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Europe and China in a Globalized World: The Geopolitical Impacts of Belt and Road

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Donald Trump’s rise to power, his “America first” policy and the announcement by Chinese President Xi Jinping of the Belt and Road Initiative (BRI), designed to revitalize the Silk Road, are the three mile- stones demonstrating a radical shift in globalization.

Our globalized world is in fact going through a decisive moment in its history, something that can be seen in the creation of the cult of personality surrounding the Chinese President, the introduction of China’s Social Credit System (SCS) and, finally, the crisis of confidence that has taken hold among the European Union’s (EU) member states,  resulting in the United Kingdom’s decision to leave the EU (Brexit), among other developments.

G-2, G-Zero and the Multipolar World

By putting in place protectionist measures, the world’s two superpowers, the United States and China, have begun a trade war. The announcement by the US that it would impose tariffs on imports of steel and aluminum, among other goods, has prompted China to impose its own tariffs on more than 100 products from the US. By mid-July 2018, the value of the taxed products traded between China and the United States had reached US$100 billion. According to experts, this will reduce world trade by 0.5% and economic growth in China and the United States by between 0.1% and 0.3% (Le figaro and AFP Agence, 2018).

Caught between these two powers, the European Union is responding in a similar fashion, i.e. by imposing customs duties worth €2.8 billion on certain US products (Reuters, 2018). Less united than ever, the EU must contend with Brexit and its impacts throughout the Union. The dissatisfaction Europe’s citizens feel about the EU’s lack of effectiveness continues to grow. The future of Europe, the European identity and the Union’s role in today’s globalized world are all being called into question.

It seems we are living in a G-Zero world, a world in which no country, region or group is able to play a leading role on the international scene. On the contrary, G-Zero means a “free-for-all” in which multiple political strategies are being implemented. Each country or region is trying to find its own effective solutions to the challenges of globalization, very often putting others at a disadvantage.

Will this G-Zero world ultimately lead to a G-2 world in which all depends on how relations between the United States and China develop? More than ever, the EU must formulate common strategies vis-à-vis the two superpowers. Alternatively, will multipolarity prevail? A multipolarity characterized by peaceful cooperation among countries?

If so, the result could be a world in which the various players take action, certainly in competition with each other, but in a complementary manner. New international regulations and standards would provide a framework for this “cosmopolitical” (Nida-Rümelin, 2017) global govern- ance while avoiding military conflicts. This would be a world in which the EU, above all, could define its geopolitical strategy in a way that prevents it from finding itself at the mercy of China and the United States.

After reviewing the main characteristics of globalization, internationalization, the competition among nation-states and transnational forces (see the following Introduction section), this paper analyzes BRI   as a geopolitical instrument within China’s overall strategy, which is designed to manage developments and exert power (see the section BRI: A “China First” Strategy). It then explores the impacts of BRI and the “China first” strategy on Europe (see the section BRI and the EU: An Opportunity for Europe). Finally, it discusses the importance of bridging differences and cultivating an “identity of the heart” in keeping with the geopolitical vision of Jacques Ancel.

Introduction: Globalization, Deterritorialization and Transnationalization

Geopolitics — the study of territory and power — is at the heart of this paper. Globalization means the cross-border movement of people, goods, services, capital and information. It is not a new phenomenon. What is new is the increased interdependence between nation-states and the impact of various non-governmental actors (e.g. international companies, interest groups, NGOs) at the international level. In addition, there is greater competition between the national forces that arose from the old world order produced by the Treaty of Westphalia and the new trans- national forces resulting from globalization.

Political responses to globalization, i.e. internationalization, have been very varied, sometimes even conflicting. On the one hand, protectionist measures have been put in place, such as customs duties, border controls and, in Europe, a return to the logic of nation-states. On the other, measures promoting economic openness and expansion are being undertaken, from the re-conquest of the old Silk Roads to the harmonization of European trade and defense policies (e.g. the Common Security and Defence Policy, an integral part of the Common Foreign and Security Policy).

The transnational forces resulting from de-territorialization are competing with traditional national forces, especially when it comes to securing natural resources. This is attributed to the Internet and networking; moreover people all around the world have much more knowledge at their disposal, particularly about globalization’s harmful effects. Indeed, there have been losers in addition to winners. Some countries or regions have massive international trade surpluses, while others are experiencing large deficits. In addition, cross-border economic crime, illicit transactions and money laundering are commonplace. There has been an accumulation of wealth in some regions, often controlled by political–economic elites. This injustice is increasingly fueling citizens’ mistrust of the prevailing political classes. This, in turn, is leading to an increase in social conflicts and protest movements, causing the effectiveness of the democratic system to be questioned.

There are shared challenges, however, that unite all the actors involved in this geopolitical issue: international terrorism; the effects of climate change including on food production; competition for natural resources; chronic economic, social and political crises, due, in particular, to the rise of an illegal and opaque global economy; widespread political apathy; and, finally, digitization, which is leading to a radical change in how people work. Current international institutions and organizations no longer offer effective solutions. The old world order, an after-effect of the Second World War, is in decline, while a new world order has yet to take shape.

BRI: A “China First” Strategy

Xi’s announcement in 2013 that China intended to revitalize the ancient Silk Roads marked a turning point in the country’s national policy.

Indeed, this vast project targeting infrastructure and commercial net- works will extend throughout Eurasia, an area of great geopolitical and commercial importance. The project is strengthening the links between China and countries all along the “belt”. It is, in fact, not a single project, since there is no master plan, but is comprised of a multitude of roads, railways and waterways. It includes the Pacific Silk Road, which passes through the Arctic Ocean, and the Digital Silk Road, which covers cyber- space (The Economist, 2018). BRI is also considered “the road of Xi Jinping” which only reinforces the cult of personality surrounding him. BRI focuses on major infrastructure projects (Figure 1). The 2015 action plan presented the Silk Road Economic Belt (SREB) and the Maritime Silk Road Belt (MSR) with a total of six corridors. According to the initiative, roads and sea routes are to connect China to Central Asian countries, Russia and, ultimately, Europe — but especially to Africa, in order  to secure natural resources, particularly oil.  In Eurasia, BRI covers more than 65 countries with a population of more than three billion, in keeping with the leitmotif advanced by the Communist Party of China (CPC) of “developing the region’s wealth and preserving peace, friend- ship, trust and understanding”.

In order to ensure financing for this vast infrastructure project, China has established two institutions that are complementary to, as opposed to competitors of, the International Monetary Fund (IMF), the World Bank (World Bank) and the Asian Development Bank (ADB):

-The Asian Infrastructure Investment Bank (AIIB): The Asian investment bank for infrastructure projects, with 57 member countries (in addition to European countries such as France, Germany, Italy and Luxembourg).

-The Silk Road Fund: A Chinese sovereign fund.

Many political leaders in the countries along this belt are welcoming this vast project with open arms, since it will improve infrastructure, ensure connectivity and, subsequently, promote economic development. However, as with any Chinese investment, compliance with standards and regulations is not a priority for Beijing. The corruption and opacity relating to the investments flowing from China are likely to benefit political elites more than the populations of the respective countries.

Figure 1. Belt and Road Initiative.Source: Société de Stratégie

In addition, dependence on the investment flows generates an imbalance    in China’s favor, preventing recipient countries from maintaining their economic autonomy.

China’s meta-strategy

The driver behind this commercial project is, above all, a new ideology being advanced by the CPC. Indeed, the main purpose of BRI is to secure and control transport routes for natural resources, particularly oil and gas. This basically means the transport routes that connect African resource-producing countries to production sites in China. The most important corridor is the China–Pakistan Economic Corridor (CPEC). This route connects the city of Kashgar in China to the port city of Gwadar in Pakistan and is an integral part of China’s overall strategy. Almost 80% of all Chinese imports of oil pass through the Strait of Malacca (Figure 2). As a result, CPEC will significantly reduce transport time. In addition, it will improve Pakistan’s infrastructure due to the massive Chinese investments it entails. Not only will this help develop Pakistan’s economy, reduce the country’s energy shortages and boost its productivity, it will also increase Pakistan’s dependence on China. At the same time, the infrastructure projects are being financed through concessional and commercial loans, which will fuel the corruption already prevalent in Pakistan (Luchnikava-Schorsch, 2018; Hussain, 2017).

Figure 2. China–Pakistan Economic Corridor (CPEC).Source: South China Morning Post

It is therefore necessary to view BRI not only as an instrument for asserting China’s power but also as a global meta-strategy that proposes an alternative world order, at least at the commercial level, to the liberal order established by the West. It is also why geopolitical, strategic and military aspects should be considered more than economic aspects. New waterways and port construction serve more than just commercial ends. Ports can serve as military bases for the Chinese navy. For example, the People’s Liberation Army (PLA) inaugurated its first overseas maritime naval base in Djibouti in 2017 (Lagneau, 2017). Dispatching 400 troops, the PLA stated that it wants to support  UN  peacekeeping operations and its own naval operations, particularly in the Indian Ocean. China’s military presence, however, is of concern not only to the United States but to India as well. China–India relations are already tense due to disagreements over territories in the Himalayas, among other issues. CPEC passes through high-risk areas such as the autonomous region of Xinjiang and the northwest Pakistan–Afghanistan border region. The Chinese army is therefore securing infrastructure construction sites, transport roads and ports all along the corridor. In this context, BRI is a strategy that primarily serves Chinese interests. Certainly, this new Silk Road offers business opportunities to companies both in Asia and in Europe. Nevertheless, two aspects are important here: BRI is an ideological tool designed to maintain China’s internal stability, i.e. control by the CPC, while also serving as a strategy that brings together civil and military interests under the rubric of “security”.

Ideology

While Europe tries to identify a new vision, China has provided its geopolitical strategy with a second wind. Capitalism got its start in modern China when the country opened to foreign investment in 1978 and when peasants were granted permission to keep their surplus production. By unleashing its citizens’ entrepreneurial spirit, the country hoped to overcome its technical and technological backwardness. Mobilization of the often-inactive Chinese population ensured national unity in keeping with the motto of “becoming rich”. After years of economic growth and accumulated wealth, the CPC is using BRI, among other activities, to give itself not only new justification for maintaining its power but also a new ideology capable of ensuring party unity, internal stability and national cohesion. President Xi is strengthening his position, supported by the Chinese people. The country’s authoritarian regime, moreover, is tightening its grip.  Internationally, the Chinese economy is an integral part of global production chains.  Remarkably, China is also increasingly becoming a source of innovation, especially digital innovation.

Externally, China is flexing its muscles in a number of locations, including in the South China Sea, transforming “a number of islets in the Paracel and Spratly archipelagos into military bases, where the government is building ports and airstrips” (RFI, 2017).

Assured by its strong position on the geopolitical  level,  the Chinese government is embarking on a more assertive foreign policy. Domestically, the country’s government manages the country as a global enterprise. Five-year plans are a  management  tool  used  to  set the economic strategies of Chinese state-owned enterprises (SOEs), both internally and externally, to ensure  that  standards  of  living  increase  for the Chinese population. This legitimizes the CPC’s ongoing rule. The BRI vision thus mobilizes the nation, safeguarding the unity, stability and harmony of China as a whole. At the same time, however, the growing cult of personality means that China is increasingly becoming a revisionist power.

New security strategy

As mentioned above, BRI is above all a “geostrategic–military” initiative since it brings together civil and military interests under the rubric of “security”. Indeed, these interests are at the center of all decisions and actions on the political and economic levels. Using the term “security”, China’s political strategy aims to safeguard national interests both domestically and internationally. Several dimensions of “security” are differentiated: national sovereignty and national unification, along with military, economic, cultural, social, scientific and technological security, as well as the security of information, security of environment and resources and, finally, nuclear security (State of Council Information Office of the People’s Republic of China, 2015). The main objective of this major security strategy is to preserve the country’s unity, prevent social unrest and legitimize the power of President Xi and the CPC.

In conclusion, we can see that the countries interacting with the European Union are pursuing a strategy that places national interests at the center of their respective political actions. The United States and Trump’s “America first” vision, the strengthening of the authoritarian regime in China, the new cult of personality surrounding Xi Jinping, the return of Mao’s personality cult and BRI are all ultimately driven by national ideologies. On the international level, the global community could thus be dominated by superpowers such as China, the United States and Russia. Due to the weakness of international organizations, ideologies are prevailing, determining the world order. The failure of the European project could become a cruel reality if Europe does not quickly find a new vision while avoiding ideological tendencies — formulating its interests as it does so.

BRI and the EU: An Opportunity for Europe?

Diplomatic relations between Europe and China began in 1975. Since then, there have been regular ministerial meetings and Sino-European summits. More than 60 sectoral agreements have been concluded. China and the EU trade goods are worth more than €1.5 billion each day (Eurostat, 2018). The EU is China’s main trading partner; for Europe, China is second only to the United States.

For years, the EU’s trade balance (Figure 3) with China has been in deficit, with the shortfall reaching €176.4 billion in 2017. This has been a constant conflict between Europe and China. Despite numerous discussions between Beijing and Brussels, the imbalance persists for most member states, although not for Germany, Finland and Ireland (Eurostat, 2018).

Figure 3. The Trade Balance between the EU and China (2008–2017).Source: Eurostat 2018

In 2016, the EU adopted a new strategy on China that tries to respond more effectively to the scale of China’s economic power and its role as an increasingly important global player (Joint Communication to the European Parliament and the Council, 2016). The strategy complements the EU-China 2020 Strategic Agenda for Cooperation, which marked its 15th anniversary in 2018 (Press and information team  of the Delegation to CHINA, 2016). In addition, the EU is negotiating an investment agreement with China to ensure fair opportunities for both sides. The EU also wants to encourage China to give a greater role to market mechanisms and reduce state intervention. The 2020 agenda does not seem to be succeeding. China is not really interested in accepting European norms and standards and is pursuing a “divide and rule” strategy in Europe instead. Indeed, BRI further amplifies the 16+1 meetings, which China is using to negotiate with Eastern European countries. The 16+1 format risks are loosening the ties between Eastern Europe and Brussels. China is pursuing this tactic by negotiating on three levels: with European institutions, with individual member countries and with Eastern Europe as a whole (16+1). An examination of Chinese foreign investment shows that the government continues to invest massively in Europe, always to some extent in “freeloader” style. China’s preferred targets are the United Kingdom (financial sector), Germany (Mittelstand/machine-tool, automotive sector), France (tourism, cosmetics, leisure, wine), Greece (infrastructure) and Portugal (real estate). Trade is growing steadily and with it the interdependence between EU member states and China.

Investment flows into Europe from China amount to €10.2 billion (2016) with EU investments in China totaling €12.8 billion in 2016 (Eurostat, 2018). Yet even if China is investing more and more in Europe, the scope must be put into perspective: of China’s total FDI, only 5–6% has been made in Europe. The majority of Chinese investments still take place in Asia — notably Hong Kong (75.5%), Singapore (3.7%), Taiwan (3.6%), South Korea (2.8%) and Japan (2.5%). The United States accounts for 2.4% of total Chinese FDI, the Netherlands 1.7% and Germany 1.2% (Otte, 2018). In the Asian region, BRI infrastructure projects will have a very significant impact in coming years. Even if Europe is more or less at the end of this new Silk Road, Eastern European nations have become, since BRI, the center of China’s interest. Especially Poland and the Baltic countries can serve as a point of entry for goods transported via the      Silk Road. BRI can then serve as a catalyst to rebalance trade relations in favor of Europe as a whole, but only if the EU finds a common strategy for this initiative. It is therefore important not to fall into the trap of intra-European competition, or to be divided by China. On the contrary, common European interests must be identified in order to protect key EU sectors and give priority to European actors.

Above all, closer cooperation with pro-European countries is necessary, as is monitoring and guiding  Chinese  investments  throughout  the European continent. BRI will change the foundations of world trade in the medium term, and the EU risks granting even greater access to European high technology. This poses a real threat since China, as discussed, links its civil and military interests. China’s influence and geopolitical–military power could thus have an impact in Europe, especially in Eastern Europe. First and foremost, BRI is a Chinese ideology that is making it possible to pursue the Chinese dream, modernize state- owned companies and facilitate their financing by promoting access to international credit. Additionally, the increased prosperity of the countries along the BRI routes will ensure Chinese trade remains stable, a key aspect given that the Chinese economy is heavily dependent on exports.

Areas of action for the EU

In view of BRI, not only must European companies act, so must all EU institutions. A new vision for Europe must be articulated if Europe is      to avoid being taken hostage by Chinese interests. The strength of the European Union is directly linked to how it manages its diversity. In Europe, freedom of thought reinforces creativity, which is necessary for technological progress. The high quality of Europe’s companies is the result of their innovative power. Due to its democratic structures, respect for human rights, rule of law and  high  social  standards  and  norms,  the EU acts within a regulatory framework based on ethical and human values. On the commercial level, BRI offers many opportunities for European companies as investors, experts, consultants and managers. Potential activities include the following:

-Investing in infrastructure projects, such as construction of railways and roads.

-Supplying equipment, such as that needed for ports.

-Serving as partners in the areas of engineering, procurement and construction (EPC).

-Serving as consultants for project management, especially in the area of operational security and the application of international and local laws.

-Managing infrastructure operations (Wijeratne et al., 2018).

There are many opportunities and risks here. As with any transnational project of this magnitude, major differences in the relevant corporate cultures must be overcome. Above all, trust between the various international actors plays a crucial role.

In addition, different legal frameworks exist which can lead to conflicts between international and local laws. Moreover, the “time” factor should not be overlooked, since BRI is a massive project that will only be completed in the long term. In short, there are myriad factors which could hinder European companies from serving as partners within the framework of this initiative.

French President Macron — Hope for Europe?

The election of Emmanuel Macron as President of the French Republic gave, for a brief time, new momentum not only to France, but also to the EU. Macron’s visit to China was closely watched, especially by the French and German press. The French President was the first European leader   to welcome the initiative to create a “new Silk Road”. Yet a comparison  of the outcome of his visit to China with that of Chancellor Merkel’s in 2015 is less than satisfying. Only 39 of the 50 envisaged contracts have been signed and half are mere declarations of intent. Thus, the French President did not truly introduce a new approach to dealing with China. With all due respect, he only highlighted the importance of the historically friendly relations between China, France and Europe. Macron’s mistake was to invoke France’s rivalry with the United States. Alluding to the Chinese proverb “When the wind of change blows, some build walls, others build mills”, the French President referred to the con- struction of the wall between Mexico and the United States. From the perspective of a G-2 scenario, China will always measure itself against superpowers like the US and consider France and Europe medium-sized actors instead. In addition, Macron has not addressed the problems resulting from France’s and the EU’s lack of geopolitical impact given the overwhelming power of players such as China and the US. What future thus awaits the EU as a new era of global governance dawns?

Conclusion

As globalization’s pace slows, the need increases to belong to a territory, region or country. The dynamics of transnational flows erase neither borders nor the places delimited by those borders (Zajec, 2016). On the contrary, it is clear that the geopolitical powers of nation-states such as China, the United States and Russia are growing. This growth has been accompanied by resurgence of personality cults (e.g. those surrounding Xi and Putin) and of ideologies guided by national interests. BRI is a good example, since it is the ideological pursuit of the Chinese dream. The strategy behind Trump’s “America first” campaign follows the same logic, being a call to revitalize the American dream.

European identity crisis

The EU, on the other hand, lacks a dream. Following the massive inflow of refugees to the European continent, Europe’s citizens have been legitimately demanding that border controls be restored and strengthened. It is necessary to define the European identity as a result. The EU is also an arena where national and transnational forces (e.g. global companies, interest groups) interact. And precisely these transnational forces, especially international companies, often behave more or less autonomously, regardless of the regulations issued by nation-states. The EU is an inter- mediate actor, at best a forward-looking one. It is not a “United States of Europe”, neither can it boast of being a true global force. After all, European power is clearly limited in economic terms. Being a global player requires a shared vision on the economic, political, military, social and cultural levels.

Globalization in its current form has given rise to a kind of new, highly conflictual bipolar world, one that requires a redefinition of the world order. The resulting rivalry is playing out on several levels:

-Institutional: Democratic system versus authoritarian regime, even dictatorships.

-National versus transnational forces.

-Nation-states versus global companies, business alliances and interest groups (lobbying).

-Within the EU: Nation-states versus European institutions, and Western Europe versus Eastern Europe.

The identity of the heart, a nation of the heart and the strength of differences

The leaders of European institutions should not underestimate the national strengths of the member states and their respective populations. According to this logic, President Macron is wrong to want to pursue the strategy of “even more Europe” without taking into account legitimate feelings of belonging and national identity. Jacques Ancel (1879–1943) contributed the notion of identity to geopolitics. According to Ancel, groups of individuals take shape based on a common memory, history, culture and language, eventually defining themselves within a border: “He defends a nation of the heart in and of itself that is non-rational” (Gauchon and Huissoud, 2008, pp. 7–11). In this sense, the EU can act as an avant-garde player, questioning a power’s sustainability — values versus mercantilism. A new “cosmopolitical” order of this sort must ensure fair trade relations, transparency of transactions, social justice and, above all, a more equitable distribution of natural resources and goods on a global scale. More precisely, it is the human dimension and the application of moral and ethical values that are essential if there is     to be an evolution towards a cosmopolitics, a process that must respect borders and, thus, national sovereignty (Banik, 2016).

In our globalized world, neither the EU, China nor the United States is an isolated island paradise. No actor is privy to the absolute truth. The challenges of climate change, growing global competition (for natural resources, food, water, etc.), the rivalry between national and transnational forces and, above all, international terrorism are forcing us to face new realities. The illusions must be relinquished that underlie today’s ideologies (those found in Europe; patriotic Chinese-style capitalism;

 “America first”; personality cults; a return to revisionist power structures). We must bridge our differences and move towards a cosmopolitical global governance based on human values — towards an “identity of the heart”. As Europeans, let us begin evolving towards a “Europe of the heart” in keeping with Jacques Ancel’s geopolitical vision (Banik, 2016).

“It is the heart which is worthwhile and which must be considered above all.” (Jacques Ancel)

Notes: This paper was originally published in “China and the World: Ancient and Modern Silk Road, Vol. 2, No. 1, 1–18 DOI: 0.1142/S2591729319500032, reproduced with the permission from the author.

Dr. Katja Banik, since 2017, has been a speaker/guest lecturer on geopolitical and economic issues related to China, Europe and the USA and on different global governance scenarios. She is Membre Associé à Titre Secondaire at Intégration et Coopération dans l’Espace Européen — Etudes Européennes (ICEE), Université Sorbonne Nouvelle Paris 3, and a Member of GIS Réseau Asie et Pacifique/GIS Études Asiatiques in Paris. Katja Banik is the author of Les Relations Chine-Europe: À la Croisée des Chemins published by L’Harmattan (Paris) in 2016. Further, she is the Editor-in-Chief of PwC’s China Compass. Katja Banik has senior management expertise in the logistics (Shanghai and Hong Kong) and she is the founding member of ilkmade.com. http://www.katjabanik.com/

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East Asia

Taiwan: The First and Oldest ‘Thorn’ between China and the West (part 2)

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In the first part of the article, we noted Taiwan has returned as one of the thorniest issues in the US policy toward China under the Biden administration. Almost five months have passed but the new White House is yet to completely formulate its China policy framework. But as they say, the proof the pudding is in the eating. In April third week, the US Senate Foreign Relations Committee sent to the Congress the US Strategic Relations Act of 2021 passed by 22-1 vote. The Act is filled with references to “closer US ties with Taiwan.” The Act, as expected, angered Beijing which accused Biden administration of hyping up the China threat theory.

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Fearful of China attacking Taiwan anytime now, a leading US political news magazine recently pitied President Biden for he might become the first president to be thrust upon with the decision to go to war to defend Taiwan. “If a war breaks out over Taiwan, Biden may be forced into a decision no American president since 1979 has wanted to make,” the magazine observed. A similar concern was the focus of a Washington Post report within the first week of Biden coming to office, i.e., “the dragon has woken up and Washington should engage with it.” The newspapers’ national political correspondent Olivier Knox wrote: “President Biden hasn’t been in office for a full week, but already faces questions about one of his most solemn duties: when, why and under what circumstances he might send Americans into combat.”  

In fact, from the Trump era onwards the US mainstream media (MSM), the State Department and the Pentagon – all have been consistently building up pressure on the White House to provoke China and take action against “the dragon.” On its part, the White House has increasingly sent out signals “it is prepared to send military into situations where there is high probability of combat.” Dangerous yet true is overall consensus in the US for quite some time demanding “aggressive toughness” as against the so-called “cringing appeasement,” should China commit a “strategic miscalculation” in the SCS or in the Taiwan Strait. On the other hand, “wolf warrior” statements and periodic military-strike threat to Taiwan from Beijing have been only adding fuel to the fire.

Let’s recall a short chronology of the US statements and actions over Taiwan in order to ratchet up pressure on Beijing. In part one of the article, we have noted two visits to Taiwan – both “first” since Sino-US normalization of ties in 1979 – by the Trump cabinets’ highest-level officials in September last year; ahead of the two visits, the US ambassador to the UN, Kelly Craft, had lunch with Taiwan’s top official in New York, James K. J. Lee. Craft-Lee meeting was described in a section of the US media as “historic” as it was the first time such a meeting took place since China seat at the UN was passed on from Taipei to Beijing in 1971.

Further, in last December, John Ratcliffe, the director of the US National Intelligence wrote in the WSJ: “As Director of National Intelligence, I am entrusted with access to more intelligence than any member of the U.S. government other than the president. If I could communicate one thing to the American people from this unique vantage point, it is that the People’s Republic of China is poses the greatest threat to America today, and the greatest threat to democracy and freedom world-wide since WWII.” Ratcliffe’s article was described by some as aimed at “setting the scene for a post-Trump administration.”

For limitation of space, let me cut to the chase and fast forward to the latest of President Biden’s actions which tantamount to undermining the “One China” policy without openly challenging Beijing but increasing the risk of conflict. Last week, a Democrat and a Republican member of the House of Representatives together moved a bill which would rename Taipei Economic and Cultural Representative Office (TECRO) as Taiwan Representative Office. According to the bill, it is time for the State Department, for the Congress to take action to elevate relations with Taiwan. Remember, three months ago in March, a similar provocative step was taken by the US ambassador to the archipelago nation of Palau, John Hennessey-Niland. During his visit to Taiwan, a first in 42 years by a sitting envoy, he by mistake referred to Taiwan as “country.” Of course, no clarification or apology to China was offered. 

Interestingly, ever since the Carter administration normalized the US-China relations in 1979, on the issue of “One China” policy successive US administrations have all pursued a policy of strategic ambiguity(emphasis added). It has been an open secret and Beijing is not oblivious to the fact that the US understanding on “One China” policy is as good as fiction. Feeling helpless, Beijing so far has been compromising as long as the US does not cross China’s three Red Lines: Taiwan formally declaring independence; Taiwan acquiring nuclear weapon; an “outside power becoming too cozy” to Taiwan. John Culver, who served CIA for over three decades monitoring movements in the Taiwan Strait and retired last year, reckons “Beijing has made clear it has three ‘red lines’ that, if crossed, would see China go to war tomorrow.”

President Biden and his “team China” have been relentlessly issuing statements in order to heighten tensions between the mainland and Taipei. As recently as in April, the Secretary of State Blinken dared Beijing by saying “it would be a serious mistake for anyone to try and change the existing status quo by force.” Without specifying when exactly the Chinese government is going to push reunification by force, Joseph Hwang, a professor at Chung Yuan Christian University in Taiwan, said Beijing is waiting for an opportune time. The current lull is “is the quiet before the storm,” Hwang mulled over looking lost.

Inviting Taiwanese envoy to Biden swearing-in should not be viewed as one-off diplomatic move aimed at provoking China. Instead, and in fact, uninterrupted continuity in escalating tensions between China and the US even as Trump exited and Biden entered the White House on one hand, and China relentlessly mounting political, economic and military pressure on Taiwan, on the other hand, have turned the Taiwan Strait into potentially one of the most vulnerable military conflict hotspot. As an article in The Diplomat observed hours after Biden delivered his 100-days to the joint session of the Congress: “The Biden administration entered office at a critical inflection point for the United States. President Biden inherited a world order and in particular an Indo-Pacific region that is undergoing profound change with China’s rise and an ongoing geopolitical shift toward Asia. Within this broad expanse, the Taiwan Strait is increasingly a critical military flashpoint.”  

Finally, the purpose of a series of top government officials’ visit to Taipei, top US diplomats referring to Taiwan as “country” by slip of tongue, for several months on continuing presence of the US naval aircraft carriers in SCS and in nearby waters closer to the Taiwan Strait, and the latest attempts to create vaccine “friction” across the Taiwan Strait – all these actions are gearing towards one common goal, i.e., to elevate US-Taiwan relations as Washington prepares for conflict with Beijing. As NIKKEI Asia reported it last month in its ‘Politics’ columns, headlined: “US vows to approach Taiwan with clarity and resolve.” The influential Asian political newsmagazine from Tokyo further stated: “A comprehensive American strategy on China under President Joe Biden’s administration is still in the works, but Washington has promised to approach Taiwan issue with ‘steadiness and clarity and resolve’.” 

The US Senate Foreign Relations Committee sending a bipartisan bill to the Senate floor in April, sponsored by Senators Menendez (D-New Jersey) and Misch (R-Idaho) respectively, is being described by some critics in US as “the most important piece of legislation regarding US policy toward China in the Congress.” Implying it to be one of the most belligerent bills, Beijing’s China Global Television Network website condemned the bill as the US Congress “declaring Cold War on China.” Referring to Taiwan-related content in the bill, the CGTN said: “The bill contains several misleading statements about the US policy on China’s Taiwan region.” China’s official Xinhua news agency reported that the Act stipulates that the US government shall not place any restrictions on the ability of US officials to interact with Taiwan. The Xinhua cited Michael D Swaine, a scholar of China securities Studies, as saying: “the Act epitomizes the worst errors of the new Washington consensus on what a rising supposedly means for the United States and the world.”

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East Asia

Taiwan: The First and Oldest ‘Thorn’ between China and the West

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Over three hundred and fifty years ago, when the West lost its first war with China over Taiwan, the technological level between the two sides was fairly even. But the Dutch, then the most dynamic colonial power, paid a heavy price for misbelieving “China might have invented gunpowder but we possess superior guns.” Today, the world is witnessing China’s rapid rise and the US is in decline. The question is, will Taiwan once again bust the Western (aka US) superiority myth?                                                                         

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In 1662, the West fought its first war with China and lost. The Sino-Dutch War, as it is called now, was fought when a Chinese admiral dared the Dutch East India Company to give up its little under half century ‘rule’ over Taiwan. The defeat resulted in the island falling under Chinese rule for the first time in history. It is not so important to know it was China’s first great victory over Europe’s most dynamic colonial power. In the words of the Dutch historian, Tonio Andrade, what is more significant is the first Chinese victory over the West broke the myth of Western superiority as it had been achieved on the basis of “Chinese advantage in strategic and tactical culture.” (Emphasis added) The Chinese victory also broke another myth which the Western historians held on to until as recently as in 1970s, i.e., the Chinese might have invented the gunpowder but didn’t know how to use it as weapon, Andrade, the author  went on to add.

Fast forward to the present-day tensions in the Taiwan Strait. As China embarked on the path of Reform and Opening-up, relations between Beijing and Taipei too started improving in the early 1980s. Seen as a remarkable political development on both sides of the Taiwan Strait in 45 years, the KMT government in Taipei declared in 1991 “an end to the war with the People’s Republic of China on the mainland.” However, since the election of Chen Shui-bian as president in 2000, political headwinds in Taiwan have been moving in the opposite direction to Beijing. Alarmed by Chen’s backing of demands for Taiwan’s independence, Beijing was quick to pass anti-secession law a year after Chen was reelected in 2004.

In 2016, following Donald Trump’s victory in US and the victory of Ms. Tsai Ing-wen as Taiwan’s president respectively, Beijing’s fear of Taiwan declaring itself an independent country has reached unprecedented levels. In fact, Beijing is feeling seriously threatened by the US role in creating conditions for Taiwan to declare independence. Immediately upon assuming office, President Trump held telephone conversation with the Taiwan president – something which no other US had done in the preceding forty years. This was the beginning of a new trend in US-China relations and which grossly undermined the “One China” policy.

During the past decade (between 2007 and 2019), the US warships made over one hundred trips through the Taiwan Strait. No wonder Beijing has been describing Taiwan as “the most important sensitive issue in Sino-US relations.” According to New Strait Times, in 2020, the year of Coronavirus pandemic, the cross-strait faced its worst crisis in the past two decades. Without denying that the PLA fighter planes crossed maritime border with Taiwan, China however dismissed Taipei’s claims of “incursions” by the mainland. Beijing even maintained its warplanes, bombers and anti-submarine aircrafts “conducted normal exercises on September 18 and 19 respectively and that the median line never existed.”

However, according to experts, the median line is the unofficial airspace boundary between Taiwan and China, and was demarcated by US Air Force General Benjamin Davis Jr. in 1955, before the US pressured both sides to enter into a tacit agreement not to cross it. Media reports originating from Taipei, Hong Kong and Singapore claimed the forty or more PLA incursions last October, were prompted by two US top officials visiting Taipei during August-September period last year. “U.S. Under Secretary of State Keith Krach arrived in Taiwan on Thursday for the second visit by a high-level American official in two months. The first visit was by the US Health Secretary Alex Azar in August 2020.” The visits by Krach and Azar respectively were first highest-level US Cabinet visits to Taiwan – in gross violation of the US commitments to China – since the US switched formal relations from Taiwan to Beijing in 1979.

This year, especially within hours following President entered the White House, the new US administration lost no time in announcing “our commitment to Taiwan is rock-solid.” Two days earlier, the State Department invited and officially received Taiwan’s unofficial ambassador in Washington to Biden’s inauguration – the first envoy from the island present at a presidential swearing-in since 1979. Both the statement of commitment to Taiwan and the presence of Taiwanese envoy at the presidential inauguration respectively were interpreted by strategic affairs experts in Washington and Beijing as moves to provoke China towards making a strategic mistake leading to military conflict.

Further, Taiwan has returned as “thorniest” issue in US-China relations under President Biden – since perhaps it is easier to violate “One China” policy than to either rally European allies against China or to announce a decisive Washington position toward Beijing. As President Biden gears up to embark on his maiden in-person visit to shake hands or bump elbows with his European allies, the US administration has further escalated tensions over Taiwan. Last Sunday, a bipartisan contingent of three US Senators – Tammy Duckworth and Christopher Coons, both Democrats, and Dan Sullivan, a Republican – briefly visited Taiwan on a US military aircraft.  According to media reports, the Chinese Defense Ministry described the visit as “extremely vile provocation.” Reuters citing Chinese sources said China believes that “Biden administration is challenging one-China principle and trying to achieve the so-called goal of ‘using Taiwan to control’ China.” 

Experts in Beijing point out, Biden is accelerating the pitch of what started under Obama and was intensified by Trump, i.e., to use “the US economic and military might to pressure Beijing and force it to accept US hegemony in the region.” Elsewhere, first the joint statement following Biden-Suga summit in April and then in late May the statement released after the summit meeting between European leaders and Japan’s Prime Minister Suga, are being interpreted as “belligerent stances towards Beijing initiated and encouraged by President Biden.” The EU-Japan post-summit statement called for “peace and stability across the Taiwan Strait.” Similar to several moves initiated by Trump and Biden challenging one-China policy, the EU-Suga joint statement too is the first time that Taiwan has been included in such a statement. 

A scholar in Tianjin, who writes a column for ftchinese.com, the daily online Mandarin version of the Financial Times, thinks Biden has intensified the so-called Thucydides trap. In a recent article, he has actually put forward a solution for Beijing to not only avoid falling into the trap, but also steer clear of having to choose between using force to reunify with Taiwan and being forced into military conflict with the US by striking first. To sum up Li Yongning’s rather long thesis, he prescribes that China fight out Thucydides trap with economic growth and people’s prosperity. To prove his point, Li flashes the example of de-escalation of hostility between China and Japan. Remember until a few years ago, heightened tensions between the two over Diaoyu or Senkaku Islands. Of late, especially since the middle of Xi Jinping’s first five year tenure, belligerent provocations between Beijing and Tokyo have almost ceased.

How did China under Xi achieve this? According to Li, Xi’s strategy to strike peace and tranquility with Japan was simple and practical. “China’s GDP exceeded Japan’s in 2010 and by 2019 it became 2.8 times more than Japan’s, which put an end to Sino-Japan competitiveness. Likewise, once China achieves one and a half times or twice bigger GDP of the USA, the China-US competitiveness will be rendered as joke,” Li contended. In 2017, in PPP terms China had already exceeded the US economy. Li cited a Brookings Institution report which predicted China’s GDP will cross America’s in 2028. “Once China reaches there, higher GDP will act as shock absorber for all Sino-US conflicts,” Li wrote.

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China’s know-how on becoming the oldest society in the world

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china bicycle

For decades, China had a “one-child policy” that permitted families to have only one child. A few years ago, this restriction was changed to a “two-child policy”, and now the Chinese government has allowed the Chinese people to give birth to three children.

The main reason for this is the concerningly low birth rate and the impending demographic crisis. China is still the country with the largest population (1.41 billion), but UN forecasts indicate that India will soon surpass it, since India has a much higher birth rate.

Statistics show that last year approximately 12 million babies were born in China, which is the lowest birth rate China has had in many years. For instance, in 2016 when the “two-child policy” was implemented, the number of newborns reached 18 million.

Chinese demographers argue that it will be difficult for China to boost birth rate in the near future because the number of women in the reproductive age is decreasing. This was caused by China’s “one-child policy” that was in force from 1979 to 2015.

Chinese families could give birth only to one child, and many families chose to “spend” this quota on a boy, since in China boys have traditionally been valued more than girls. If a family were told they were expecting a girl, the mother would often decide to have an abortion.

This caused an unexpected outcome – the number of men exceeded the number of women. Although it was not allowed to find out the sex of the baby during pregnancy, there were several ways to do so which lead to numerous late abortions. That is why currently there is a disproportion between the number of men and women in the Chinese society.

As a result, modern China is overproducing men and is in a grave lack of women. Statistics indicate that there are 35 million more men than women – leaving many men with no chances of finding a spouse.

Moreover, the beliefs and values of the Chinese people have also changed over the years, i.e. many women wish to pursue a career first and only then to establish a family. The recent years have seen a rapid decline in marriages in China.

These trends are particularly prevalent in Chinese cities, leading demographers to predict that the gap between the situation in cities and the situation in the countryside will only widen in the future – people in the countryside still prefer larger families, while city dwellers have a hard time giving birth to a single child.

“Now, we are allowed to have three children. The problem, however, is that I don’t even want one child,” a user of the Chinese social media network Weibo wrote in his account.

Many are asking the question – will the “three-child policy” change anything if the “two-child policy” wasn’t able to do so? That’s why people are happy about the government’s decision to provide other incentives and motivations in this regard.

For example, education costs – which were twice as high in two-children families – will be cut, people will see additional support on tax and housing issues and working women will be granted more rights. In addition, the government also has plans to educate young Chinese people on the issues of marriage and love – now, state propaganda will not only deal with shaming the West, but also teach people how to love correctly and “make children”.

This leads to believe that the Chinese government has taken quite a peculiar approach to identifying mistakes in their previous policies, but it isn’t truly admitting these mistakes – as is the case in all authoritarian regimes. If the previous plan fails, simply improve it a bit and relaunch it anew.

The “one-child policy” has led to one-and-a-half generation where there are six people from the non-working population for each person in the working population, i.e. the person’s parents and two sets of grandparents. This is the Chinese Communist Party’s know-how.

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