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CHINA AND THE FOREIGN MEDIA #523

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Graham Perry
Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

GOOD MORNING FROM LONDON

08 AUGUST 2024.  POST #523

CHINA AND THE FOREIGN MEDIA

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#1.   CHINA/US STOCKPILING – FOR WAR?

        ROGER BOYES IN THE UK TIMES

ROGER BOYES WRITES;-

When China was in full gallop the country’s industries gobbled up the world’s rare metals and energy. Now it is growing more slowly, yet it is still buying in huge amounts of commodities. Hoarding them for what exactly? A further bid to supplant the US in world markets — or something more sinister?

There are two conventional explanations. The first is that Beijing is following a long-term plan that will position it as the undisputed champion of the green revolution: a global leader in electric vehicle (EV) production, in solar panels and wind turbines.

Until now it has been the major refiner of lithium for EV batteries but has only hard-to-extract reserves of its own. Xi Jinping’s ambition is to take a commanding position in the whole supply chain. By 2029, 101 of the additional 136 lithium-ion battery plants planned for development will be in China.

That is the Chinese mercantilist playbook. It has recognised there is a potentially profitable gap between the Paris climate goals and the global production of the metals needed to produce EV vehicles and other planet-saving kit. That project has been given urgency by the possible re-entry to the White House of Donald Trump.

His tariff war on Chinese exports — Xi retaliated by imposing duties on American soya beans — marked the start of a miserable phase in US-Chinese relations, the first augury perhaps of the beginning of the end of China’s long rise.

A President Trump, the Chinese assume, will wind down the US commitment to Ukraine and focus on the containment of China. That could mean a regional flashpoint — tension over Taiwan, perhaps — leading to an attempt at a US-led blockade of shipping lanes on the approach to Chinese ports.

From that point of view, the current stockpiling by the Chinese authorities makes some sense. It’s not just defence-related minerals that are being bought in, not just gas and oil, but also wheat, maize and the soya beans that feed China’s 400 million pigs.

Here then is the nub. China is digging in not only for an open scrap for market share but also for a kind of siege led by a Trump administration determined to thwart Beijing’s cross-spectrum challenge to US power. The Chinese seem to be succumbing to the kind of blockade-phobia that gripped Europe in the late 1930s: a time of sanctions and counter-sanctions, trade embargos aimed at changing political behaviour, stockpiling and a drive for national self-interest

Warehouse space has been expanded massively, so have underground gas caves. Soya bean storage has more than doubled since 2018; China’s maize stocks will soon account for 67 per cent of the world’s total.

This is the point where fear of Trump’s unpredictable China policy intersects with a kind of war-readiness of its own. The lesson from the Ukraine war for Chinese military planners is that this is not the age of Blitzkrieg. Russia fired 11 million artillery shells against the Ukrainians in 2022 alone — the amount of copper contained in those shells was the equivalent of that used in 10 per cent of Britain’s total wind turbine capacity.

Just as Vladimir Putin failed to snatch Kyiv in the early days of his war against Ukraine, so a blockade or full-scale military invasion of Taiwan will not necessarily be the quick knockout blow deemed likely in tabletop exercises. The question, short or long war, thus haunts the Chinese military as surely as it dogged the German general staff in the first half of the 20th century.

The length of the Great War exhausted the generals; afterwards a detailed account of the performance of each service was compiled and deposited in a strongroom for the secret perusal of the next generation of military leadership. Given Germany’s lack of raw materials for arms production — the copper used in artillery shells, the nickel in armoured steel — how could the country expect to slog it out for as long as the Great War? That was an argument for Blitzkrieg, quick and mobile, followed by fuel substitution and synthetic materials and ersatz food, for the seizure of foreign oil fields and, above all, for long-term storage.

Or, one could argue, for not engaging in a long war in the first place. But China does not seem to be treading that path. Rather, according to US estimates, it is spending about $700 billion, just behind American levels of expenditure, on modernising its armed forces. It can now boast the largest navy in the world, the biggest coastguard and maritime militia, the biggest army and sub-strategic missile force, as well as significant advances in hypersonic missiles and quantum computing. Most of that has come to fruition on Xi’s watch.

Underpinning that hardware are the metals and minerals disappearing into China’s warehouses. That’s the copper wiring used in guidance systems, the nickel used in the armour plating of tanks, in military batteries and aerospace alloys, the lithium used not only in the electric limos purring down our high streets but also powering China’s intelligence satellites, the antimony handy for armour-piercing bullets and night-vision goggles. It’s quite a stash.

What do we do about it? We stop neglecting our own depleted stocks of metals and ammunition, we compete more strenuously with China in the “Lithium Triangle” of Argentina, Bolivia and Chile, and we stop looking away as Beijing develops 62 mining projects in lithium, cobalt, nickel and manganese.

Xi hints that 2027 is the target year for China “reunifying” with Taiwan. That’s when the world changes. Now’s the time, as they used to say in the trenches, to dig or die.

GRAHAM PERRY COMMENTS;-

What is the prism through which US/China tensions should be viewed? Is there a perspective that provides the tools to examine and assess current events, future actions and the ultimate outcome of this key contest?

We can view raw material hoarding, commercial initiatives and military build-up as part of the day-to-day responses to the evolution of new military groupings and alliances. Or we can stand back and adopt an overarching vision which offers a world view into which the day-to-day is injected

US Professor Graham Allison has provided the most reliable global guide to the ebb and flow of international events. First – The Theory. Second – The Practice.

Allison – who has the ear of Washington and Beijing – adopts the Thucydides Principle which states that war is likely when an established power is challenged by a rising power. Empires rarely leave the stage in an orderly manner and that being the case it is more likely than not that conflict between the ageing power – the US – and the rising power – China – will occur.

Thucydides stressed the conflict between the innovating, revolutionary Athenians and the slower-moving, ponderous Spartans. Allison adopted the Thucydides’ approach and examined sixteen incidents of international conflict from the late 15th Century to the present day and concluded that War had resulted in twelve of the sixteen conflicts.

The twelve that led to War and the four that did not lead to War were;

  1. Late 15th century Portugal vs. Spain — NO WAR
  2. First half of 16th century — France vs. Hapsburgs — WAR
  3. 16th and 17th centuries — Hapsburgs vs. Ottoman Empire — WAR
  4. First half of 17th century — Hapsburgs vs. Sweden — WAR
  5. Mid-to-late 17th century — Dutch Republic vs. England — WAR
  6. Late 17th to mid-18th centuries — France vs. Great Britain — WAR
  7. Late 18th and early 19th centuries — UK vs. France — WAR
  8. Mid-19th century — France and United Kingdom vs. Russia — WAR
  9. Mid-19th century — France vs. Germany — WAR
  10. Late 19th/early 20th centuries — China + Russia vs. Japan — WAR
  11. Early 20th century — UK vs. US — NO WAR
  12. Early 20th century — UK, France + Russia vs. Germany — WAR
  13. Mid-20th century — USSR, France, + UK vs. Germany — WAR
  14. Mid-20th century — United States vs. Japan — WAR
  15. 1940s-1980s — United States vs. Soviet Union —NO WAR
  16. 1990s-present — UK + France vs. Germany — NO WAR

We can conclude that military confrontations between an established power and a rising power are probable but not inevitable. Each case needs to be examined on its merits.

Today the US is the established power and China is the rising power but does this mean that the US and China are destined for War?

The West – the US and the EU together with varying support from Japan, South Korea and Australia and New Zealand – forms a coalition of countries who share a view that China, together with Russia, Iran and N Korea constitute a new Axis of Evil that threatens the post World War structure of world power. This new Axis needs, they say, to be confronted lest it be allowed to grow in power and influence.

It is significant that countries in the increasingly influential Global South represented by the BRICS initiative – Brazil, Russia, India, China and South Africa (now joined by Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) – have remained aloof and apart from the US/UK led Axis and have not even endorsed the West’s position on the Ukraine War. The expanded BRICS group has a combined population of approx. 3.5 billion people being 45% of the world’s inhabitants and the combined members are worth more than $28.5 trillion – about 28% of the global economy.

China has recognised for many years that it is regarded as a threat to the US. The Chair of US Joint Chiefs of Staff recently said – “China probably poses the greatest threat to our nation by about 2025”. Leading US politicians, academics have also spoken in similar terms. But onlookers need to distinguish between a military threat and an economic challenge. And here it is right to refer again to the remarkable discrepancy between the number of US bases around the world and the number of Chinese bases around the world. The score is 800+ for the US and just 1 for China.

Trade and flag is a key characteristic of Western Empires. One of the least mentioned aspects of World War II was the extent to which the US funded the UK War effort in return for the transfer by the UK to the US of UK military bases. World War II spelt the end of the British Empire and the arrival of the US Empire.

And it is appropriate at this point in the argument to recall that China has funded the worldwide development of ports, railways, airports and infrastructure through its Belt and Road Initiative in 150 countries to a total value in excess of US$1tn. A volume far in excess of US overseas investment.  And these funds have not been followed by any Chinese military bases or military personnel or weapons of any kind. This is very significant – but never commented upon by the media. Imperialism has always featured the expansion of trade and the expansion of the military. This applies to the US but it does not apply to China If China was determined to achieve world domination it would have ensured that every advance of funds to the 150 recipient countries was accompanied by a military agreement that permitted China to build bases and house Chinese troops and munitions. 

China’s position was recently made clear during the visit to the US of Liu Jianchao, the Head of the International Department of the Central Committee of the Communist Party of China (IDCPC), which has played a significant role in China’s foreign affairs. Liu is often referred to as China’s Second Foreign Minister.

Liu Jianchao, left, with Antony Blinken at the Department of State in Washington, 12 January 2024

Liu spoke at the Council on Foreign Relations and addressed misconceptions about China’s intentions in the international arena, countering narratives of China challenging US leadership and rising confrontation. He emphasised China’s strategic goals, with statements aimed to rebut theories predicting China’s stagnation and aggressive posturing due to internal and external pressures.

The emerging multipolar world order elevates China as a key player capable of influencing international power dynamics. The South China Sea’s strategic importance highlights the delicate balance between regional alliances and maritime claims, but China’s influence is being felt elsewhere – and a reduction in Sino-US tensions could hint at potential cooperation. Climate change is the most regularly mentioned, but other areas present as opportunities.

China’s clear preference is for a multipolar world structure emphasising shared interests and not a China dominated world with all other countries queuing up to paying political homage. China is a rising power and the US is a struggling power. The US needs to resist the temptation to try to “snuff out” China. Such a policy will ratchet up international tensions and more likely lead to open hostilities and a massive loss of life.

There is room enough for both the US and China to flourish but jaw-jaw has to replace war-war. China’s goal is not to hoard commodities in order to dominate the world. On the contrary it contends that Capitalism and Communism can co-exist. But whether that is possible depends on Washington and not on Beijing.  Continuing attempts by the West to demonise China will merely stiffen China resolve

Back now to Boyes’s two questions. First;- Is China hoarding commodities for the purpose of  becoming the dominant world power? The answer is unmistakeably in the negative. China has no ambition to oust the US from its position as the dominant world power. China’s economy will shortly become the largest economy in the world but China has no desire or intention to translate economic size into political domination. China knows that size brings influence – that is inevitable but size does not become domination unless the rising power pursues that path. China has said repeatedly that it will never become a Superpower.

And Boyes’s second question “Is China digging in not only for an open scrap for market share but also for a kind of siege led by a Trump administration determined to thwart Beijing’s cross-spectrum challenge to US power? The answer is unmistakeably in the positive. China is allowing for the possibility that a Trump administration – and a Harris one as well – will be determined to clip China’’s wings, to restrain its economic progress, to retard the well-being of the 1.4bn Chinese people, to impede its foreign trade and to lay siege to China’s East Coast ports. The established power will travel a long path to achieve its goal of putting down the rising power. The US has no alternative but to challenge China and that pursuit may become the 13th Thucydides conflict to lead to War.

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