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Sino-US Relations As Projected On Central And South-East Asia

Saturday, January 21, 2017 - 03:43

The specifics of the 2016 US presidential election lied not only in the publication of a large volume of information compromising the main candidates, but also in focusing the electorate's attention on the issues of the US foreign policy under the new administration of the White House. In this, there stand out not only the relations in the pair “Washington – Moscow,” but also “Washington – Beijing,” especially in terms of their cooperation in South-East Asia and, in particular, in the South China Sea.

 

The United States and China are among the key external actors in Central Asia. The transcontinental infrastructural and economic projects initiated by them are aimed at connecting these regions (South-East Asia and Central Asia) with a center either in Afghanistan, or in Xinjiang. Taking into account these factors, it seems appropriate to identify the peculiar features of the interaction between China and the United States as a whole and in each of these regions separately. This will enable us to determine the situation regarding implementation of these projects.

 

Worth noting, the Sino-US relation are of ambivalent nature. If we apply the mathematical terminology, this is an equation with two unknowns: it is necessary to determine the degree of partnership and the degree of competition. This situation is due to the fact that China and the US are each other's key trading partners. In 2015, the trade turnover between the two countries reached $550 billion. The US investment in China's economy amount to $77.47 billion, while the Chinese investments in the US economy total $46 6 billion. At the same time, China's Ministry of Finance predicts a fourfold increase in the volume of trade between the two countries in the next decade.

 

However, both countries have spare trump cards in terms of containment of each other's geopolitical ambitions. China is the largest holder of US Treasury bonds in the amount of $1.2 billion. In turn, the US is the main supplier of high-tech equipment to China, which the growing Chinese economy needs. Considering the fact that both China and the US are part of the nuclear club, the possibility of a direct military confrontation between them is minimal in the medium term.

 

Periodically, there are advanced mutual proposals on deepening cooperation and reducing differences in order to stabilize the global turbulence. However, in spite of this, a “non-zero-sum game” is developing between China and the United States as a result of the above-mentioned factors. This means, each participant receives a certain set of bonuses while simultaneously demonstrating its military and economic potential – mainly, in Central and South-East Asia.

 

In this regard, it is necessary to pay attention to Washington's fundamentally different reaction to two Chinese projects combined into a single geo-political initiative called “One Belt – One Road.” They are “The Great Silk Road Economic Belt” (GSREB) in Central Asia and the “Marine Silk Road of the 21 Century” (MSR) in Southeast Asia. The first does not give rise to unfavorable criticism on the part of the White House. On the other hand, implementation of the second project is actively discouraged by the US government within the framework of the rules of the above-mentioned “non-zero-sum game.”

 

As for the MSR, it is aimed at: a) creating the appropriate transport and logistics infrastructure on the coast of Thailand, Vietnam, Malaysia, Singapore, Indonesia, India, Sri Lanka, Pakistan, Iran and other countries it covers; b) establishing full control over the South China Sea in order to form the conditions of “the great rejuvenation of the Chinese nation.” Thus, we should emphasize the geopolitical aspect of the problem. On the one hand, not being able to preserve its influence in Southeast Asia, Washington will be deprived of the opportunity to position itself as a world leader. On the other hand, China's claims to control over the South China Sea are contrary to the logic of the geopolitical struggle between the “land” and the “sea.” Representatives of the Anglo-Saxon geopolitical school point out that the land powers should seek to establish control over the mainland, while the sea powers should seek to control the maritime areas that surround the mainland (the so-called “Anaconda” strategy). This was also pointed out by one of the leading American political scientists Z. Brzezinski. In his book “The Grand Chessboard,” he noted that the regional and global role of China is determined by its interaction with the maritime power (the US) and its ally Japan.

 

The South China Sea is not only a key global trading artery (annually, goods worth more than $5 trillion are transported via this sea), but also a channel for fast movement of the navies between the Indian and Pacific oceans. The actions of China aimed at constructing artificial islands and creating an air defense identification zone (the so-called Zone of limited and prohibited access) undermine the foundations of the American military hegemony in Southeast Asia.

 

In general, the US was satisfied with the formula “China's economy + US Army” in Southeast Asia, which allowed Washington to maintain a balance in its relations with the allies in Southeast Asia. These allies had access to the infrastructure development by being economically linked with China. However, they remained loyal to the United States in the matters of security, since the US provided them with military support. However, this balance was China's main problem in the region. Despite the active use of the mechanisms of “checkbook diplomacy” (promises of cooperation and multi-billion-dollar infusions into the economy) on the part of Beijing, the governments of these states were loyal to the United States.

 

In view of this, in 2010, Beijing began to take measures to strengthen its economic influence not only regionally, but also globally. For example, on January 1, 2010, there was established a free trade zone between China and the ASEAN countries. In 2011, Beijing embarked on a plan to switch to freely convertible yuan, which resulted in the signing of agreements with 13 countries (including Argentina, Indonesia, Malaysia, South Korea, India, Mongolia. Pakistan, Thailand, Vietnam, and others) on trade transactions in the yuan and the respective national currencies.

 

At the 2008 G20 summit in Beijing, ex-chairman of the CPC Central Committee Hu Jintao made a statement about the need for a new international financial order. According to the research results of the leading US think tanks, in 20 years, China may become a new world superpower. Considering these facts, China's above-listed actions are regarded by Washington as an attempt to shift the existing balance of forces in the region to Beijing and to start building a new world order as an alternative to the Western one. Washington is limited in terms of a sharp military buildup in the region, so its response was realized in 2012 in the form of an initiative to create the Trans-Pacific Partnership aimed at pushing China out of the region economically.

 

Meanwhile, the US attitude to the GSREB project is marked by actual indifference. Sometimes this indifference is breached by US experts' suggestions of a potential co-operation by pairing the “New Silk Road” (USA) and the GSREB (for example, for joint financing of the CASA). In particular, in his article in the journal Foreign Affairs, co-chairman of the Institute for Global Security Analysis G. Luft says that Washington should support those aspects of the project “One Belt and One Road,” which correspond to US interests, and oppose the aspects that contradict these interests, rather than trying to torpedo the project or completely avoid cooperation with China within its framework.

 

In order to explain the rationale for these recommendations, it seems appropriate to consider the data from a study conducted by the US Center for Strategic and International Studies. Its author A. Cooley notes that China is facing three major issues in Central Asia:

 

  • - the growing sinophobia against the background of the Soviet heritage and cultural alienation;
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  • - the delays in construction time and return on the planned infrastructure projects due to the high level of corruption in the elites of the Central Asian states (in particular, according to sources close to the PRC officials, Beijing itself anticipates a loss of 30 percent of its investments in the Central Asian region);
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  • - the unresolved border issues, which occasionally result in localized clashes among the local population, as well as the development of a network of informal trade barriers, which torpedo the cross-border freight traffic.

 

As an evidence of the importance of the last two reasons, A. Cooley cites the example of the Northern Cargo Delivery Network's (NCDN) functioning during the military operation in Afghanistan. He cites the findings of the study titled “The North Cargo Deliveries Network: the Golden Path to the Central Asian Trade Reforms.” According to them, the regional cross-border cooperation worsened during the NCDN period, since Uzbekistan, Tajikistan and Kyrgyzstan significantly increased the size of customs duties on goods delivered for the needs of the international forces engaged in promoting security in Afghanistan. Based on this, the authors of the study conclude that any transport corridors in Central Asia created by investors will not contribute to the formation of a single trade and economic system.

 

As a result, all of the above challenges create favorable conditions for the expansion of the US influence in Central Asia:

 

  • - Firstly, they torpedo the Russian EEU project, which is aimed at development of a single internal market and, consequently, at creation of a new competitor in the international division of labor;
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  • - Secondly, they undermine the Sino-Russian cooperation in terms of realization of both economic and military interests, as Beijing has been actively cooperating with the leadership of Tajikistan on the issue of providing financial and technical support for the construction of new checkpoints on the Tajik-Afghan border;
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  • - Thirdly, the Chinese capital is transformed into a catalyst of intraregional contradictions between the GSREB member countries;
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  • - Fourthly, China is actively spending its financial reserves, which, in the absence of any institutional design of the GSREB, enables Washington to “outbid” the loyalty of the Central Asian countries in the long term, considering their corrupted elites.

 

Meanwhile, we can assume that Beijing itself does not seek to create a unified Eurasian transport network. On the one hand, this is particularly pointed out by the fact that Beijing is actively funding Kazakhstan's national program “Nurly Zhol.” This program is aimed at development of the republic's transport and logistics infrastructure, which can be used the transit of Chinese goods. This occurs against the background of the lack of initiative among the Central Asian states in terms of simplification of the customs procedures during the passage of goods across their borders – both on the regional level, and within the whole EEU (restrictions remain on the Kyrgyz-Kazakh border). On the other hand, according to European experts, the overland transcontinental transport corridors initiated by China can not replace the maritime routes due to their capacity and the number of barriers. Thus, German expert T. Pulse indicates that the vast majority of Chinese goods will be supplied to Europe by sea, as before. According to him, Beijing needs the land lines as a mechanism for penetration in the new markets, as a way to increase its financial, economic and political influence in the CA region. Consequently, Beijing's main objective is to ensure: a) access to the infrastructure of the Central Asian region; b) financial enslavement of the Central Asian states.

 

Based on the facts stated above, the MSR represents a greater danger than the GSREB for realization of the national interests of the United States and maintenance of the US hegemonic status. In this perspective, the differences between the GSREB and the MSR can be represented in the form of the following list.

 

Comparative Analysis of the GSREB and the MSR through the Prism of the Interests of the United States

GSREB (Central Asia)

 

Economic potential: A region of below-average attractiveness due to: a) relatively small hydrocarbon reserves; b) land communications are less favorable than sea communications.

 

Military presence: Permanent presence in Afghanistan against the backdrop of China's in ability to establish its military bases due to the Russian factor.

 

Geopolitical specifics: What matters is not the economic and political ties, but the fact of presence in the region (Afghanistan).

 

MSR (South-Eeast Asia)

 

Economic potential: What's important is the control over one of the world's key sea lines of communication, and, as a consequence, the control over the world's trade and investment rules.

 

Military presence: There is a reduction in the impact of the military bases in the Philippines and the military cooperation with South Korea and Vietnam, while China is conducting militarization of islands in the South China Sea.

 

Geopolitical specifics: What matters is the fleet's mobility (access from the Pacific Ocean to the Indian Ocean).

 

 

Summarizing this analysis of the Sino-US relations in the light of their impact on Central and South-East Asia, the following points should be noted:

 

  • - Firstly, due to the fact that the economies of China and the US are in a symbiotic relationship, an open confrontation between them is impossible, even if there is a mutual intrusion into the sphere of each other's national interests. As a result, there emerges the phenomenon of “relations of false partnership.” Their necessity is reinforced by the nuclear capabilities of both countries;
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  • - Secondly, in view of the nuclear capabilities of both countries, their competition (especially in the economic sphere) reaches special acuteness in the South China Sea, which is intersection of the sea trade routes linking Asia, Europe and the Middle East. They who obtain control over these communications will obtain the right to establish the rules of world trade and, consequently, the world order;
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  • - Thirdly, the absence of criticism of the GSREB on the part of Washington is primarily due to the facts that: a) the United States has already secured their long-term presence in Afghanistan; b) this project will inevitably lead to increased tension in the Sino-Russian relations; c) the project's non-institutional nature creates the possibility for Washington to “outbid” the loyalty of the local elites, using the factor of the latter's corruption.


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