Don’t Go Overboard: China’s Naval Modernization & the US Response

With the impending launch of its first aircraft carrier, increasing out of area operations and territory disputes in the South China Sea, China’s naval modernization continues to be pertinent for Asia-Pacific security. On Monday March 12, I attended a book talk at Johns Hopkins University entitled “The PLA Navy: Expanding Capabilities, Evolving Roles”. The book can be downloaded here. The topics and perspectives given were strikingly similar to the February 2012 Congressional Research Service report on China Naval Modernization; however, the discussants were more optimistic about the future of US-China relations and the struggle for power in the Asia-Pacific. While the rise of China and its military capabilities may be inevitable, the decline of the US in the near term is not. This post will highlight several features of China’s naval modernization and its impact upon the American pivot toward the Asia-Pacific region.

The continued increase in naval spending by China (and India, for that matter) should be viewed as normal rather than a threat to regional stability. China’s naval modernization began in the 1990s and “encompasses a broad array of weapon acquisition programs, including programs for anti-ship ballistic missiles (ASBMs), anti-ship cruise missiles (ASCMs), land-attack cruise missiles (LACMs), surface-to-air missiles, mines, manned aircraft, unmanned aircraft, submarines, aircraft carriers, destroyers, frigates, patrol craft, amphibious ships, mine countermeasures (MCM) ships, hospital ships, and supporting C4ISR10 systems.” The effort also includes “improvements in maintenance and logistics, naval doctrine, personnel quality, education and training, and exercises.” (CRS, 3) A rising naval power does not always mean more conflict. At the time of its ascent, the US did not use its increased power with rivals the UK and Soviet Russia. It’s only fair that when a state develops economically that it should also be able to add new technologies to its capacity. China will be the last of the permanent UN Security Council members to obtain an aircraft carrier. A lot of fuss has been made about China reaching that level of naval strength, but it is not surprising that the state would seek out such capabilities. Even so, it will take the Chinese military time to learn to manage the carrier and to use it as an effective part of its defense.

According to panelists at the book discussion, a twenty-year long debate within the PLAN has shown that ‘there is no real strategy yet’. However, China is working to create a comprehensive strategy instead of relying on operational guides, and is likely to continue to expand its range and type of operations. Several of the emerging trends in China as noted by Christopher Yung have been submarine development, out of area operations (such as in the Gulf of Aden), operationalization of anti-ship missiles and the arrival of the aircraft carrier. New missions include naval diplomacy, the use of a hospital ship (great imagery with China’s flag in background assisting others), the PLAN being seen as the protector of the economy (vital to protect shipping lanes), and Hu Jintao’s ‘new historic missions’. The CRS report also noted that China’s naval modernization effort is increasingly directed in pursuit of the following goals unrelated to Taiwan:

  • asserting or defending territorial claims in the South China Sea and East China Sea;
  • enforcing China’s view that is has legal right to regulate foreign military activities in its 200-mile maritime exclusive economic zone (EEZ);
  • protecting China’s sea lines of communications;
  • protecting and evacuating Chinese nationals living and working in foreign countries;
  • displacing US influence in the Pacific; and
  • asserting China’s status as a major world power. (CRS, 4-5)

These goals are of course very realist in nature, as would be expected by American analysts and policy advisors. China’s naval modernization effort and pursuits of its interests are moving at a respectable pace, leading many eyes to watch developments in the Pacific as it develops a more comprehensive naval strategy.

Anti-access and area denial are American-introduced terms which are now used to describe attempts by China to prevent the US from intervening if China sought to attack Taiwan. The emerging maritime anti-access force is similar to the seadenial force developed by the Soviet Union during the Cold War to deny American “use of the sea or counter US forces participating in a NATO-Warsaw Pact conflict.” (CRS, 4) However, China’s force also includes anti-ship ballistic missiles (DF-21) with the ability to hit moving ships. “The basic idea is to prevent approaching US Navy aircraft carrier strike groups from getting within tactical aircraft operating ranges.” The US government views this as a method “to challenge US freedom of action within the region”. Observers herald the DF-21 a “game changing” weapon, because the US has not previously faced this threat from anti-ship ballistic missiles. China is somewhat conflicted in its desire to keep other states from intervening or being effective in the region (by utilizing its anti-access and area denial capabilities) and while also seeking to reach out to other regions. The potential for Chinese power-projection grows stronger as its naval power develops. A central tenet of the US policy of deterrence is believability, and so when it can the US tries to take a stern stance on China’s power projection in the region. The Obama administration’s tour of the Pacific last year including the harsh words sent to Chinese leadership and the stationing of US troops in Darwin, Australia contributed to the deterrence strategy. Moreover, the US already has Air Sea Battle plans to balance anti-access and area denial capabilities; the maritime strategy is apparently “not directed at any single country, but China is the only one with anti-access arms.” (CRS, 41)

Taiwan is only one security issue among many for China, and the probability for war between the two states is on the decline. To the PLAN event discussants, that meant there are more avenues and opportunities for cooperation between China and the US rather than armed conflict; it is difficult to imagine the two powers engaging in war over circumstances other than Taiwan’s safety. For example, freedom of navigation and the protection of shipping lanes would be of mutual benefit. For the CRS Report, even “in the absence of such a conflict…the US-Chinese military balance in the Pacific could nevertheless influence day-to-day choices made by other Pacific countries, including on choices whether to align their policies more closely with China or the US.” (CRS, 1) Once China’s aircraft carrier is fully functional, it will have a political as well as strategic impact on the region. Both the US and China are concerned about the ‘political evolution of the Pacific, which in turn could affect’ their abilities to pursue particular policies in the region and elsewhere. (CRS, 2) Budget cuts have affected other parts of the US Department of Defense, but the US government was clear that US Naval forces in the Pacific will remain strong.

With such different geostrategic environments the navies of the US and China have evolved and been used in different ways. The US Navy is not as concerned with protecting its coastline as the PLA Navy; not only are their perspectives different but their immediate security concerns vary. It is important for the US and China to maintain a dialogue of shared goals and concerns; as much as China’s military modernization has turned heads, so too has the US pivot to the Asia-Pacific.                       

Chinese Firm’s Investment Challenged – Crafar Farm Deal on Hold

Recently, the High Court of New Zealand overturned a decision by the Overseas Investment Office to allow Chinese company Shanghai Pengxin to purchase the Crafar Farms, sparking worries about the ability to attract future FDI, maintaining positive trade relations with China, and the situation’s implications for future partial sales of state owned assets. A new decision should be reached within days, with some foreseeing the inevitability of the sale due to the potential increased export business driven by Shanghai Pengxin’s connections. The court ruling in NZ and the frenzies surrounding the potential farm sale demonstrate our simultaneous fascination for and wariness of China. With significant experience in FDI and trade agreements, China can easily perceive the public relations issues and react with public diplomacy and economic incentives. This brief post is the first of a series examining the Crafar Farms case.

 China is NZ’s second-largest export market, and NZ is the only developed country with a free trade agreement with China. The Overseas Investment Office’s initial decision to approve Shanghai Pengxin’s purchase of Crafar Farms, then, according to some was swayed by Chinese lobbyists or an effort to keep trade relations blooming. In August 2011, Treasury and OIO officials met with the Chinese political consul to discuss foreign investment rules in NZ, but apparently did not discuss the Crafar Farms deal. In order for foreigners to gain ownership of ‘sensitive assets’, they must prove that their ownership will provide ‘substantial and identifiable benefits’ to NZ; Shanghai Pengxin attempted to display benefits, which were agreed to by locals and importantly, Fonterra. In the High Court ruling, however, Justice Miller stated that an overseas buyer not only has to prove such benefits to NZ, but they must “offer a deal more beneficial than any local sale”. In this case, he ruled that the OIO overstated the benefits which Shanghai Pengxin would offer to NZ. Tim Watkin illustrates:

“Like some robed bouncer, he’s told Shanghai Pengxin – and all potential foreign investors – that we have a dress code in this country and if they want to come in they’d better polish their shoes and put on their best suit. And given the value of productive farm land to our country’s wealth, our national identity and our great-grandchildren’s prosperity, that’s probably not a bad view to take.”

 In fact, the OIO decision originally established the following:

“The Chinese Government recently confirmed that it saw New Zealand as an attractive place for investment and was encouraging Chinese companies to invest in strategic assets such as dairy farms. If this Application is refused without convincing reasoning linked to non-compliance with the Act or the Regulations (which we submit is not the case), that decision will be widely reported both domestically and internationally and will be likely to send a negative message about New Zealand’s attitude towards Chinese investment and about whether the commitments made in the New Zealand-China FTA are being honoured.

“The transaction will also confirm New Zealand’s compliance with the New Zealand-China FTA and therefore enhance New Zealand’s strategic interests.”

 Strategic assets such as farm land will continue to be sold in NZ, and in fact much farm land has already been sold to foreigners as of late; over the past 18 months, 72 farms were sold to foreign buyers out of a total pool of 10,000 dairy farms and 35,000 sheep and beef farms. This statistic was noted by PM John Key in reaction to a new poll stating that 76 percent of voters want tougher restrictions on sales of land, including farms, to foreigners. With the media publicity, High Court ruling, trade relations with China being so critical and the significance of the dairy industry to the NZ economy, the Crafar Farm deal has struck a chord with New Zealanders that the Government is attempting to mask. Given that the potential New Zealand buyers are trying hard to win over the public and the courts, and that the Chinese government created a new fund to assist with financing international takeover bids, the public perception of the value of foreign direct investment will likely become a more consistent topic. The NZ Government, then should be transparent in its influence with foreign investors when they are in direct competition with locals for strategic assets.

US and China Outline New Year Policies Affecting Home and Abroad

The New Year has started with immediate action in the Asia-Pacific region and Sino-US relations. On January 1, Chinese President Hu Jintao published a highly charged article in the Communist Party journal Seeking Truth about culture and the threats China faces. On January 6, President Barack Obama stood alongside military leaders to launch his administration’s new defense strategy “Sustaining US Global Leadership: Priorities for 21st Century Defense”. Both events were media spectacles spurring speculation and hype among pundits. Across multiple fronts, the US and China are in a stage of ‘transition’, with the current administrations both facing potential (in US) and real (in China) leadership changes at the end of 2012. The contents of Hu’s essay and the Obama administration’s defense strategy demonstrate the leaders’ mutual need to shore up domestic support and enthusiasm.

For some in the US, Hu Jintao’s essay declared a new ‘culture war’ directed at America, harkening back to Mao Zedong. Hu wrote in the essay and speech: “We must clearly see that international hostile forces are intensifying the strategic plot of Westernizing and dividing China, and ideological and cultural fields are the focal areas of their long-term infiltration.” The Wall Street Journal argued that “Hu Jintao has launched another culture-rectification campaign with goals that Mao would recognize: step up ideological struggle and fight back against Western encroachments.” In a response to US reactions, the Chinese Culture Minister quickly replied by clarifying that 2012’s proposed ‘culture work’ does not mean it will “engage in so-called Great Leap Forward”. Instead, China’s plan is to perpetuate soft power and to promote internal and international stability.

I agree more with Damien Ma’s interpretation in The Atlantic that the ‘culture war’ is not meant as an implicit threat to the US. Rather, it is “part of a battle to sustain the confidence of its own people – via nationalist, Confucian tenets, wealth, cultural renaissance or whatever substitute that can be dreamed up — or risk the consequences. The war is, and has always been, about defining the soul of the modern Chinese nation.” Furthermore, the warnings are a call to the Communist Party to remain relevant to China’s populace. The forthcoming political transition at the end of this year and the Chinese population’s growing benefits from economic and technological development led to a fear of waning power and influence. Building on nationalist sentiments and stirring up the public by flexing its diplomatic muscle is one way for Hu’s Administration to calm its nerves.

Meanwhile in the US, the Budget Control Act of 2011 mandated that the Pentagon budget be trimmed by “by about $487 billion in the next decade, a roughly 8 percent decrease.”* The recent Defense Strategy Review is an attempt to redefine America’s strategic interests and goals, and to focus on priority areas for future funding. As the US reaches the last year of President Obama’s first term, withdraws military forces from Iraq and deals with a continuing government budget and wider economic crisis, the country faces a point of ‘transition’ which makes the time ripe for this discussion. By surrounding himself with top Pentagon officials, President Obama tried to strengthen his stance against an unwieldy Congress and direct an image of authority in an election year. The need to reduce the budget was evident on every page of the report, with the key being “Whenever possible, we willdevelop innovative, low-cost, and small-footprint approaches to achieve our securityobjectives”. (p. 3)

Interestingly, at no point in President Obama’s defense policy launch did he mention China. The Defense Strategy Review, on the other hand, warned that China’s emergence could affect the economy and security of the US in a number of ways depending on the path taken. Additionally, China’s military power growth “must be accompanied by greater clarity of its strategic intentions in order to avoid causing friction in the region.” In a menacing tone, the Review said the US would “continue to make the necessary investments to ensure that we maintain regional access and the ability to operate freely in keeping with our treaty obligations and with international law.” (p. 2)

As you can see, budget reductions are a priority, but they do not stand in the way of military readiness and competitiveness. In an effort to sound practical, the Review argued for a reduction in the “cost of doing business”, to which many Americans would agree. However military personnel have sacrificed much over the last decade and will bear the burden of budget cuts: “As DoD takes steps to reduce its manpower costs, to include reductions in the growth of compensation and health care costs, we will keep faith with those who serve.” (p. 7) Cutting health care benefits from veterans has not been as controversial as one may think in Congress however unpopular it may be to the American public; hopefully, this move is not foreshadowing irrational motives sparked by China’s emergence.

As Presidents Obama and Hu pit tough rhetoric against each other to hold or challenge the balance of power, they also seek to prove dominance to their domestic populations. Competing party and government politics have been the main driver of their warnings and stern tones. Economically, China and the US are so interdependent that the leaders’ domestic pandering should not affect their strategic relationship; the US in particular finished 2011 with a negative stance toward China, causing international headaches. But both powers share the mutual interest of stability, and while the US has less concern for other states’ sovereignty than China, the Obama Administration should prevent domestic issues and government in-fighting from leading to a dampened bilateral relationship.

Last year was, and no doubt 2012 will also be, a busy year for Sino-US relations and multilateral cooperation in the Asia-Pacific. On January 7, US Assistant Secretary of State Kurt Campbell arrived in Tokyo to discuss the situation on the Korean Peninsula and said “Even while the United States is making an adjustment in its global military posture, we are intent on maintaining a very strong, enduring military presence in the Asian-Pacific region”. China, likewise, intends to increase its diplomatic efforts this year and boost cooperation in the Asia-Pacific in issues of mutual interest; China’s government is anticipating high-level meetings such as the “Seoul Nuclear Summit, the BRICS Summit in India, the Asia-Europe Meeting in Laos, and the East Asia Summit in Cambodia”. During these meetings, China plans to “enhance strategic coordination and mutual understanding with Asian countries”. With both China and the US boosting diplomatic efforts in the Asia-Pacific, the hope is that eventually the two powers will forge a more cooperative and mutual partnership together instead of solely other neighbors.

A Hopeful ‘Turn’ Toward 2012

A series of critical events compelled the US to turn its attention toward the Asia-Pacific region in 2011. Natural disasters, leadership changes, protests, power struggles, China’s rise and American influence led the headlines. This tumultuous year foreshadows an eventful 2012 for those with interests in the region. Looking forward, states and their citizens should be prepared for continued political, economic and environmental disruptions.

Gripping Natural Disasters:

  • Flooding in Australia, Philippines, Thailand
  • Earthquakes in Japan, New Zealand
  • Water shortages in Tokelau and Tuvalu

Top Political Occurrences:

  • Death of Kim Jong Il and uncertainty for the future of the Korean Peninsula
  • Burma’s election of civilian government and promise of future elections with participation by Aung San Suu Kyi
  • China’s Peaceful Development white paper release
  • Disputes in the South China Sea
  • Political standoff in Papua New Guinea

Key US Initiatives:

  • President Obama and Secretary Clinton’s trips to the Asia-Pacific for bilateral and multilateral meetings
  • US ‘turn’ toward Pacific and “forward-deployed diplomacy”
  • Renewing and affirming alliances with Australia, India, Indonesia, Japan, Malaysia, Mongolia, New Zealand, Philippines, South Korea, Thailand, Vietnam

Strides toward bilateral and multilateral cooperation in trade and security have been taken in 2011 in the Asia-Pacific region. ASEAN and APEC are coming into their own, and the ASEAN Community has much to look forward to. Despite Canada leaving Kyoto, there is still hope for international climate agreements with the US, China and India beginning to accept their responsibilities. Furthermore, free trade agreements and regional trade agreements continue to gain momentum; the growing list of countries participating in the Trans-Pacific Partnership is a signal of the importance of regional trade and plans for continued growth.

International cooperation can appear to be wishful thinking with growing resource insecurity, continued border disputes, periodic political instability, increasing natural disasters and renewed aggressive rhetoric from the US and China. However, economic, political and social progress demands increased cooperation. Hopefully China can use its influence in the region and alliances with countries like Burma and North Korea for good rather than aiding authoritarian leaders in their maintenance of power and in the exploitation of natural and labor resources. Popular movements in the region, spurred on by current injustices, are also providing pressure for change from the bottom up. Together, these events could have a powerful impact on the plans for greater regional integration, security cooperation and economic development. Hopefully 2012 will be a year of cooperation for mutual benefit for the people of the region.

Biggest Polluters Sign on at Durban Climate Talks

 After nearly two weeks of United Nations climate talks in Durban, South Africa, a last-minute agreement was reached which proponents deemed an “historic breakthrough to save the planet”. Nonprofit organizations, politicians and others which lobbied for strict emissions cuts with consequences and a clearer roadmap, on the other hand, denied that a real “deal” was reached, claiming the delegates “watered things down so everyone could get on board” and even that it was a “failure”. In the final moments of the meeting, the ‘Durban Platform for Enhanced Action’ was delicately worded so all countries could accept the legal form, however begrudgingly. The big news is that China, India and the US – the three largest greenhouse gas emitters not covered under Kyoto – finally accepted that the rest of the world (including the climate) could not wait any longer for them to act and to be held accountable.

The US has typically been against signing onto any legal framework or targeted emissions cuts unless China and developing nations also take part. China has argued that it is still a developing country and should not be held to the same emissions standards as the US and Europe while it continues industrialization. However, the European Union and smaller countries (particularly those that will be significantly impacted by climate change) grew tired of the lack of participation by the world’s largest emissions emitters, and coerced China, India and the US to agree on language that would give all parties mandates for compliance. The Platform constrains all parties to “a protocol, another legal instrument or an agreed outcome with legal force” to be decided in 2015 and that will come into force in 2020. For those countries most impacted by climate change, the long wait for enforcement in 2020 will not be soon enough to mitigate droughts or floods, or to save some small islands states (which are plentiful in the Pacific) from rising sea level.

As the “only binding climate instrument with specific emission targets”, the Kyoto Protocol commits the worst emitters to reduce emissions, with a heavier burden placed on developed countries. As the Kyoto Protocol is due to expire next year, the Durban talks kept the agreement alive, with the EU agreeing on a second commitment from 2013 “so that the world has a legal treaty to cut emissions in place before 2020”. The EU has taken pride in their leadership role in reducing emissions to mitigate climate change, even when Canada, Japan, Russia, and others are not ready. The European Parliament’s environment committee chairman suggested that the US and China have been playing a “ping-pong game” which “hijacked” the past three climate meetings. Nonetheless, the Europeans believe their diplomatic efforts have successfully put China, India and the US on “a roadmap that will secure an overarching deal”.

The ‘roadmap,’ will take time to develop. Between now and 2020, only Europe and a few developed countries “are legally bound to cutting carbon emissions through a second commitment period of the Kyoto Protocol.” Given that the economic crisis has made many Americans feel that climate change is no longer an important issue it is difficult to foresee the US following through and signing onto an eventual legal framework. Meanwhile China, India and the US only have voluntary targets to follow until 2020.