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South China sea security dilemma

Dr. Muhammad Aslam Khan

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World looked forwardpassionately to achieve a long awaited break from the conflicts brewing up in Middle East (ME) as well as in Central Asia. A glimmer of hope kindled after withdrawal of US forces from Iraq,

claiming to have achieved its objectives, and draw down from Afghanistan, already in full swing where NATO operates in unison for over a decade. Strange enough, metaphorically the winding down war intensity appears to have been negatively manipulated by Ares, the god of violence, to hype quietly the hostilities or the threat of them in a new theatre, called South China Sea (SCS). Rhetoric rumbles wide and far that the storm is building up.

Perception Variants

Some scholars appear determined to prove that talk of impending conflict in Asia-Pacific region amounts to expecting tempest in a tea-cup. Despite hostile gestures, other analysts tend to connect huge economic stakes and finding them significant, they rule out conflict. Sterling (2012) thinks, ‘According to a Japanese business group, 30,000 firms operate in China. Japan has investments there of $85 billion….For their part, the Japanese don’t want to jeopardise access to a market of 1.3 billion people.’ The optimism soon vanishes, however, once some warships and submarines pop up from the ‘tea-cup’ and are observed conspicuously indulging in hostile manoeuvres. Ungar (2012) remarked about the ensuing tension, ‘The Philippines and Vietnam have already protested the Chinese action, but the Chinese Global Times responded that China will not back down on sovereignty issues….’

Ongoing territorial tiff is likely to suck in militarily not only SCS peripheral countries like China, Taiwan, Vietnam, Philippines, Singapore, Indonesia, Brunei, Thailand and Malaysia but also some distant powers like India, Japan, and Australia. US gets soon bracketed by implications because of security-guarantee obligations, it owes to Japan and Philippines, besides being recognised as a lead power to keep the Asian allies’ mercury down. Even Australia and Canada, its traditional allies are cautious to encourage or pursue a posture that would stoke diplomatic tension.  Manicom (2012) comments, ‘Ottawa has made no secret of its preference to focus this engagement (with China) on economic issues as part of a strategy to diversify away from US markets.’ Perceiving these comments within the alliance, apparent ambivalence about SCS paradox by the parties ought to be seen as profuse pragmatism.

Conflict Feasibility and Limitation

Under the environments of globalised politics, the conflicts have the tragic character to expand, particularly when more than one direct party in the arena happen to be the powerful titans with heavy stakes. The chemistry of recent conflicts testifies at least two hypotheses.

First, given the prowess, it has become far more feasible to initiate a conflict by the powers, which enjoy global military reach, albeit at an exorbitant cost in men and material. In classical sense, no other power has demonstrated such versatility except NATO and recently France in Mali to sustain trans-continental operations of war. Chinese strategic reach within the sphere of South and ECS is a reality now that littoral states would find hard to rebuff. Rudd (2012) is of the view, ‘Chinese strategic capabilities, the force structure of its military together with its emerging doctrine are aimed at supporting China’s core interests….’

Second, conflicts are becoming increasingly difficult to wrap up because of the ability of lesser powers to outsource a conflict with minimal costs but stupendous gains to keep the adversaries embroiled in a conflict, no matter how potent militarily they may be. What also lacks in the entire appreciation of the SCS crumbling security paradigm is that Chinese views and diplomacy, even if not apparently palatable, are finding scant elaboration. There is a contextual need to prefer exploratory research over descriptive one. The desirability cannot be over-emphasised even if the study culminates ultimately as a balanced combination of co-relational, descriptive and exploratory modes that tend to overlap because the tangible determinants in this narrative do not predominate. Therefore critical inquiry would enable us to raise and answer some pertinent questions.

Geography and Disputes

Geological and geopolitical contours of the arena are somewhat intricate. SCS lies to the

south of China and Taiwan, west of Philippines, northwest of Sabah/Sarawak (Malaysia) and Brunei, north of Indonesia, northeast of Malay Peninsula (Malaysia) and Singapore and east of Vietnam. It has about 250 small islands. Dramatic irony plays at the peak when all the coastal states of SCS appear determined to claim respective sovereignty and get increasingly bitter when any of them is denied approach to any feature by the other party. As a consequence there are multi-layered disputes. However, China claims the entire SCS space through famous (others possibly view it as mischievous) nine-dotted line. It appears like a loft of rope by a cowboy from Chinese coast that almost hugs the entire SCS coast.

Vectoring Security through Economic and Geopolitical Significance

Until recently it received scant attention and the SCS littorals security woes were labelled perhaps as their self-created tomfoolery. However, dawn of third millennium brought SCS into spotlight. According to initial assessment, SCS region has 8 billion barrels of proven oil reserves with 28 billion barrel of possible reserves. As regards natural gas, it has 266 trillion cubic feet. The emergence of another ‘Middle East’ in Asia-Pacific is certainly a bonanza, not only SCS countries would crave for but the entire world because the promise of alternative fuels still remains elusive. Rather lavish territorial claims in SCS by China to secure future oil giants, under the obtaining scenario means a very complex tangle in the region and beyond, particularly when each actor would be weighing options and attempting to assess others’ degree of finesse in the realm of diplomacy.

Another factor that has bolstered the strategic significance of SCS is the enormous volume of cargo that moves through it. Year 2008 statistics show that 58 percent of the world total shipping, worth $ 435 billion went through Malacca and other straits, destined for or emanating from Asia-Pacific region (Oegroseno 2012).  Recently, fast emerging vulnerability of the sea lanes, particularly in the vicinity of choke points where maritime security environments have deteriorated tremendously, has lent SCS an added dimension. Lyzhenkov (2012, p. 4), taking stock of transnational threats did not miss to underscore the need to, ‘enhancing containers security/supply chain security’. On the contrary, impending conflicts or threat of them would deliver a severe blow to operability through the vulnerable sea lanes when hostile state(s) would attempt to interdict energy supplies. SCS makes a critical area of international concern.

SCS Conflict Dynamics

Diplomacy and Posturing Antagonism

A cobweb of conflicting dynamics haunts SCS theatre. Conduct of diplomacy by the states that are party to the dispute and others who legitimise their role under available version of International Law, suggest that all analyses have to conform to different bench marks. An impression that SCS conundrum is being efficiently fed by proxies, paradoxes and profuse pragmatism simultaneously is quite relevant. The explicit stance of every actor has conciliatory tones but some policy manoeuvres made by them appear confrontational. Similarly the bracketing of US, Japan, Australia and India, in sympathy with SCS littorals’ antagonism against China tends to fall apart when the huge stakes of these major powers are seen interdependent as long as all remain focused on the priority objectives of boosting and sustaining their economic potentials and in the process fostering the world peace. Paal (2012) thinks, ‘Strategic objective of United States in Asia is to manage China’s rise.’ Here the clarity of emphasis resides in ‘management’ and not confrontation or tit-for-tat sparring. US contemplated shift to place strategic pivot in Asia-Pacific must have come as a knee-jerk decision for the Chinese, alerting them to draw some obvious deductions, not in sync with their national interests. It was ostensibly flung like a bolt in the international arena. Not denying US, its prerogative to adjust the forces’ strategic posture, had the declaration been preceded by consultations with the main stake holders, it would have generated lesser controversy than it did, particularly when their economies are extensively developed and mutually engaging.

US plan to deploy a sizeable Marines force in Australia, though at considerable distance from China and pushing 60 percent warships into SCS by 2020 would logically force Chinese to assume that the stage is being set to replay World War II Pacific Campaign in reverse order. Matloff (1973, p. 506) noted, ‘By mid 1943…. Major Allied objective was the control of South China Sea and a foothold on the coast of China so as to sever Japanese lines of communications southward and to establish bases from which Japan could…, if necessary, invaded.’ Chinese fear would have touched sky when the emerging pattern of US rebalancing of Asia-Pacific ‘Pivot’ unilaterally is transposed in 21st century, requiring China to substitute Japan. Conversely if there are really no hidden barbs as both need to reassure each other, the two powers can pull on amicably disregard to the fact that Chinese ships and submarines swarm around US West Coast or the US Marines are cruising in SCS with full array of deadly war arsenals. To achieve such a symbiotic equation which is so vital for the fast fragmenting world, some snares would naturally test the diplomats’ wizardry from both sides.

Alliances and Alignments versus Regional Security Sensibilities

Search for new alliances and cooperating partners with compatible geopolitical synergy is an ongoing phenomenon of military history. However, certain moves make others scary and lead to polarisation. Chinese suspicion stands strengthened when US, through strategic alliance with India, is found inclined to inspire it for embracing bigger role in Asia-Pacific maritime security. November 2012 dialogues between US, Japan and India, observed Indian ‘Daily News’, prove that it is not only the forum to address peace time issues but, ‘…leveraging their strengths to shape the Asia-Pacific architecture’, adding further, ‘India sought clarifications from the US about its so called Asia-Pivot Strategy which envisages roping in New Delhi as the lynchpin of security in the region’. Embracing Asia-Pacific role would sound as Indian prerogative; being a potent emerging power in Indian Ocean. However, India might find it hard to encounter China in Pacific even if its military capability is bolstered by US because of Chinese projected forces preponderance and superior strategic orientation in SCS. However, there are vast areas of convergence among US and India. Hence, India has emerged as US’s natural ally. Blumenthal (2007, p. 308) opines, ‘The United States thus has a fundamental interest in assisting India’s rise as a prosperous democracy that contributes to international security. More immediately United States would like to see India play the role of counterweight on China’s western flank (with Japan doing the same in the east).’ The emerging scenario would certainly be perceived by Chinese strategic defence-wizards as pincer in the offing in Asia-Pacific region to clinch China. Some experts are also sceptical about India’s role in Asia-Pacific, fearing that US efforts to march India against China may be a matter of serious conjecture as Indians are known to pursue independent approach to the global issues. Sibal (2012) is of the view, ‘Being a pro-American is not a stigma any longer whether in politics or business… though not at the cost of becoming subservient….’ China has, however, possibly measured the depth of Indo-US strategic alliance and has not felt jittery about it, leaving window of reconciliation open with India for resolution of its border disputes.

Sino, Japan and Vietnam’s Threat Orientation

China and Japan are at odds historically and old wounds among them appear too deep to heel. Though there have been confrontations recently among them, Japan perceives Chinese force projections worrisome but manageable. Holms (2012) asserts that China would employ ‘rope-a-dope strategy’ or ‘shadow boxing’ with fellow Asian powers in the event of crises in Asia-Pacific region and not meet adversaries in direct fleet-to-fleet engagements. Quoting Admiral Yoji Koda, he observed, ‘Chinese leadership can keep the enforcement ships on station near to Senkaku/Diaoyu Island, send PLA Navy task force through…as matter of routine and otherwise overtax finite Japanese leadership and electorate overtime. Ultimately Tokyo may throw in the towel ….’ Conversely Japan seems aware that option of peaceful settlement of dispute would only sell better at an opportune moment on the dialogue table if Japan manages to convince China that East or SCS space would never be exclusive to her but rather inclusive to some or all the littorals. Augmenting Philippines high sea capability by providing her fast manoeuvring gun- boats and scrambling fighter jet recently after an alleged threat of violation by Chinese air craft, were possibly the acts well considered not only by Japan but its allies as well.

The conflict vulnerability in SCS and ECS between China and others vary from low to high probability. Some analysts (Ciorciari & Chen 2012, p. 62) maintain, ‘The Sino-Vietnamese feud is part of a tangled web of competing claims to the Paracel and Spratly chains and the surrounding South China Sea.’ Vietnam is likely to meet incessant Chinese naval provocations at forward foot, assuming that China’s loss of face among international community would be greater after attacking a small neighbour’s navy and China has essentially bigger stakes for sustaining peace as economies are always conflict-shy. China, considering Vietnam’s mischief unbearable may be inclined to drub its navy in short and intense engagements, hoping it would be a well defined deterrent for others. China and Vietnam navies appear to have toyed with access-denial strategy recently as a defensive manoeuvre that leads us to believe that both are maintaining naval alert unobtrusively.

 

China’s Blues and Opposing Manoeuvres

China does not omit noticing US encouraging gestures to Vietnam when, ‘Defence Secretary Leon Panetta visited a deep-water Vietnamese port near the contested South China Sea…, calling access to such harbours critical as the US shifts 60 percent of its warships to the Asia-Pacific by 2020 (Alexander 2012).’ Their protests are also the index of intense feelings raging through Chinese leadership and public alike when US is seen equipping Taiwan’s military with sophisticated weapons. China perceives Taiwan as an integral part of mainland China. Hence US role amounts to encourage Taiwan to shun Chinese overtures of re-unification and prime it as one of the link in, as some call it ‘string of pearls’ or ‘pearls’ necklace’ to consummate a sort of perfect siege around China. However, China is also carving elaborate pearl-nodes to ensure adversaries’ access-denial and exhaust them way short of their objectives in South and ECS. Chinese forays into Central Asia, South Asia, Middle East, Africa and Latin America; mainly to enhance its energy security is met with suspicion by US and her allies as their energy security stands vitally threatened by implications. Almost in parallel context, an observer had raised a question way back, asking, even if the stage setting of transition of hegemony from Anglo-Saxon-centric to Sino-centric world is accepted, remains a lot between the cup and the lips. Will the transition be peaceful or the two sides would end up locked in oil resources war as and when race for oil degenerates to oil stampede (Khan 2008, p.156)?

If China is accused of consuming all its markers, demarcating its possession through entire length and breadth of SCS, still the onus of responsibility to avert rather than initiate a conflict in SCS lies on US because the world hinges hope on US to undertake ‘fire-fight’ anywhere on the planet. Its suspicions that within a few decades, US may be challenged militarily by China are also well within US prerogative to hypothesise. However, US should evolve and attempt strategies away from use of force, preventing triggering of widespread conflagration, spinning out of control. In other words, as a RAND Review (Dobbins & Cliff 2012) suggests, US be well advised to meet such aims by creating a spectre of, ‘Mutual Assured Economic Destruction.’ In other words, US compulsion to remain an economic giant would further sharpen but it would deter any power to risk its economic destruction, as the threat of economic fiasco would outweigh the gains of lucrative military strategic objectives. An objective argument hints about US being alive to such an obligation, ‘Given the growing importance of the US-China relationship and Asia-Pacific more generally, to the global economy, the United States has a major interest in preventing anyone of the various disputes in the South China Sea from escalating militarily (Glaser 2012a, p. 1).’

Legal and Professional Dimensions

Forces Projection and Pretexts

Chinese show of force in SCS and harassing others, sometime searching them, has been a sore point. Their decision to establish a full-fledged Sansha Garrison on Paracel Islands in June 2012 means that another red rag has been flaunted to provoke the arena’s fury. Thus Philippines and Vietnam emphatically denounced such move though China perceives act of some countries contracting foreign oil and gas companies to commence oil exploration in SCS as far more serious breach of trust than establishing a garrison with symbolic connotations rather than operational one. An expert thinks, ‘The decision (of establishing Sansha Garrison) fundamentally challenges two key aspects of the conventional wisdom in Washington about China’s South China Sea strategy: that China’s assertive behaviour results from actions taken by the civil and military agencies independently of the central government and that China has been moderating its policies towards the South China Sea since 2009 (Mastro 2012).’

As regards legalities of claims over the SCS territories through historical documents, China is very well equipped with huge stock of evidence to support its plea since Yuan Dynasty period though it has not shown flare for international arbitration except from the Association of South East Asian Nations’ (ASEAN) platform. There is however, a hope for the remaining SCS states to advance their view point and press for territorial waters concessions because all of them have gone through alteration of boundaries and dynasties over the centuries. Having gained independence generally in 20th Century, some UN conventions and International Laws support their plea to the extent of being granted respective EEZs that at the moment are denied by China. When China has not ruled out negotiations, there is a scope of settlement, step by step through multiple approaches.

Responsibility and Policy paradigm

Shifting of US focus from Middle East to Asia-Pacific can be successful and draw no ire from China though the statement appears self-negating within. It would be successful, heralding an era of peace and reconciliation if the emphasis is about the quest for peace by all parties, particularly, China and US when the latter has lien over decision making of Vietnam and Philippines also, being an ally or potential ally. To do that, a paradox has to be eliminated. Glaser (2012b) comments, ‘China’s neighbours seek greater US economic, diplomatic and military involvement in the region as counter balance to Chinese growing power but at the same time every country in the region also desires a close relationship with Beijing.’ In other words, SCS littorals are pursuing double-stream foreign policy. One, to induce US that it should remain available for all out support, even military. Second, keep Chinese connection sacred and close to heart.

US is in better position to encourage them to develop thorough understanding of China and to work towards mutual recognition of merit of grievances and resolving them rather than turning to US for every thorn-prick. Another aspect which SCS countries have to watch against is the rise of nationalist sentiments for resolving the disputes. No wonders, Vietnam and lately, Philippines have managed to mobilize their youths, condemning China and obfuscating their own governance deficits but it has also propped Chinese youths’ frenzy as a repercussion. They openly question Deng Xiaoping’s policy of appeasing SCS neighbours who advised them to maintain sovereignty over SCS but circumvent all disputes for the sake of economic prosperity of China. Rachman (2012) comments favourably about Deng Xiaoping, ‘It was a brilliant strategy which ensured that China…rapid economic growth without significant international opposition.’ Chinese leadership’s aggressive posture in SCS may be, more often, a response to sooth their youths and middle class on finding narrow political space. At the same time China compensates its loss of international image with propriety of tones at diplomatic levels.

‘Go’ and ‘Shi’ Factor

It is a matter of conjecture whether Chinese stratagem has been understood. Lai (2012) emphasises that it would be possible only if US understood Chinese board game ‘Go’, the oldest, yet modern that is reflected in their philosophy. Interestingly Chinese entire range of philosophical twists are still nourished by ‘Go’ that is compatible and having firm roots in centuries old Sun Tzu’s classical ‘Shi’. The discussions in the Western world are predominantly about the narratives that are usually obvious and not on the wrapped philosophy from which the narratives emanate.  Finkelstein (1999, p. 193) comments would give us the glimpse that he claims to have distilled from wide range of sources, ‘If one were to distil all of the statements of China’s national security objectives, both explicit and implicit, that have been publicly declared or adduced over the last few years they could be distilled to three simple words: sovereignty, modernity, and stability.’ From a western scholar’s point of view it sounds as an all encompassing remark but Chinese philosopher would differ about what he has distilled that relates to every aspiring sovereign state confronting challenges and also because it skips the interpretation through ‘Go’ and ‘Shi’ standards in Chinese context.

Chinese way of war and conduct of diplomacy even today is like water, denoting Sun Tzu and Lao Tzu’s ‘Shi’ (Lai 2012). Water ultimately finds a flow-path. Conversely, Western art of war and diplomacy flow from Greek traditions; chivalrous, agile like a boxer and have tendency to match force on force, seeking immediate result on the battlefield, assumed as chessboard, even at enormous cost in men and material.

Western diplomats found during early 70s US-China thaw that when the West spoke of events maturing in months and years, Chinese planned on span of dynasties. In other words, to push negotiations against the tide of time and expecting to pluck the success like a plum from dialogue table is dangerous. During Cold War era, America won over China against Soviet Union with patience and perseverance. What is relevant part of the argument here is to highlight a point that US and its allies may not be finding rhythm with China on the security issue of SCS and getting frustrated with her but for China, SCS may be a board game on which is being played ‘Go’ and ‘Shi’.

Conclusions

SCS security dilemma is not only complex but challenging. US and China emerge after evaluation from all angles of the calculus, the sole powers who would decide the destiny of SCS. However, the constructive role of other SCS border states cannot be relegated to lesser significance. The lesser powers in the region got to muster an increased sense of faith in multilateral dialogue option. Economic inter-dependability is emerging vital ground to shun war and violence as execrable acts. Spread of prosperity through economic interdependence would keep the world hostage to peace. That will remain a welcome proposition.

China, being militarily strong in SCS, draws obvious flak for coercing neighbours through its forward if not aggressive posture, driven by its weakness of domestic politics, an aspect the West does not always take into account. An analyst, who is more familiar with ‘Go’ and ‘Shi’, made very realistic remarks: Over the next decade or so, the Middle Kingdom’s future will hinge on the dynamic between the fear of revolution and the hope for political reform. The threat of revolution from below may push the elite to pursue incremental yet bold political reform. Should reform fail, however, revolt may well be the upshot. And the unfolding drama, wherever it leads, will undoubtedly have profound ramifications far beyond China’s borders (Li 2013, p. 47). Hence Chinese exercise to keep the courtyard in order may be leaning on SCS geopolitics as an instrument of effective appeasement, directed inwardly.

SCS littorals and others with heavy stakes in the arena have to avoid making it the pivot of geopolitics. Choong (2013) quotes a Chinese professor, raising very pertinent questions, ‘If China doesn`t have a Cold War mentality, why does it see the US as the main threat? If the US doesn`t have a Cold War mentality, why does it deploy so many troops in Asia? To obviate unwinding of plethora of irritants, sagacity points to an opportunity for both the arch actors to settle down, talk and build an edifice of peace that embraces South as well as ECS. Therefore, one would hinge huge hope on new leadership of China and the renewed leadership of United States of America to mobilise and commit their energies toward this end. ‘Shi’ and ‘Chess’ compatibility has to be explored as two-way responsibility and there is no other option.

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Dr. Muhammad Aslam Khan is a retired Brig Gen from Pakistan Army, served 32 years. A veteran of ‘1971 Indo-Pak War’ has been instructor in officers’ Pakistan Military Academy, commanded Divisional as well as Corps Artillery. Holds first class Masters degree in International Relations and PhD degree, acquired in 2002-2007 from University of Peshawar, Pakistan. Authored a book, writes frequently in national and international media. Has attended several seminars and conferences within the country and abroad on invitation. Travelled to Switzerland (twice), UK, US, UAE, Kingdom of Saudi Arabia, Germany (twice). Cambodia and Thailand. Email: dr.makni49@yahoo.com

East Asia

How China is helping Iran skirt US sanctions

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Shortly after the Trump administration reimposed sweeping sanctions on Iran, Secretary of State Mike Pompeo said eight countries, most notable China, would be exempted from the draconian sanctions on buying Iranian crude oil.

Shortly after the Trump administration reimposed sweeping sanctions on the Islamic Republic of Iran, Secretary of State Mike Pompeo made an important announcement. It was a calculated move to avoid a major embarrassment. The hawks in the power corridors of Washington had anticipated the backlash of sanctions on US foreign policy with many global powers rebuffing Trump’s foolhardy move.

Pompeo said eight countries would be exempted from the draconian sanctions on buying Iranian crude oil due to special circumstances. The countries included China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey.

Many of these countries had quite clearly indicated that they would not be cutting oil imports from Iran under the US pressure, most importantly China, Turkey, and India – three of Iran’s largest oil customers.

While India has its own strategic interests in maintaining good relations with Tehran, for instance, the Chabahar port project in Sistan-Baluchistan, Turkey’s relations with Washington have hit a new low following sanctions and trade tariffs imposed by the US.

China, which has emerged as a viable counterweight to US hegemony in the world and a protagonist of new international economic policy, has unambiguously reaffirmed its commitment to keep alive the Iran nuclear deal and stand by the Islamic Republic of Iran.

On November 5, when the petroleum-related sanctions came into effect, Chinese foreign ministry said it will continue to “hold a fair, objective and responsible attitude” and “resolutely safeguard its legitimate rights”, while reiterating its opposition to the unilateral US sanctions.

“China feels sorry for the US’ decision and we noticed that the international world as a whole opposes the practice of such unilateral sanctions,” foreign ministry spokesperson Hua Chunying said at a press briefing.

She said Iran has been seriously fulfilling its obligations under the JCPOA and its efforts have been recognized by the International Atomic Energy Agency dozen times. She also affirmed that China will firmly safeguard its lawful rights while continuing to adhere to JCPOA and urged relevant parties to stand on the “right side of history”.

China has maintained that implementing the Iranian nuclear deal is akin to safeguarding the authority of UN Security Council, basic norms of international law, international non-proliferation treaty and peace and stability in the Middle East.

As one of the remaining signatories of the JCPOA, along with European Union countries who are exploring options to circumvent the US sanctions, Beijing wants to keep the deal alive. China, believe experts, is in a better position compared to other Asian countries as it is not subservient to US interests and is already embroiled in a bitter trade war with Washington.

For all parties of the JCPOA, Iranian crude oil is the main commodity of interest, particularly for Beijing. In 2017, one-third of Iran’s oil was supplied to China, which underlines the significance of oil trade between the two countries. China’s commitment to continue importing oil from Iran is very likely to deal a body blow to US ploy of reducing Iranian oil imports to zero and ‘starving’ the Iranian nation.

Hu Xijin, chief editor of the influential Chinese daily Global Times, told Tehran Times that there was no possibility of Washington reducing the Iranian oil exports to zero, “because Washington lacks righteousness to do so, therefore it can’t have the full support of the international community”.

To continue oil trade in different currencies other than dollar, Iran has been in talks with key allies, including China. On September 29, Foreign Minister Javad Zarif said Tehran would circumvent sanctions by conducting trade in all currencies to avoid using the US dollar. “You can use your own currency. Sell stuff in your own currency, buy stuff in the other country’s currency, and at the end of a specific period, balance it out in a non-dollar currency. It’s quite possible and may even be profitable,”

China, which is the largest oil importer in the world with around nine million barrels imports every day, has been making concerted efforts to reshape the global oil market with increased usage of its currency in oil trading. If Chinese currency manages to replace the US dollar, it will be a masterstroke.

US has been rendered friendless and isolated in its quest to tear up the Iran deal and force countries to cut oil imports from Iran. European Union has already refused to back down on the Iran deal, exploring ways to develop payment channels to facilitate payments related to Iran’s exports. The goal, according to a statement issued by EU, “is to protect the freedom of other economic operators to pursue legitimate business with Iran”.

Beijing has expressed its full support to the EU’s proposal to set up a “special payments system” to facilitate trade with Iran and safeguard the Iranian nuclear deal, which experts believe will significantly reduce reliance on the US dollar in the global oil trade. That will be a game-changer.

First published in our partner MNA

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East Asia

The Implication of China’s Diplomacy in APEC and ASEAN

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It is truly unusual that the Chinese President Xi Jinping and its Premier Li Keqiang are visiting the same area during nearly the same time: Xi’s visit to APEC from15th to 21st November and Li’s visit to ASEAN on 15th November. Yet, if we look into China’s foreign policy towards this area over the past years since President Xi took power, it is not difficult to understand both Xi’s and Li’s official visits to the “larger Pacific” and the meaning beyond.

As we know, President Xi has reiterated that the Pacific is large enough for the countries involved to share the prosperity with each other. In order to achieve the inclusive rather than exclusive benefits for all, China’s diplomacy aims to reject any kind of unilateralism, trade protectionism and anti-globalization. Given this, Xi’s at APEC and Li’s at AEASN is defined as a signal of China’s diplomacy to further reform and bold openness.

As a rising great country, China is surely eager to expand its investment and trade with the south Pacific area, and Papua New Guinea (PNG) is the first country visited by Chinese president. What is more, PNG joined the Asian Infrastructure Investment Bank (AIIB) early 2018 and then became the first state of Pacific islands to sign the MoU on “The Belt and Road Initiative” construction. As the theme “Harnessing Inclusive Opportunities, Embracing the Digital Future,” the APEC summit will focus on Regional economic integration, digital economy, connectivity, sustainable and inclusive growth and so forth.

Also during Premier Li’s visit to the ASEAN, he highlighted the necessity of the collaboration and mutual benefit among the countries involved on the 21st China-ASEAN leaders meeting. This is also the 21st ASEAN Plus Three Summit (10+3) and the 13th East Asia Summit (EAS).

Quite understandable, since the 1960s, the center of world economy has shifted from North Atlantic to Asia-Pacific, its dynamic growth in the region create countless jobs and push the development of world economy. This is the reason that Asia-Pacific region has the most trade agreements and the most complicated economic architecture around world. APEC and ASEAN, as two institutions that possess most member states, are the very pillars of the tumbledown regional economic architecture. APEC was launched by Australia and later included 21 member states in the region, amongst are United States, China, Japan, the economic giant three of the world economy. ASEAN is an institution that consist of ten small and middle states. Though they are not strong enough to meet the challenges from the power politics alone, ASEAN is a core force that firmly facilitate the economic integration of the whole region of East Asia and the Pacific. No matter what the way they embrace, they are the de facto basic regionalism of Asia-Pacific. The withdrawing of United States from Trans-Pacific Partnership (TPP) and hard-achieved Regional Comprehensive Economic Partnership (RCEP) once brought the regional economic architecture a fig leave and strengthened the impact of APEC and ASEAN.

As a result, the two visits of Chinese top leaders to the same region at the same time definitely attract worldwide attention, because they not only represent China’s recent diplomatic focus but also mark the fact that Asia-Pacific region has become one of the vital fields where China’s diplomacy will be actively conducting in terms of the Belt and Road Initiative, and carry on the good-neighbor policy. Since China has argued for creating a peaceful development milieu, to enhance economic transformation and upgrading oversea markets and partners in Asia-Pacific region.

Consider these facets, China, as the second largest economy, aims to promote its well-articulated stance on multilateralism and inclusiveness and globalization. As both President Xi and Premier Li have strongly said that China is ready to work with Pacific island countries to endeavor together and sail for a better future for bilateral relations. For the sake of that goal, China always believes that as long as all the countries involved have firm confidence in each other’s development, cooperation and the future of East Asia, and work closely together and forge ahead, all sides would achieve more and reach a higher level in the next 15 years.

For sure, China belongs to the part of a larger Asia-Pacific family, and the Chinese government defines its goal as the shared prosperity of this region. Therefore, China will continue to work hard and constructively to promote the overall development of impoverished but promising Pacific island countries under the Belt and Road Initiative.

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East Asia

An uncertain step in moving China-Japan relations

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Authors: Meshach Ampwera  & Luo Xinghuan

On October 26, Chinese President Xi Jinping met Japanese PM Shinzo Abe and praised that both China and Japan have pledged to strengthen bilateral ties amid continuous efforts made by the two nations. Xi said, “Bilateral relations have returned to the right track and gained positive momentum, which is something the two sides should cherish.” As the two largest economies in Asia, China and Japan are also the vital players in Asian security and the global development.

In addition, since this is the first official visit to China by a Japanese PM in a seven-year “Cold Peace” period, it is widely assumed that Abe’s visit symbolizes the resumption of high-level visits and will be followed by an increasing rapprochement between China and Japan. True, the leaders of the two economic giants witnessed a wide range of agreements, including a 30 billion US dollar worth of currency swap pact, the establishment of a maritime and air liaison mechanism, and enhancing people-to-people exchanges.

Yet, three factors have to be considered seriously in looking into Japanese foreign policy given the current changing geopolitical landscape regionally and globally. First, Japan has still regarded itself as a “defeated” state during the WWII. Since then, Japan’s postwar posture has frequently described as a new pacifism; yet in fact it is considerably more complex. As Henry Kissinger put it: “Japan had acquiesced in the U.S. predominance and followed the strategic landscape and the imperatives of Japan’s survival and long-term success.” This means that the governing elites in Tokyo used to hold the constitution drafted by U.S. occupying authorities with its stringent prohibition on military action, and adapted to their long-term strategic purposes. As a result, Japan was transformed from the pacific aspects of the postwar order (that prohibited military action) into a nation that has focused on other key elements of national strategy, particularly using economic leverage regionally and globally, though not uncontroversial.

Second, in a recently-released paper written by the former US Secretary of Defense Ash Carter, he maintained that “Japan is a close ally of the U.S. and a rising military power, too, because of legal and constitutional changes of great significance championed by Prime Minister Abe.” In practice, the Japanese administration has engineered an expansion to enable its military to operate regionally and even globally in response to the rise of China, violent extremist activity in Asia, and the alleged North Korean belligerence.

Actually in 2013, Japanese Government White Paper revealed a desire to become a “normal country” with an active alliance policy. In a searching for a new role in the Asia-pacific region, Japan aims to act as an “anchor” of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) concluded in 2018 after the withdrawal of the United States. Now it involves 11 countries and representing 13.4% of global GDP ($ 13.5tri.). As the largest economy of the CPTPP, Japan has been active in moving it forward. Early this year when the British government stated it is exploring becoming a member of the CPTPP to stimulate exports after Brexit in 2019, Abe stated that the United Kingdom would be welcomed to join the partnership. It is said that even the U.S. reconsiders possibly rejoining the CPTPP if it were a “substantially new deal” for the United States.

Japan’s ardent involvement into the US-led strategy in Asia has also been endorsed to expand steadily as a normal power regionally and globally. For example, the Asia-Africa Growth Corridor (AAGC) is the result of the joint declaration issued by the India and Japan in 2016. Although it is premised on four pillars of development and cooperation, it is self-evident that the AAGC reflects a growing special “strategic and global partnership between India and Japan” in which both sides have viewed China’s growing, pragmatic and successful presence in Africa as a menace. There is no question that AAGC is a well-crafted vision and agenda of both India and Japan, linking with their own development priorities. But with increasing pressure from Washington and Brussels, Japan and India are in effect driven by the option for the AAGC to rebalance China’s Belt and Road Initiative (BRI).

From the inception of the BRI, they have more than ever before been concerned with being isolated in Africa by Beijing’s initiative. But, as Ampwera Meshach, a researcher at Jilin University put it, “Africa is on the growth trend and offers potential markets and raw materials. For this reason, Africa largely needs pragmatic and scientific, technological and development- oriented initiatives and these are clearly reflected in China’s BRI.” In light of this, the AAGC does neither reflect a novel nor pragmatic approach on how it fits within the African agenda. Instead, AAGC’s foundational pillars seem more inclined to the Western cooperation approaches that have for decades not been translated into development.

Controversially, two days before Abe’s visit to Beijing, Japan had decided to scrap official development assistance (ODA) to China, which is a program where Japan provides aids to developing countries starting back in 1954. Even though some people argue that Japan’s ODA is reasonably cancelled because China’s GDP is even 2.5 times larger than that of Japan, yet, it is necessary for Chinese to be aware of the reality that Japan is a longstanding ally of the United States. As Japan has long been an economic power, its impressive military capabilities would not be confined to a strict policy of territorial defense—no projection of Japanese power or the U.S.-Japan alliance to the region as a whole.

It is during the Abe’s administration which has recognized an environment of growing Chinese assertiveness, violent extremist activity in Asia, and North Korean hostility, and therefore, Japan has eagerly participated in Asian security, including training and exercising with other nations, beyond a purely passive, home-island defense role. This makes it an increasingly important player serving the US strategy in Asia but challenging the rise of China globally.

It is true that Abe tweeted about the trip — while recognizing the challenges in moving bilateral relations forward, he said that he would still work to “push Sino-Japan relations to the next level”. Given the two countries’ economic links, it is only understandable that there is a need for the two sides to come closer. Moreover, Japanese businesses has been an extremely active force behind the government’s shift of attitude on the Belt and Road Initiative (BRI).

Yet, all in all, we should never ignore that Japan’s ambitious foreign policy has gone beyond the economic goal.

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