Mr Blumenthal 3 6 06

Asian Responses to a Rising China: 

Asian Responses to a Rising China Dan Blumenthal Resident Fellow, American Enterprise Institute Presentation at University of Denver Center for United States China Cooperation

Topics: 

Topics China’s Strategic Behavior Unknowns Asian Responses American responses Dangers and Implications

Strategic Behavior: 

Strategic Behavior Build “Comprehensive National Power” Economic growth for regime survival Become more influential global player Create “multipolarity” Re-unification of “motherland” (e.g. Taiwan) Re-assurance/prevent counter-balancing Gradually replace United States as Pre-dominant Asian-Pacific Power?

Comprehensive National Power: 

Comprehensive National Power Economic, Diplomatic, Military in Unison Keep CCP in power Economy has doubled nearly three times over a thirty-year period Near annual 10 percent growth rates $250 billion volume of trade Foreign Exchange of over $600 billion per year

Comprehensive National PowerContinued.: 

Comprehensive National Power Continued. CCP must sustain these growth levels (at least 7%) to deal with social transition/unemployment E.g. Rural migrants in the tens of millions Could face a number of “fault-lines” (demography, resources, absorb surplus labor)

Comprehensive National PowerContinued.: 

Comprehensive National Power Continued. Economy needs natural resources to continue growth – petroleum in particular Growth of oil demand 90% in past decade Now consumes 6 million barrels a day – 40% of demand comes from imports (third largest crude importer) 40% of worldwide growth in oil demand attributable to China Expected to double consumption by 2025

Military Power: 

Military Power Rapid, ambitious military build-up program Annual % growth in defense expenditures exceeding annual % GDP growth DOD estimates expenditures three times stated figure of $ 28-30 billion a year Third largest in defense spender in the world. Economic growth/foreign reserves provide means Leveraging commercial technologies/high-tech base (e.g. IC for military computers, missile guidance systems)

Military Power: 

Military Power Strategy Near term aimed at Taiwan Coercive strikes: rapid, surprise, enemy centers of gravity Command and Control Ability of Taiwan government to function Limited force for limited aims Raise costs of U.S. intervention Anti-access, area denial Information attacks Hold carrier battle groups at risk

Military Power: 

Military Power Strategy Hardware 700 plus ballistic missiles together with cruise missiles hold air bases at risk. 4th generation strike aircraft Diesel submarines Soveremnys class destroyers C4ISR Information warfare Counterspace

Military Power: 

Military Power Strategy Software Revised organization structures (e.g., corps-brigade-battalion) Joint logistics system NCO corps since 1999 ROTC at top engineering universities By 2010 up to 40% of officer corps

Military Power: 

Military Power Strategy Longer-term DOD 2005 Report: changing regional balance of power DOD Quadrennial Defense Review 2006 “China has the greatest potential to compete militarily with The United States” Measured commitment to blue-water navy E.g. nuclear submarine program

Military Power: 

Military Power Strategy Major concern – energy security Dissatisfied with U.S. Navy as provider of security Projecting power in alternative ways “string of pearls”: allies and friends along the Indian Ocean naval ports, facilities Road and Rail Infrastructure

Diplomatic Prominence: 

Diplomatic Prominence Leveraging UN Perm 5 status Protect interests in Iran, Sudan Leveraging economic clout Pressure on EU to lift arms embargo Pressure on Australia to “relook” Anzus treaty Defeat human rights condemnations

Reassurance: 

Reassurance Good neighbor diplomacy Embracing multilateral institutions ASEAN plus 3 ARF Shanghai Cooperation Organization Bilateral FTAs (Australia; ASEAN-China FTA) 6 Party Talks Code of Conduct in South China Sea Play down military capabilities

Displacement??: 

Displacement?? Regional Fora that excludes United States East Asia Summit SCO Power projection capabilities Call into question credibility of U.S. commitments over time Military diplomacy/military aid Cambodia/Philippines

Unknowns: 

Unknowns China’s ultimate aims Sino-centric order in Asia? Accommodation with United States? “Peaceful Development” Military Build-up Only to “deter Taiwan independence?” Is China Democratizing? Does it matter?

How are Asians Reacting:The Counterweights: Japan and India: 

How are Asians Reacting: The Counterweights: Japan and India Japan Economic relationship robust, but checking China’s military power “Internal Balancing” economic recovery/resurgence GDP Growth of over 5% in three of four quarters in 2005 Reform of political/economic system less stagnation Alliance transformation, defense transformation $10 billion dollars in missile defense by end of decade U.S.-Japan combined air operations center at Yokata Similar ground forces center at Camp Zama

Japan…: 

Japan… Changing legal framework/stretching pacifist constitution Provided support to Operation Enduring Freedom Humanitarian Support to Iraq reconstruction Over thirty incursions by Chinese vessels into East China Sea Japan MSDF chased out a Chinese submarine in 2004 Though Shrine visits are not popular in Japan, “standing up” to China is Paradox: closer economic integration, more contentious diplomatic relations

India: 

India Historically suspicious of China, but.. Desirous of a China and America card While tilting toward U.S., getting closer to Beijing as well “Internal balancing” Aspirations to great power status Growth Rates of 6-7% over last decade

India: 

India Ambitious military modernization goals Navy: sea denial with submarine fleet, perhaps two carriers, cruise missiles Air Force has 40 Su 30s intends to buy 126 aircraft. Force multipliers: Phalcon, air to air tankers Army increasing firepower and mobility Strategic forces: medium range missile program (~3000 km) building Agni III (~3,500 km) plus missile defense; estimated 40-50 warheads Underfunded: defense budget has risen from 15.5 billion to 19.1 billion (around 2.75% of GDP) but for replacement and introduction of new systems not enough Particularly concerned by Chinese presence in “sphere of influence” Burma, Cambodia, Indian Ocean Wants more naval cooperation with U.S.

Southeast Asia: 

Southeast Asia Recipient of substantial Chinese attention China seeking to allay post Mischief reef/South China Sea fears of 1995 Economic benefits/economic competition China Asean trade grown from 2001 $31 billion to over $80 billion ASEAN-U.S. trade close to $128 billion

Southeast Asia: 

Southeast Asia Trying to bind China into ASEAN But, responsive to shoring up alliance with U.S. Since 1999 Visiting Forces Agreement U.S. once again allowed to train/conduct exercises in Philippines Singapore and U.S. strengthening defense ties Changi port hosts carriers Lee Kuan Yew “no combination of other East Asian Economies will be able to balance China. Therefore the role of America as balancer is crucial if we are to have elbow room.”

Taiwan: 

Taiwan Most economically interdependent yet feels most threatened China is Taiwan’s largest trading partner Taiwan exports into the mainland exceed $63.8 billion per year Military response has been mixed Up to 2003 second largest purchaser of military and services in the world Defense budget high but in decline Problems of democratic consolidation/consensus

Australia: 

Australia Improving alliance relations across the board ANZUS invoked for first time 9/11 Militaries more “interoperable” Australia is shifting to “expeditionary force” that can conduct coalition operation But trade with China is booming Merchandise exports to China increasing by 20% per year Target of Chinese pressure Divergence with U.S./Japan on China? Broke with U.S. on EU arms embargo

South Korea…: 

South Korea… Alliance adrift Making tough demands challenging traditional alliance understandings Divergent views on North Korea China taking advantage of rift Playing short and long term game But, alliance ties die hard U.S. – ROK FTA? ROK does not want to be irrelevant Tsunami response

United States: 

United States Seeking Cooperation but Hedging its bets “Responsible Stakeholder” Diplomacy Seeking cooperation on Iran, North Korea, “multilateral security issues” Closer economic integration China is America’s third largest trading partner Second largest source of merchandise imports (196 billion in 2004) Attempts at energy cooperation U.S. assisting with renewables, clean coal

United States: 

United States Hedging its bets Force re-posturing/countering the access denial strategy QDR “premium on forces capable of sustained operations in denied areas” Re-deployments to Guam Attack submarines and cruise missiles Six Bombers and over 40 fighter aircraft And, second carrier deployed to Pacific

United States: 

United States Shoring up alliances and partnerships Japan as linchpin Singapore, Australia India? QDR “achieve greater integration of defensive systems among its international partners in ways that would complicate any adversaries effort’s to decouple them”

Policy Implications: 

Policy Implications Dangers: Beijing’s economic links with Taiwan and Japan are highest in the region but… Political/security relations most contentious Politics trumping economics? If yes countries may have to re-look fundamental assumptions toward China As China’s power grows so will its ambitions? – lessons from the past

Policy Implications: 

Policy Implications Dangers: What if China does not democratize? Can America, a highly “ideological” country, accommodate it? Democracy = more transparency = less suspicion China’s patience with Taiwan runs out War would be catastrophic for everyone Social instability/lack of growth in China “Diversionary war?” Implications of a weak China

Policy Implications: 

Policy Implications Will “Responsible Stakeholder” policy work? Metrics offered to measure success or failure Will other countries go along, hold China to new standards? How does it fit with “hedging”? -- hedging indicates distrust History of rising powers