Abiding US suspicions of China - Stratint Review, 13 March 2008

The latest annual report to Congress by the US Secretary of Defence on the “Military Power of the People’s Republic of China” reinforces an impression of continuing US suspicion about China’s rise. The following is an abridged version of an assessment first published in SIR’s associated Asia Intelligence Service (in the March issue of AsiaInt North Asia Review).

The media coverage of the latest Pentagon report on China’s military power has focused mainly on allegations of Chinese cyber-spying, on the true level of Chinese military spending along with its rate of increase (17.6% this year), and on the development of weapons and jammers to prevent the use of space-based systems at times of conflict or crisis. The report said that China is “exploring satellite jammers, kinetic energy weapons, high-power lasers, high-powered microwave weapons, particle beam weapons, and electromagnetic pulse weapons for counter-space application”.

These points are a good reflection of US concerns about China. However the most interesting part of the Pentagon report is the section on “understanding China’s strategy”, for it is this section that reveals US views about China’s long-term intentions rather than just its present capabilities and activities.

The section begins with the well known quote from Deng Xiaoping known as the “24 character strategy”. Deng’s injunction was to “Observe calmly; secure our position; cope with affairs calmly; hide our capacities and bide our time; be good at maintaining a low profile; and never claim leadership.” This “24 character strategy” is seen as suggesting a strategy “to maximize future options”, and, according to the Pentagon report, President Hu Jintao’s “Harmonious World” theory, endorsed at the October 2007 17th Party Congress, “does not overturn or supersede Deng’s ’24 character strategy’”.

The Pentagon goes on to argue that the CCP has come to rely on economic performance and nationalism “as a substitute for the failure of communist ideology to unify the population and mobilize political support”. The danger is that if economic growth falters, an even higher reliance on nationalism will be necessary.

It also clearly believes that economic performance will indeed falter because of underlying weaknesses such as non-performing loans, inefficient state-owned enterprises, and economic disparity between urban and rural areas. The report warns: “Economic shocks, setbacks, or even modestly slower growth could lead to higher unemployment, inflation, and significant unrest, potentially giving rise to greater reliance on nationalism to maintain popular support for the CCP.”

One interesting point the Pentagon report makes on a potential economic crisis is the fact that China’s leaders have limited experience in dealing with a correction or recession in a complex market economy, and “it is not certain whether their responses would ease or exacerbate temporary dislocations”.

In addition to the danger of a recourse to nationalism, the Pentagon report points out that China has legitimate national interests that are pushing it towards a greater military capability, particularly in the area of energy security given that its oil consumption will rise from 7.58m barrels of oil per day to 10m-12m bpd by 2015. At current levels of consumption it is already importing 53% of its oil, with slightly over half coming from the Middle East and a quarter from Africa.

The Pentagon notes that currently China is not capable of using military power either to secure its foreign energy investments or of defending critical sea lanes against disruption, but it then argues that China may seek to close this gap by “developing extended-range power projection, including aircraft carrier development; expeditionary warfare; undersea warfare; anti-air warfare; long-range precision strike; maritime C4ISR; expeditionary logistics and forward basing; training and exercises, especially in open water; and a more activist military presence abroad.”