Category Archives: Indo-Asia-Pacific

Indo-Asia-Pacific

Is the Belt and Road Initiative Too Big to Fail? Pt. 2

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What could and should the United States do if the Belt and Road Initiative collapses? 

By Grant Newsham and Tuan Pham

Part one of this two-part series discussed the growing concerns of a Belt and Road Initiative (BRI) bubble that may burst, and that China’s hurried and reckless BRI investments through the years are beginning to drag down its already slowing domestic economy.

So to advance the strategic dialogue, let’s assume that the BRI bubble has, or is close to bursting, and is exacerbated by a weakened Chinese economy and a destabilizing trade war. In part two, each author individually offers his perspective on what America could and should do (and conversely not do) as the result thereof. 

Opportunities – What to Do 

Pham: Make the most of the strategic opportunity and build more economic leverage on the issues of China’s unfair trade policies and practices, discriminatory trade barriers, unequal trade balances, forced technology transfers, and intellectual property rights theft. Leverage the recent U.S.-European Union agreement to ally against China which has nearly broken the world trading system. Then, convert the accumulated economic leverage into additional political leverage in the geographic spheres of North Korea, South China Sea (SCS), East China Sea, and Taiwan and contested domains of space and cyberspace – similar to how Beijing uses the BRI. When appropriate and expedient, rejoin the Trans-Pacific Partnership to complement the other U.S. instruments of national power; bind America to the other regional economies; blunt the other Chinese economic initiatives like the Regional Comprehensive Economic Partnership and Asian Infrastructure Investment Bank; and ultimately offer an enduring alternative to the BRI. From there, use the added influence to further encourage and challenge China to become a more responsible stakeholder that contributes positively to the international system and uphold the international rule of law and respect for global norms (human rights, freedom of navigation, etc.); and in the long-run, possibly consider a grand bargain to adopt mutual agreements and avoid another Cold War (no large-scale conflict directly between the two sides, but each may be supported by major regional “proxy” wars) and the Thucydides Trap (a rising power challenges a dominant power leading to a great power competition for preeminence).

Of note, the concept of the Thucydides Trap has detractors who understandably and fairly warn against the Chamberlain Trap (avoiding conflict through concessions) and cite the years of ill-advised U.S. acquiescence and accommodation (strategic patience and wishful thinking) in the SCS. Nevertheless, no matter which side one takes on this philosophical debate, the reality remains that China and America are interlocked in a strategic competition for regional and global pre-eminence. So, how best to contain and manage this competition and keep it from escalating into a “no-win” conflict?

Newsham: Recognize that China’s objectives with the BRI are ultimately political. BRI is one front in an existential, multi-front campaign to displace and overtake the United States – and America’s pernicious notions of individual liberty, rule of law, and equality among nations – that have served the world well for the last 70 years.

As such, the U.S. Government (USG) ought to do several things with the BRI in mind. First, develop and implement a political warfare effort that exposes the BRI as ultimately a combination of colonialism and loan-sharking. As often as not, BRI investments and projects are over-priced, poorly thought out, and shabbily constructed; and benefit China and Chinese companies more than the recipient countries. 

Toward this end, the USG might also profitably direct its vast intelligence resources toward exposing the corruption and payoffs that are part and parcel of Chinese business and government efforts connected with the BRI. The USG bringing charges against Patrick Ho, a former top Hong Kong official, for bribing African officials on behalf of a Chinese company shows what is doable. Locals who resent Chinese heavy- and under-handedness will welcome exposure of such improprieties.

Second, keep trade pressure on China in response to longstanding unfair trade practices. This pressure – and attendant reductions in the foreign exchange needed to keep the Chinese economy chugging along – reduces funds available for BRI activities – to include investments, bribes, and bailouts. It’s ironic that U.S. and Western businesses have effectively funded the BRI efforts – not to mention China’s military development.

But it’s not enough to criticize China and the BRI – even if well founded. Indeed, one must admire China and Chinese companies’ willingness to get involved in countries where American companies refuse to go. The USG needs to work closely with the private sector and change the “risk profile” for American companies so they might show some initiative and go where Yankee Traders of old used to go. And since this is ultimately a political struggle, why not link the public-private partnership effort with that of allied countries such as Japan, Australia, South Korea, the United Kingdom, and others?

In summary, recognize the BRI for what it is, expose its vulnerabilities and rapacious aspects, keep trade pressure on China and thus reduce the foreign exchange available for its BRI activities. And as importantly, the United States and like-minded countries need to offer a better alternative.

Challenges – What Not to Do

Pham: In light of the deepening economic stagnation, the present risk of domestic political instability may drive Beijing’s future foreign policy. Economic prosperity (purse) and nationalism (people) – buttressed by the People’s Liberation Army (gun) and propaganda (pen) – have long been the principal sources of legitimacy, credibility, and stability for the Chinese Communist Party (CCP). As the prosperity and nationalism wanes, President Xi Jinping (undisputed core leader of CCP) may increasingly rely on propaganda and security – tempered to a certain extent by fiscal constraints – to maintain the party’s (and his own) power and influence over the masses. In other words, make people look outward at the forest and not inward at the trees.

But here lies the strategic quandary for U.S. policymakers. The tricky part is to avoid strategic overreach and to find the right balance of making the most of the strategic opportunity without  triggering the CCP to a tipping point that elicits a strong nationalist response (including military confrontation).

Newsham: Don’t bail out Xi and China if they’ve been overextended on the BRI. They won’t appreciate the gesture. The more problems Beijing has with financially draining overseas ventures – and the inevitable local opposition they provoke over time – the less China can concentrate its efforts on military development and bringing its regional neighbors to heel while being able to take on its declared main enemy – the United States. It also dispels the image of inexorable Chinese domination.

Don’t try to calibrate just the right mix of pushback and engagement (to include on the BRI) that will make Beijing become a “responsible stakeholder.” Why should it? China has done well enough over the last 40 years without adjusting its behavior. Robert McNamara also tried “calibrated” pressure with North Vietnam. It didn’t work very well. Instead, stand up for America’s own interests and keep the pressure on.

Don’t consider the chance for a few American firms to make some money on BRI projects to outweigh the existential threat the CCP-led China poses to the free, liberal world order. And don’t forget that today’s China holds over one million people in internment camps and is trying to do the Uighurs what King Edward the First tried with the Scots. It is also a repressive security state along the lines George Orwell wrote about and where modern technology is creating new and unprecedented tools of oppression. At the end of the day, regardless of the highways, ports, and bridges it might build (for a considerable price and of questionable quality) in far-flung places, it should always be remembered that the BRI is an outgrowth of a staunchly authoritarian and repressive regime. 

Conclusion 

China risks big with the BRI, and accordingly, could lose big if indeed the declining trend lines are proven correct. If so, how does it impact Beijing’s strategic ambitions for national rejuvenation and ultimately global preeminence? But more importantly, how could and should Washington make the most of the strategic opportunity?     

Grant Newsham is a retired U.S. Marine Officer and a Senior Research Fellow at the Japan Forum for Strategic Studies.

Tuan Pham is widely published in national security affairs and international relations. The personal views expressed therein are their own. 

Featured Image: Officials attend the groundbreaking ceremony of the rail project linking Bangkok and Nakhon Ratchasima, on Dec. 21 in Nakhon Ratchasima, Thailand. (Photo by Yukako Ono).

Indo-Asia-Pacific

Is the Belt and Road Initiative Too Big to Fail? Pt. 1

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What could and should the United States do if the Belt and Road Initiative collapses? 

By Tuan Pham and Grant Newsham

More and more China Watchers, to include these two observers in Japan, are having increasing doubts about the Belt and Road Initiative (BRI), Beijing’s trillion-dollar wide-ranging infrastructure enterprise that spans across Asia, Africa, Europe, Oceania, and the Americas to elevate Chinese global economic and political standing. The grandiose national plan seeks to make a lot of money, acquire more resources, gain additional power, and expand influence to advance Beijing’s strategic ambitions of national rejuvenation (the Chinese Dream) and ultimately global preeminence – or even better, dominance. So what if these pundits are correct and the possibly over-leveraged BRI continues to underperform and not deliver the promised returns, receive increasing political backlash (buyer’s remorse over crushing debt burdens), and eventually collapses? What are then the ensuing opportunities and challenges for America?

This two-part series is a thought exercise to engender strategic thought, dialogue, and planning on this possibility. Part one starts with making a case for a BRI bubble that may burst. In part two, each author individually offers his perspective on what America could and should do (and conversely not do) as the result thereof.      

A BRI Bubble

There are growing concerns of a BRI bubble that may burst, and that China’s hurried and reckless BRI investments through the years are beginning to drag down its already slowing domestic economy. Beijing reportedly is applying the brakes. Chinese officials are now expressing qualms that Chinese corporations need to be cautious on how much they lend under the flagship project, but interestingly are not mentioning how much state funding is being expended on the BRI.

Nonetheless, Beijing reportedly has begun a comprehensive accounting of how many deals have already been done, on what financial terms, and with which countries. Beijing has also tightened capital and exchange controls to better manage BRI investments out of concerns over China’s domestic financial conditions. Altogether, the moves are intended to rein in the “wild west” investing environment, hedge against an uncertain Chinese economic outlook, and curtail the worrying capital flows outside the country. Since last year, Beijing appears to be trying to bolster an apparent lagging enthusiasm for the BRI.

However, to fully understand the nature, scope, and extent of the problem, it is best to start at the beginning. In the early 2000s, Beijing implemented the “Go Out” policy, which incentivized Chinese corporations to seek business ventures abroad by providing easy credit, cheap loans, and attractive financial guarantees from China’s national banks. Ten years later, stimulated by the government-sponsored BRI and fueled by relaxed financing, Chinese firms undertook even more speculative investments based on the flawed assumptions that the BRI was too big to fail and the central government will simply bail them out if they do fail. Not surprisingly, many of these risky BRI projects have underperformed and incurred massive debts and the impacts for the Chinese banks, and through them the Chinese economy, are now becoming evident. That is why Beijing has been assertively (and some might say desperately) cajoling (pressing) other countries and international organizations to invest in the BRI – and take on some, or most, of the risk.

China’s Economic Stagnation

Many observers have long worried that the BRI (with its hidden nationalist agenda and geo-political implications) represents an economic and political power play by Beijing, buttressed by its vast monetary reserves and driven by the Chinese Communist Party’s (CCP) preoccupation with realizing its long-term goal of achieving global influence and ultimately global preeminence. But even with its immense economic power (second only to the United States), China still has its limits. Its economy is showing signs of slowing, and it is in a nascent trade war with the United States. At the same time, Beijing is struggling to tame its own mounting debt problems – problems that international lending and domestic spending sprees haven’t helped – and may even be letting up on its campaign to arrest debt growth as it faces a weakening economy at home and escalating trade tensions abroad.

Weeks before the onset of the trade war, a government-affiliated Chinese think tank, the National Institute for Finance Development, warned of impending financial panic potentially leading to financial crisis. It pointed to this year’s cascade of bond defaults, tightened liquidity, declining stock markets, and weakening Yuan. The report added that U.S. interest rate hikes and a looming trade war suggest that “the Chinese people are very likely to experience a financial panic very soon,” and that Beijing had best come up with a crisis management plan to deal with the panic.

The Chinese stock market lost two trillion dollars in value in the last six months, a worrisome economic indicator for Beijing, particularly in the midst of a destabilizing trade war that is beginning to increasingly impact the Chinese economy. The CCP’s claim to unopposed rule explicitly and implicitly depends on economic performance (prosperity), and an underperforming market is a poor reflection of its governing competence and by extension its political legitimacy. A bearish Chinese stock market is also a psychological reflection of how the Chinese people think of their current and future economic prospects. If so, once public doubt builds and takes hold, the wave of pessimism could intensify and spread, and if left unchecked become pervasive fear and panic.

Trade War Wildcard

The ongoing Sino-U.S. trade war is proving to be a propaganda quagmire for Chinese President Xi Jinping and the CCP, both on the domestic and international fronts. Regarding the former, they lose “face” if they say nothing or too little and they face public anger and political risk if they say too much and cannot deliver on their promises. As for the latter, Xi may have realized that jingoistic rhetoric may not be helpful and may even be counterproductive to ending the trade war on favorable terms and instead undermines Beijing’s carefully crafted international image as a defender of global trade.

The official CCP response to the trade war has aimed at depicting China and the Chinese economy as being strong enough to cope with a trade war. Yet, Beijing’s statistics bureau has reportedly published inaccurate economic data to bolster the arguably false impression that the Chinese economy is handling U.S. trade pressures well. Indeed, the CCP might be in more distress at this point if the world realizes that it has been exaggerating (bluffing) about its economic strengths and capacities to withstand a trade war, as evident by its continued “optimistic and suspect” gross domestic product (GDP) outlook despite lack of corroborating economic data and growing skepticism of Beijing’s statistical methodology.

All in all, the trade war has cornered Xi and the CCP as is evident by the changing and inconsistent public messaging and media censorship to control domestic narratives. If they cannot cope with the trade war and lose control of the aforesaid narratives, then their control over Chinese society might diminish while undermining Xi and the Party’s power and authority. If so, expect even fewer civil liberties, greater censorship, and more draconian crackdowns in the coming months to restore the CCP’s grip on public order and confidence in Xi’s leadership. The latter apparently showing some political vulnerabilities in the form of a surprising rebuke at home and telling personal affirmation of the need for resolute leadership. In recent weeks, Beijing’s government, intellectual, and media have been rife with “rumors” over leadership discontent with Xi – particularly over his bold power consolidation and brazen rollback of collective leadership norms, mismanagement of the all-important bilateral relations with Washington, and poor handling of the ongoing trade conflict with the United States.         

Beijing has also embarked on an aggressive media campaign to influence foreign audiences (sharp power). The latest being a short satirical video by the China Global Television Network (international offshoot of state-owned broadcaster China’s Central Television), mocking President Trump and highlighting many of China’s concerns (grievances) in the ongoing trade dispute; and an op-ed piece in the Los Angeles Times, pushing the narrative that “the American people need to hear the truth about U.S.-China trade, instead of Trump’s charges of bad faith…despite what the president says, trade is free and fair, and these 10 points explain why.” They are:

(1) Although China, as a developing country, has higher tariffs on U.S. goods than the United States does on Chinese goods, its tariffs are still lower than those of many other developing countries.

(2) As for goods coming into the United States, inexpensive Chinese imports have helped the U.S. middle class.

(3) It isn’t Chinese barriers but U.S. export controls that limit our economic exchange.

(4) Trade deficit numbers can be deceiving.

(5) When American protectionists talk about the trade deficit with China, they deliberately ignore the U.S. surplus in “service trade.”

(6) Another thing protectionists deliberately ignore is that the sales of U.S. companies in China have surpassed $500 billion.

(7) In 2017, China’s external payment of intellectual property fees reached $28.6 billion, 15 times more than when it joined the World Trade Organization (WTO) in 2001. U.S. intellectual property owners are the biggest beneficiaries.   

(8) No laws or regulations compel technology transfers; joint ventures are based on deal-by-deal negotiations and some U.S. companies are willing to transfer technology for Chinese market access.

(9) President Trump wants to stop “Made in China 2025,” the state-subsidized plan to modernize Chinese industries, and he charges China with “state capitalism.” However, Chinese subsidies are not out of line with WTO regulations, and they are available to foreign-funded enterprises too.

(10) China’s trade practices are generally in compliance with WTO rules. 

This is of course better characterized as Chinese “advocacy” rife with half-truths and questionable assertions rather than a fair-minded assessment. Hopefully it is not taken at face value.

Conclusion

This concludes a short discourse on why the BRI bubble may burst. The dialogue sets the conditions for further discussion in part two on what America could and should do (and conversely not do) as the result thereof.     

Tuan Pham is widely published in national security affairs and international relations. Grant Newsham is a retired U.S. Marine Officer and a Senior Research Fellow at the Japan Forum for Strategic Studies. The personal views expressed therein are their own.

Featured Image: A Chinese flag flies over Tashkurgan, a small town at the front line of the $62bn China-Pakistan economic corridor (Cpec). (Tom Phillips for the Guardian)

Indo-Asia-Pacific

Competition and Neutrality of Southeast Asian States in Indo-Pacific Strategy

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By Shang-su Wu

Due to their central location between the Indian and Pacific Oceans, maritime Southeast Asian countries have increasingly important roles in the Free and Open Indo-Pacific (FOIP) Initiative. Despite some constraints, such as the inability of the Association of Southeast Asian Nations (ASEAN) to coordinate its membership’s defenses, these regional states and their relatively weak but growing navies, with a home field advantage, matter in terms of the balance of power in the Indo-Pacific region. Based on their non-alliance tradition and economic interests with China, Southeast Asian countries would not join FOIP, but engagement between them would be crucial for the strategy connecting the two oceans.

Geographically, Indonesia, Malaysia, and Singapore are the most relevant to control of the critical straits, whilst other coastal states, such as Brunei, Myanmar, the Philippines, Thailand, and Vietnam have a potential influence over adjacent sea lines of communication (SLOCs). These Southeast Asian countries are not militarily or economically equivalent with any member of the Quad (the U.S., Japan, Australia, and India), or China, and it is unlikely that these relatively weak countries could challenge the rights of passage under the United Nation Convention on Laws of the Sea (UNCLOS). However, while their naval and air bases are strategically important for securing nearby SLOCs, the physical capture of such locations appears politically and militarily infeasible nowadays.

Politically, it would be very difficult for the UN Security Council (UNSC) to pass any resolution authorizing any power to conquer one or more Southeast Asian countries, as a veto would be expected from other permanent UNSC members. Although hybrid warfare, such as a Crimea-style invasion, could not be excluded, lack of similar historical and ethnic linkages could make such operations more uncertain, if not unlikely. In addition, unlike some “trouble-maker” countries that challenge existing international norms, Southeast Asian countries generally remain neutral, taking modest positions which keep them from becoming legitimate targets in the international community.

Militarily, force projection in Southeast Asia is already a certain challenge for most aggressors, and to secure control over local populations could be even more difficult. For example, territorial defense with grassroots organizations prepared by the Indonesian Armed Forces (Tentara Nasional Indonesia, TNI) would provide systematic resistance during and after conventional warfare in cases such as Sunda, Lombok, Makassar, and other Straits in the Indonesian Archipelago. Securing control of the Malacca Strait is further complicated since it falls under the control of three countries. Given that conquering the islands at chokepoints in key straits would be difficult, the roles of maritime Southeast Asian countries in the FOIP need to be discussed in various scenarios.

Scenarios, Positions and Policies

The potential maritime conflicts between sea powers in the Indo-Pacific region can be categorized into three scenarios: major conflict, tight confrontation, and peacetime. A major conflict between China and the U.S., and perhaps its allies, would only likely impact Southeast Asia if China is able to maintain sea control over the first island chain. If Beijing loses the first battles or cannot retain sea control over the specific disputed area, its dream of sea power could vanish and make Southeast Asia strategically less important. In contrast, if China is able to gain the upper hand over the U.S. or another Quad member in a first-round exchange, this could force the latter to choose between preparing for the next battle or blockading the key straits in Southeast Asia, aside from negotiating for peace. In a blockade, there is no doubt as to the importance of the maritime Southeast Asian states along the straits. Another scenario is a major Indo-Sino conflict shifting from land borders to the maritim domain, where Southeast Asia is an inevitable chokepoint for both navies. In a scenario of tight confrontation where aircraft and vessels of China and the Quad members follow each other with occasional provocations, the relatively narrow sea passes in Southeast Asia are convenient for such tailing operations. During peacetime, the straits in Southeast Asia still provide critical locations for surveillance and deterrence.

Southeast Asian countries would have three political positions in the face of such scenarios: strict neutrality, loose neutrality, and aligning with one side. Loose neutrality would be the common practice in the region, evidenced in all maritime Southeast Asian countries’ policies and participation in the non-alliance movement. Although the Philippines and Thailand retain their defense treaties with the U.S., their current policies are notably different. During the previous Aquino administration between 2010 and 2016, Manila was probably seen as pro-Washington due to countering Beijing’s territorial claims in the West Philippine Sea, but President Duterte has replaced these policies with Beijing-friendly ones. In contrast to the common practice, strict neutrality and alignment with one side would be less favorable options for Southeast Asian countries during peacetime or even in crises of tight confrontation due to different concerns. Strict neutrality does not fit the complicated inter-state competition overshadowing the era of globalization, but alignment would present risk for being on a loser’s side.

Under these loosely neutral positions, each Southeast Asian country may have certain policies favoring a specific power. Arms procurements and intelligence sharing would represent relatively implicit policies showing their preferences or linkage. Joint exercises, foreign military presence, and deployments are clearer indicators.

The Regional Military Capacity

Thanks to decades of economic growth, maritime Southeast Asian countries have significantly modernized their navies and other related forces, which have strategic values for two main reasons. Firstly, as an overt invasion of Southeast Asian countries is unlikely, their military capacity is unlikely to be fully neutralized. As a result, their specific capabilities, particularly submarines and other sea denial means, can deter potential aggressors. Secondly, despite inferior quantity and perhaps quality, regional militaries have home field advantages, such as theater familiarity and shorter LOCs.

Several characteristics appear when examining Southeast Asian naval modernization. Firstly, the naval modernization among regional states is diverse on both national and asset level. On the national level, some countries, like Singapore, are comprehensively armed, and some others, such as Brunei, are at best partially equipped. On the asset level, vessels and aircraft in the same classes may have differing performances due to different designs and costs. For example, some regional frigates are armed with layered defense against anti-ship missiles, but some have only a single system of short-ranged surface-to-air missiles (SAM) without any additional margin.

Secondly, despite the diverse practices, regional countries take a balanced fleet approach and invest in both sea control and sea denial capabilities. The level of distribution between sea control, such as major surface combatants, and sea denial, such as submarines and fast attack craft (FAC), depends on each country’s strategic circumstances. The balanced fleet approach weakens the capacity of Southeast Asian navies in conventional warfare against a stronger adversary, as most ships remain vulnerable in the face of superior firepower and are unlikely to achieve their sea control mission during wartime. However, the regional navies have to deal with peacetime missions, such as counter piracy and maritime territorial control, where large surface platforms are essential. In other words, the balanced fleet approach reflects the compromise between the needs of peacetime and wartime.

Thirdly, regional submarines provide a vital deterrence by denial capability. Southeast Asian submarines within their home waters, despite their small numbers, relatively little experiences, and less sophisticated technologies, would still pose a credible threat to intruding sea powers. An external sea power may have the capacity to absorb some losses, but these losses would stretch limited expeditionary capabilities, damage its national pride, and possibly affect domestic political decision making. Striking the home bases of these submarines would be an effective measure to lower their operational sustainability, but it would significantly escalate the situation during a crisis and threaten whatever argument for legitimacy the invader was trying to use to justify their actions.

There are some drawbacks in regional naval modernization. Although more and more capable surface combatants are joining the service, a great portion of the fleets have weak air defense and anti-submarine capabilities which makes them vulnerable to modern anti-ship missiles and submarines. Maritime patrol aircraft would provide the main method of surveillance, but are vulnerable and unable to conduct patrols in a hostile air space. Without maritime patrol aircraft, these regional navies would have limited surveillance capacity. Southeast Asian states possess fighters with airborne sea strike capability, and they may be able to respond to challenges from a ski-jump aircraft carrier with limited capacity and support. However, as all these fighters belong to air forces which focus and train for more missions than maritime operations, their jointness with navies would be limited. Due to these drawbacks plus the issue of relatively inferior quantity, maritime Southeast Asian countries have little room for escalation.

Gaining Support

The traditional methods of formal alliance may not successfully work with maritime Southeast Asian countries under the present context. Trade, investment, and other economic ties with China would constrain the willingness and likelihood of direct participation by maritime Southeast Asian countries in the FOIP Initiative. Moreover, Beijing is also endeavoring to develop and deepen security ties in the region, evidenced in arms deals, personnel exchanges, joint exercises, and other forms of interactions. However, it is possible to gain the contribution of regional countries to the FOIP Initiative, under their loose neutrality position. As maritime Southeast Asian countries have relatively less experiences in various military capabilities, the militaries of Quad members with rich operational experiences could provide more interaction based on the existing foundation.

Intertwined interests would be another significant motive for supporting the FOIP. Given their maritime interests and territory, Southeast Asian countries are likely to further expand their maritime capacity and the Quad members can supply proper assets and technologies to fill their existing shortfalls, while arms deals with logistical and training packages provide another channel to strengthen military-to-military relations. Last but not least, the Quad members, with their combined market share dwarfing China’s, should build up economic ties with maritime Southeast Asian countries. It would not be easy for regional countries to formally participate in the FOIP, but their cooperation or other positive responses would be the core of a strategy across the two oceans.

Shang-su Wu is a research fellow at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University in Singapore.

Featured Image: Marina Bay Sands Resort in Singapore (Wikimedia Commons)

Indo-Asia-Pacific

False Assumptions May Lead to Counterproductive U.S. Policy in the South China Sea

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By Mark J. Valencia

In his piece, Mr. Pham “lays out recommended ways and means that Washington can regain and maintain the strategic initiative in the Indo-Pacific.” However many of his recommendations are based on false assumptions and if implemented are likely to be ineffective and counterproductive.

Mr. Pham fears that “years of American acquiescence and accommodation may have eroded the international rule of law and global norms; diminished the regional trust and confidence in U.S. preeminence, presence, and constancy; weakened some of the U.S. regional alliances and partnerships; undermined Washington’s traditional role as the guarantor of the global economy and provider of regional security, stability, and leadership; and perhaps even emboldened Beijing to expand its global power and influence and accelerate the pace of its deliberate march toward regional preeminence and ultimately global preeminence.” But the rapid decline of U.S. soft power in the region is not due as much to “American acquiescence and accommodation” to China as it is to American political arrogance, cultural chauvinism, and a general lack of respect for its allies and ‘friends’ in the region  and their peoples. Its hypocrisy, interference in domestic politics, and support of brutal dictators did not help. It is now beginning to experience the inevitable blowback from this attitude and behavior and its reign as regional hegemon may be coming to an end. It may well eventually be replaced by China in the region, but for Mr. Pham to assert that China will attain “global preeminence” is premature at best. Indeed, if China does not learn from the American experience, it may well repeat its mistakes and suffer a similar fate.

Mr. Pham asserts that “Washington cannot back down now in the SCS. To do so would further embolden Beijing to expand and accelerate its desperate campaign to control the disputed and contested strategic waterway through which trillions of dollars of global trade flows each year…”  He assumes first that China can ‘control’ the South China Sea and two that such ‘control’ would threaten commercial freedom of navigation. But as Ralph Cossa, President of Pacific Forum CSIS, says, there is little to worry about, at least for the U.S. :“The South China Sea is not and will not be a Chinese lake and the Chinese, even with artificial islands, cannot dominate the sea or keep the U.S. Navy out of it.”  According to retired Admiral and former Director of U.S. National Intelligence Dennis Blair, “The Spratlys are 900 miles away from China for God’s sake. Those things have no ability to defend themselves in any sort of military sense. The Philippines and the Vietnamese could put them out of action, much less us.” More to the point, retired Admiral Michael McDevitt of the center for Naval Analyses asks skeptically, “What vital U.S. interest has been compromised? Shipping continues uninterrupted, the U.S. continues to ignore… their requirement for prior approval, our MDT with Manila remains in force…”

Regarding freedom of navigation, Mr. Pham and I have debated this before. I will only reiterate here that the two countries – one a ratifier of the 1982 UN Convention on the Law of the Sea – which elaborates the concept – and one not – differ on what activities are and are not encompassed by the term. China has not threatened commercial freedom of navigation nor is it likely to do so in peacetime. But the U.S. and Mr. Pham cleverly conflate the freedom of commercial navigation with the freedom to conduct provocative intelligence, surveillance, and reconnaissance (ISR) probes and then argues that when China challenges these probes it is violating “freedom of navigation.” Mr. Pham ignores the problem that because the Convention was a “package deal,” non-ratifiers like the U.S. cannot credibly or legitimately  pick and choose which provisions they wish to abide by, deem them customary law, and unilaterally interpret and enforce them to their benefit. This is especially so regarding the EEZ regime which UNCLOS introduces as sui generis, and which –contrary to U.S. military advice given to its naval officers – does have some restrictions on “freedom of navigation.” They include the duty to pay “due regard” to the rights of the coastal state including its marine scientific research consent and environmental protection regimes protecting as well as its national security. Moreover, China and the U.S. disagree on the meaning of key terms in UNCLOS relevant to the freedom of navigation and which are not defined in the Convention. Besides “due regard” these terms include  “other internationally lawful uses of the sea”, “abuse of rights”, “peaceful use/purpose”, and “marine scientific research.” The point is that the UNCLOS “rules” regarding freedom of navigation are not “agreed.” 

Another of Mr. Pham’s major assumptions is that “Washington has a moral and global obligation of leadership to further encourage and challenge China to become a more responsible global stakeholder…” The U.S. is no longer the world’s moral leader – if it ever was – certainly not from the perspective of China and much of Asia – if not the world. Moreover Mr. Pham’s statement reflects the cultural arrogance that has drawn the U.S. into endless wars—and should be disregarded on that basis alone.

These false assumptions are accompanied by several misleading statements. For example Mr. Pham alleges that China broke  “a 2002 agreement with the ASEAN not to change any geographic features in the SCS”,  and “…the 2015 agreement between Xi Jinping and Barack Obama to not militarize these Chinese-occupied features.”

First, the 2002 Declaration on the Conduct of the Parties in the South China Sea (DOC) does not contain such language and Mr. Pham is apparently interpreting its language for his own purposes. His interpretation is not shared by China, Vietnam, Malaysia, the Philippines, and Taiwan. All have altered the features they occupy to some degree since the agreement on the DOC. Second, according to China, President Xi Jinping agreed to no such thing. This statement repeats a biased interpretation of China’s President Xi Jinping statement regarding the “militarization” of the features. The original quote in Chinese was translated into English as “Relevant construction activities that China are (sic) undertaking in the island of South (sic)–Nansha (Spratly) Islands do not target or impact any country, and China does not intend [emphasis added] to pursue militarization.” That is considerably more ambiguous than Mr. Pham’s interpretation. Chinese spokespersons have since implied that if the U.S. continues its ISR probes, exercises, and Freedom of Navigation Operations challenging China’s claims there, China will prepare to defend itself. Given that the U.S. has continued these missions, it should come as no surprise that China has responded as it said it would.

Based on false assumptions, Mr. Pham essentially recommends U.S. military confrontation of China in the South China Sea. Such confrontation could lead to war—on behalf of others’ disputed claims to ownership of tiny features and resources there. That would not be in the core national security interest of the U.S.

Mark J. Valencia is an Adjunct Senior Scholar at the National Institute for South China Sea Studies.

Featured Image: Vietnam’s flag flies over the fortified Da Tay Islands in the Spratlys Archipelago. (Reuters)