agree, they seem more interested in creating "client" states that hoisting the Chinese flag in places like Africa and South America.

On Obama, I'm pretty sure that they aren't any more interested his "message" than we are. I suspect they view him as an unprincipled, weak, clue-less talker that they can role whenever the mood strikes them.

StanH said...

Lets not forget the 1996 campaign where the Clinton Administration allowed Loral Space to sell computer technology that could be used to enhance the guidance systems for China’s ICBMs, …we wouldn’t want them to miss. China has many problems of their own, some of which can only be solved outside their borders. Though in some ways they are quite modern in others outside the cities are quite backwards. We must keep an eye on them, but I believe our symbiotic relationship will keep the peace. We also have a common enemy Islamo-Fascism, if a Muslim goon is caught in China, water-boarding is the least of their worries.

AndrewPrice said...

Stan, The same sorts of things are still going on. In exchange for cheap labor, Airbus has agreed to basically let China steal the technology it needs to star building large-body jets.

I'm not particularly worried about keeping the peace. I don't see a war between us and China. My concern is that we will let them get away with things we shouldn't because either (1) we are short sighted about their goals and plans or (2) we get outselves into a position where we become unwilling to "rock the boat" for fear of the effects on our economy.

In that kind of circumstance, China can basically do whatever it wants.

ArmChairGeneral said...

Very interesting observations Law, Writer and Andrew. I believe that Andrew probably has it correct in that we are most likely not going to have to fight China the way we almost had to fight Russia. It is more plausible that we will be fighting in remote third world countries of their bamboo republic (great word play btw Andrew) trying to support our allies and protect our interests from their government. Of course my immediate concern is protecting our interests and our freedoms from OUR government. But just to be safe I'll keep an eye out to the East.

AndrewPrice said...

Thanks ACG. It will probably come as no surprise that the Chinese have no objected vociferously to Gates' comments. Why am I reminded of "we have no designs on Polish territory."

ArmChairGeneral said...

Do you think the warsaw pack is returning?

AndrewPrice said...

ACG, Now way. The East Europeans will fight that one to the death. Besides, Russian already has the power to push anyone around they want in Europe just by turning off the gas pipes, they don't need to put their own troops in Europe to control anyone.

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