China
Last Monday, China exploded a rhetorical bombshell that still
echoes. In an 11,000 word White Paper on Taiwan, Beijing's Foreign
Ministry stated that Taipei's indefinite refusal to negotiate
reunification would force Beijing to "adopt all drastic measures
possible, including the use of force."
Washington immediately split into two schools of thought. One
viewed the White Paper with a yawn, as nothing more than a warmed-
over restatement of policy. Beijing has always maintained that
Taiwan is part of China. Force has always been an option. Taiwan
holds elections next month; and it was during the previous 1996
elections that Beijing hurled missiles into the Taiwan Strait to
dampen sentiments for outright independence. The other school of
sensed a seismic shift. Beijing had long threatened violence in the
event of Taiwan declaring independence; now force could be used
merely for refusing to sit at the bargaining table.
In fact, the White Paper is a significant but entirely tactical
move in a much larger strategic game - one that has comparatively
little to do with Taiwan. Why do U.S.-Chinese relations
consistently progress forward one step - and then fall back
another? The two governments are pursuing entirely different
agendas. The Clinton administration is trying to build stable,
bilateral ties with Beijing only to be frustrated by the fact that
Beijing is attempting to rein in American behavior. The White Paper
is Beijing's version of classic, balance-of-power politics.
Consider very recent history, from the Chinese point of view. In
1999, four events sank relations between Beijing and Washington to
rock bottom. On May 7, 1999 - in the midst of the Kosovo conflict -
a U.S. B-2 bomber struck the Chinese embassy in Belgrade. Scandal
over Chinese espionage in America indicated that the U.S. political
atmosphere was turning poisonous. Beijing's attempt to fortify its
regime against internal critics triggered intolerable criticism on
human rights from Washington. And a worsening economy prompted
Beijing to care progressively less about what Washington thought.
Relations sank to a historic low.
Viewed from Beijing, the United States was not only powerful - the
world was unipolar the moment the Soviet Union collapsed - but now
dangerously unpredictable. To control American behavior, China
needed to turn the world into a multi-polar one. Indeed, this
appears to have been China's strategy all along.
Too weak to serve as a counterweight, China cast about for help.
The obvious partner was Russia and in the summer of 1999, events
suggested that the Russians might want an alliance. But building a
coalition was neither simple nor straightforward. Each nation
proved more interested in extracting concessions than challenging
the American balance of power. Indeed, China's view of Washington
was overly complex, believing that various factions - the military,
Congress, the Clinton administration - could be played off against
one another.
As 1999 turned into the year 2000, China's efforts were further
complicated by two extreme - and opposing - views in Beijing. One
held that the policies of Deng Xiaoping were correct and that the
economic crisis was a mere bump in the road. The other held that
Deng's policies had failed and threatened to destabilize China. One
argued for intensifying reform and engagement with the United
States. The other responded by strengthening the traditional
institutions of party, army and security apparatus, calling for
disengagement, insularity and confrontation. President Jiang Zemin
balanced precariously in the middle.
The Clinton administration recognized two risks. Not only was the
anti-American faction in Beijing growing stronger, but Beijing and
Moscow were growing closer than any time since the Sino-Soviet rift
of the 1960s. With the rise of Vladimir Putin, now Russia's acting
president, Moscow there was little leverage in Moscow. So
Washington focused on Beijing. This was what Beijing wanted. In any
three-player game, the goal is to become the swing player who can
alternately bridge the other two, extract concessions and make
certain that neither allies with the other.
The American diplomatic offensive in Beijing reached its crescendo
a week before the White Paper was released. On Feb. 17 and 18, a
high-level U.S. delegation visited Beijing, led by Deputy Secretary
of State Strobe Talbott. In tow was the vice-chairman of the Joint
Chiefs of Staff, Air Force Gen. Joseph Ralston and Deputy National
Security Advisor James Steinberg. With an obvious tilt toward
security issues, it appears that the talks focused on the sale of
U.S. weapons to Taiwan, particularly new destroyers and a theater
missile defense.
The mission took place against a larger backdrop in U.S.-Chinese
relations: debates in the U.S. Congress on providing Beijing with
Normal Trade Relations (NTR) status as well strengthening security
ties with Taiwan. Finally, the U.S. State Department, on
bureaucratic auto-pilot, issued its annual human rights report on
Friday, condemning the Chinese for human rights abuses.
The White Paper is the backhanded Chinese response to Washington on
all these fronts. It rebuffs the high-level mission, endangers NTR
status - and with it membership in the World Trade Organization.
Over the weekend, Beijing released its own human rights report
entitled, "U.S. Human Rights Record in 1999," condemning the U.S.
record on human rights. About 10,000 words long, the document was
clearly prepared in anticipation of the U.S. report. Knowing what
was coming, the Chinese knew to fire back.
Across the spectrum, relations between Beijing and Washington
appear to be returning to the nadir of last summer - after the
bombing, the spy scandal and everything else. Not only has the
American strategic problem not been solved, the situation is
deteriorating. Washington appears to be scrambling to patch up the
bilateral relationship. Navy Adm. Dennis Blair, commander of U.S.
forces in the Pacific, is in Beijing. The visit was scheduled
before the release of the White Paper but the decision to proceed
indicates that the administration does not want the relationship to
falter. Indeed, President Clinton warned on Friday against linking
NTR status with the Taiwan White Paper.
There appear to be two explanations. The first is simple: the
leadership in Beijing is aware of the Clinton administration's
desperate need to salvage the U.S.-Chinese relationship. And so the
price keeps going up and up and up - from NTR to WTO status to
Taiwan. China can also manipulate American concern, particularly
about an alliance with Russia, to thin the relationship between
Washington and Taipei - just enough to snuff out ambitions for
independence. On this score, Beijing may be miscalculating. There
could be a backlash in Washington.
China's unpredictability can also be understood through a second
and complementary explanation: domestic politics. Hard-liners in
Beijing doubt the value of economic relations with the United
States. Given the state of the economy, NTR and WTO status are a
day late and a dollar short anyway. By forcing the Taiwan issue,
they can rupture economic ties and cut the ground out from under
reformers. If the United States backs off, the hard-liners can take
credit for increased leverage on Taiwan - and for controlling the
United States.
We do not expect China to invade Taiwan.
[http://www.stratfor.com/asia/commentary/0002252352.htm]
A threat toward Taiwan - imminent or not - is not trivial,
particularly given the strained deployment of U.S. forces around
the world. But a fight in the strait right now is not the core of
China's strategy.
The White Paper ultimately is not about Taiwan; it is about
positioning China relative to Russia and the United States so that
China can maximize room for maneuver and concessions from other
players. It is a classic diplomatic maneuver, well played.
The United States has two moves with which to counter. It can move
closer to the Russians. A less obvious move is to simply refuse to
play. Vastly more powerful, the United States can refuse to engage.
By doing so, it would arm Taiwan, refuse NTR status, scuttle WTO
membership - and generally behave as if China doesn't matter.
Washington would risk a Moscow-Beijing alliance, but that is likely
anyway.
Indeed, refusing to play with China - while opening to the Putin
government in Moscow - might put the United States into the coveted
swing position of the three-player game. But diplomatic nimbleness
has not been the mark of the Clinton administration. It seems
especially unlikely when everyone appears to be a lame duck.
The inattention of the administration, along with a lack of
strategic coherence, is the thing to which China is playing. It is
playing well.
At the National People's Congress meeting this week in Beijing,
Chinese legislators discussed the need to build up a strategic oil
reserve. The head of one of China's state-run oil firms presented
the proposal, citing crude oil reserves as a necessary economic
safeguard against fluctuations in world oil prices, reported
Xinhua.
The Chinese government has been a net oil importer since 1995 and
is anticipating an increased dependence on foreign oil. But the
threat of an erratic market is not the only reason for establishing
strategic oil reserves. The Chinese have another driving concern:
the potential for enemies to obstruct the flow of oil to the
country. The urgency with which China is seeking to resolve its
energy crunch suggests that Beijing may be anticipating a day when
its agenda - for example, reunification with Taiwan - clashes with
those of other international players.
China understands that it cannot remain completely self-reliant.
Although coal satisfies approximately 75 percent of its energy
needs, oil demands have outpaced domestic supply and will continue
to grow approximately 4 percent to 5 percent per year through 2015,
according to the U.S. Department of Energy. Meanwhile, the
country's largest domestic oil source, the Daqing field, is mature
and expected to decline in production. While offshore oil sources
remain promising, the grand expectations of Xinjiang production
have failed to pan out.
China's lack of strategic crude oil reserves could threaten its
national interests. Having reunited with Hong Kong and Macao, China
now appears ready to focus its attention on Taiwan. Taiwan
elections are approaching, and China is once again beating the war
drums to reunify with Taiwan. But this year, the Chinese People's
Liberation Army took its rhetoric a step further by setting an
ambitious seven-year timetable for reunification. Until Beijing has
a secured reserve, countries that want to prevent an invasion could
deny China its access to oil.
Given China's ambitious, energy-intensive plans for military and
naval expansion, the country must expand its resources extensively.
Although many industries run on coal and hydropower, the machines
of war - tanks, planes, trucks and ships - cannot. Creating the
reserve will be no small task. At today's oil prices, a 90-day
reserve to satisfy China's current demand of 4 million barrels per
day would cost more than $10 billion - about the same amount as its
official defense expenditure for 2000.
But building up an oil stockpile scratches only the surface of the
country's strategy. Beijing must also develop reliable sources of
foreign oil. Some of the momentum behind the emerging strategic
alliance with Russia derives from China's oil needs. By carving out
a solid diplomatic relationship with a country that can supply oil
over land, China helps ensure that its resources won't be
jeopardized by conflicting interest.
http://www.stratfor.com/SERVICES/giu2000/030300a.ASP
Currently, plans exist for several oil and natural gas pipelines.
Two oil pipelines are under consideration, one originating in
Russia and the other in Kazakstan. They would begin construction
within the next five years and would each supply about half a
million barrels per day - not enough to keep up with the projected
demand.
Beijing will probably have to resort to importing oil by sea, where
the potential for interference makes the supply far more
vulnerable. Already, there are plans to import natural gas from a
port in Shenzhen, on China's southeastern coast. China's green-
water naval development will become increasingly crucial as the
country shifts toward reliance on the sealanes to supply its energy
needs. http://www.stratfor.com/SERVICES/giu2000/012600.ASP
Without a stable oil supply, China cannot sufficiently expand its
forces to achieve its strategic goals. Yet, expanding its forces -
in particular, its navy - is critical to creating that stable
supply. Until China can better control the seas, it will
concentrate on land sources of oil; partnerships with oil-producing
nations like Russia will become essential. As China's oil needs
increase, it must take on a far more assertive regional role - or
at least, as assertive a role as it can afford.
So far, a definitive date has not been set for a Putin-Jiang
summit, though all indications suggest it will occur between the
March Russian presidential elections and the July G8 summit in
Japan. The long-planned Sino-Russian summit, postponed several
times in 1999, took place in name only during a brief visit by
Russia's former president Boris Yeltsin to Beijing in early
December (http://www.stratfor.com/services/giu/120799.asp).
Moscow has indicated that one of the first foreign visits of the
next Russian president will be to China.
While Moscow has planned for Putin to visit China, Beijing has
appeared for the most part aloof to pre-summit preparations.
Although projecting an image of aloofness is not an unusual
negotiating tactic for the Chinese, deeper reasons may exist for
China's apparent lack of interest in the summit.
Despite long preparations for a Sino-Russian summit, China was
apparently caught off guard by Yeltsin's New Year's Eve
resignation. As late as Dec. 30, China's ambassador to Russia was
still talking about prime minister-level talks in spring 2000
between Putin and Zhu Rongji in Beijing, giving no indication of an
imminent power shift. Further, the Hong Kong magazine Kai Fang Feb.
1 cited "well-informed sources in Beijing" who said Jiang and other
upper-level Chinese Communist Party officials were "immensely
shocked" by the news of Yeltsin's resignation.
Not only does this suggest that Moscow was not entirely open with
Beijing, it also demonstrates a severe failure on the part of
Chinese intelligence, if the report is accurate. China's lack of
awareness of a major change of power in Russia - while working on a
strategic partnership to counter U.S. global hegemony - is a clear
sign that Beijing is preoccupied with other issues.
While it was increasingly apparent in fall 1999 that Moscow was
undergoing a change in leadership
[http://www.stratfor.com/SERVICES/GIU/081099.ASP], China was
preoccupied with internal instabilities: the
Falun Gong and the country's 50th anniversary
celebrations, the repercussions of the U.S. bombing of the Chinese
embassy in Belgrade, Taiwan President Lee Teng-hui's declaration of
"state-to-state" relations and World Trade Organization
negotiations.
China's leaders are now trying to understand what is happening in
Russia and whom they are dealing with in Moscow. Despite shared
interest in being able to counterbalance U.S. global reach, both
are concerned that the other will ally with the United States and
both have an interest in maintaining ties with the United States
for economic reasons. Pressing domestic concerns in both countries
further impact the realization of the Sino-Russian strategic
alliance. As China and Russia edge closer to a presidential summit,
China will remain wary of Russia, holding off any formal commitment
until after Moscow's elections.