The US-China-EU-India-Japan Strategic

1
Leergang Topmanagement Defensie,
Clingendael, 7 April 2008
The US-China-EU-India-Japan Strategic Pentagon
Willem van Kemenade www.clingendael.nl
E-mail kemenade_at_xs4all.nl
2
Portrait of Chinese
Reform-Communism 2008

• State-capitalism without functional rule of law.
• Property-rights have only been incorporated in
  2002-2003 again in the Constitution and
  legislated in 2007 in greater but inadequate
  detail in a new Property Law
• No adequate pensions, no real labour unions and a
  poorly functioning taxation system.
• Economic growth mainly financed by banks who
  transfer the savings of peasants to continue
  lending to state-owned enterprises.
• The rest of the world cannot continue absorbing
  Chinese exports at their current growth-rate
  forever.
• China cannot continue endlessly with the
  accumulation of forex reserves and function as
  banker of last resort for the US.
• China has to become a normal economy, with high
  internal consumption, lower savings and more
  efficient state enterprises.

3
Political Liberalization ?

• China has evolved from a totalitarian
  Marxist-Leninist dictatorship to a nationalist,
  conservative, selectively repressive,
  authoritarian state.
• Resilient authoritarianism (Andrew Nathan).
• All-embracing goal is Building a Harmonious
  Society (Neo-Confucianism).
• Biggest problem is to get new top-talent in the
  party. The best and the brightest work for
  multinationals and local private sector.
• Optimism that engagement, internet,
  globalisation, WTO-accession, prosperity, urban
  middle class and low-level elections would lead
  to democratisation at the national level, has not
  materialized as yet.

4
No Elections, but Selections

• Chinas regime is no longer a rigid dictatorship
  without checks balances like under Mao.
• The leaders are not elected by the people, but
  selected by the party-elite
• The Selectorate
• Party 70.8 million members
• Party Congress (2120)
• Central Comite (198 alternates)
• Politbureau (23-24)
• Standing Committee (9)
• The most powerful cluster of organisations under
  de CP is the so-called Control Cartel
• Organization Dept., Propaganda Dept., Ministeries
  van Staats- en Openbare Veiligheid, PLA en PAP.
• As long as the party controls the gun and the pen
  its power is assured.

5
Tibet

• China has known stability since the violent
  repression of the Tiananmen student-rebellion
  in 1989. Now the virtuous cycle seems to have
  come to an end.
• In 1989, the wave of unrest started in Tibet,
  preceded by major political developments.
• The Tibetan cause was petering out due to
  spectacular economic development and increasing
  curtailment of the Tibetan exile movement in
  India.
• Late last year, it was widely anticipated that
  all so-called anti-China forces, the Tibetan
  Exiles, the Taiwanese and Uygur independence
  hardliners, dissidents, Falun Gong and Human
  Rights organisation, would unite to cause one
  Public Relations Nightmare after the other to
  China and deprive it of its Olympic glory.

6
Chinas Defence Budget 2008

• China's military budget for 2008 will increase by
  17.6 to 417.77 bn yuan, or 58.8 billion. This
  follows a 17.8 increase in 2007.
• Jiang Enzhu, spokesman of the NPC said on March
  3, 2008 that the moderate increase in spending
  this year was purely defensive and would allow
  for upgraded equipment along with better pay and
  benefits for service personnel.
• Experts in the US say that Beijing's real defense
  spending is two or three times the announced
  figure and that these sustained increases have
  put China on track to become a major military
  power, most capable of challenging U.S. dominance
  in East Asia.
• The Pentagon said China announced a military
  budget for 2007 of 45 billion but estimated
  total military spending for that period at
  between 97 billion and 139 billion.
• Since the recent presidential election in Taiwan
  has significantly reduced the chance of military
  conflict, it will be interesting how high the
  increase will be next year.

7
China and the US Partners on Global
Issues

• While visiting China in February, S.o.S.
  Condoleezza Rice said I'm quite certain that
  when China and the United States co-operate, we
  are better able to resolve some of the really
  complex and difficult issues that face the
  international system.
• She singled out the N.-Korean nuclear issue,
  Myanmar and Darfur but not Iran !
• Ms. Rice also criticised a plan by Taiwan to
  stage a referendum on membership of the UN.
• In January, Indian PM Manmohan Singh had visited
  Beijing, stating that India would not be part of
  any US-led effort to contain China.

8
Gates went to China before Rice and before he
went to India

• On an official visit to Beijing on November 5,
  U.S. Secretary of Defense Robert Gates netted a
  small victory for Washington. Gates and his
  Chinese counterpart Cao Gangchuan agreed to
  develop a live hotline between their
  militaries. The hotline, a first of its kind for
  Beijing, is seen as evidence of increasing
  stability and transparency in Sino-American
  relations.
• Likewise, Washington too has become increasingly
  disgruntled with Taiwan's military development,
  noted by the failure to build an adequate
  defensive posture (through the purchase of U.S.
  weapons) and the vocal development of a cache of
  long-range cruise missiles. Dubbed the Hsiung
  Feng IIE, Washington fears its development will
  be seen as an offensive measure in Beijing.

9
US-India Stronger Defense Ties Not in context
of China

• While visiting India late February, US S.o.D.
  Robert Gates said I dont see our improving
  military relationship in this region in the
  context of any other country, including China.
• Gates rejected suggestions that efforts to
  improve relations with other militaries in the
  region were aimed at China. He said the Pentagon
  wanted to bolster the ability of the US and
  Indian militaries to cooperate on issues such as
  piracy, terrorism and providing disaster relief.
• Pentagon official There is fundamental
  commonality of interests between the US and these
  three democracies (Australia, Indonesia, India)
  There are reasons for having interoperable
  weapons systems ... not in an aggressive sense
  but certainly as a hedge.

10
Gates Main Purpose was Defense Trade

• These expanding relationships don't necessarily
  have to be directed to
  anybody. They are a set of
  bilateral relationships that are aimed at
  improving our coordination.
• Gates' talking points in Delhi related primarily
  to defense trade. India's procurement of 126
  multi-role combat aircraft in a deal estimated at
  10 billion - and possibly, as high as 16
  billion - was number one priority for him.
• The principal bidders include Lockheed Martin's
  F-16 and Boeing's F/A-18 Super Hornet.
• The importance of the deal is not only
  commercial, but that the new generation aircraft
  will be in use with the Indian Air Force for the
  next 40-year period and, therefore, clinching the
  deal becomes absolutely vital for the US if it is
  to aim at inter-operability.
• Deal for six Lockheed C-130J cargo aircraft just
  concluded.
• The Russian are engaged in a cut-throat
  competitive bidding spree.

11
China, India and their major arms suppliers
Russia and Israel

• Since the 1990s, Russia supplied China with SU 27
  and SU 30 fighters, submarines and Sovremenny
  destroyers.
• In 1980s, Israel has been a covert supplier of
  advanced military technology, estimated at 4 bn
  to China, dodging US objections.
• Israel came under US pressure in 2000 to scrap a
  250 million deal to sell China the Falcon, an
  airborne radar system equipped with advanced
  Israeli-made aeronautics on board a Russian-made
  plane.
• Only when the US Congress threatened to cut the
  2 billion aid it gives Israel annually, Israel
  buckled. Israel had to pay 350 million
  compensation to China.
• The US did not oppose Israeli supply of the
  Falcon to India.
• Acoording to US DIA, Israel resold Patriot
  missile technology to China and says, Chinas F
  10 fighter is a copy of the Israel Lavi.

12
Crisis in Russias arms supply relationships with
China

• Russia's arms industry is suffering a near
  collapse in exports to China as top brass agonize
  over which technology can safely be sold to
  China, as well as made in China under license.
• The main issue is indecision. Russians feel
  genuinely concerned, in the medium to longer
  term, that Russian and Chinese interests may
  collide again, said Alexey Muraviev, a strategic
  analyst at Curtin University of Technology in
  Perth, Australia.
• There is this debate about whether we should arm
  the Chinese when they may eventually turn against
  us.
• Still, with the Western arms embargo on China
  still in place, most analysts expect that Moscow
  and Beijing will eventually negotiate compromises
  that clear the way for future contracts.
• Russia still provides what the US and the EU
  will not supply.
• Russian analysts estimate that arms deliveries to
  China from 1992 to 2006 were valued at 26
  billion. Last year they were almost zero !

13
China much more frustrated over Russia than India

• Some of the Russian transfers to India include
  weapons and technology that Moscow refuses to
  supply to China. Moscow and Delhi agreed to begin
  the joint development of a new, so-called
  fifth-generation fighter.
• This aircraft would be a potential rival in
  performance to the U.S. F-22 Raptor, defense
  analysts say.
• India also agreed last year to buy another 40
  Su-30MKI fighters from Russia for 1.5 billion in
  addition to an earlier order for 140. Some
  military experts say this versatile, twin-engined
  jet is probably the best fighter and strike
  aircraft in the world. But Russia has not offered
  it to China. And Moscow is offering to sell India
  its latest fighter, the MiG-35.
• In nuclear submarine technology, Russia has also
  been more generous with India than with China.

14
Will the US-India Nuclear Deal be completed ?

• FM Pranap Mukherjee announced March 24 that India
  rejects the US timeline (end May) for the
  negotiations on the US-India Nuclear Deal. This
  implies the deal will not be concluded before the
  end of the Bush presidency.
• This may again slow the fast momentum of the
  US-India relationship during the Bush-years and
  hinder the development of the defense
  relationship.
• Full blossoming of the strategic partnership,
  missile defense and supply of a new generation of
  fighter planes may take a decade.
• Russia is likely to continue as a major arms
  supplier.
• Some systems will be supplied by Europeans.

15
Russo-American Battle for India !

• The Soviet Union/Russia have had a close defense
  trade relationship, including license
  co-production etc. since the Brezhnev era.
• Biggest but incomplete deal was transfer of
  carrier Admiral Gorshkov (1982) for free but on
  condition of major refitting and additional
  aircraft deals. Progress abysmal. Financial
  disaster for India.
• US counter-offer the Kitty Hawk (1960) also
  free, plus a big refitting bill and up to 200
  airplanes.
• The US is not necessarily going to win this.
  Indian Defense establishment has serious
  complaints over American equipment and methods
  40 Year old USS Trenton (1968), rebaptized INS
  Jalasha trouble.

16
Russia again the (new) enemy of the US ?

• It was fm S.o.D. Donald Rumsfeld and his neo-con
  coterie, who had designated China as the main
  future adversary of the US.
• His successor Robert Gates is refocussing on
  Russia Putins Imperial Restoration as the
  main threat to US global dominance.
• US priority is to marginalize Russia from India.
• This years US Annual Threat Assessment indicates
  that US-Russia relations will become more
  confrontational.
• US priorities are to dilute Sino-Russian and
  Indo-Russian strategic cooperation

17
Russia, India and Central Asia

• In 2002, India undertook to renovate an old base
  at Ayni in Tajikistan and wanted to set up its
  own military outpost there.
• During the 1990s India and Tajikistan both
  supported the Northern Alliance against the
  Taliban.
• Recently the Russians have pressurized the Tajiks
  to refuse Indian deployment and even access to
  Ayni, allegedly because of increasing Russian
  unease about Indias new closeness to the US.
• India will not have a strategic beachhead in
  Central Asia if it pursues close ties with the
  US.
• It also serves as a warning to India Dont buy
  too much American !

18
Gwadar, Pakistan New
focal point for strategic rivalry between the US,
China and India

• China and the US have gotten into a major contest
  for the Gwadar port in Pakistan.
• China partly financed Gwadars construction in
  response to the American presence in Afghanistan
  and Pakistan, and to monitor US activity in the
  Middle East, Indian naval movements in the
  Arabian Sea, and future Indo-US maritime
  cooperation in the Indian Ocean.
• China has so far paid 200 m of the 1.16 bn
  cost of Gwadar.
• Gwadar is on Pakistan's Arabian Sea coast, 72 km
  from Iran. It is near the mouth of the Persian
  Gulf and 400 km from the Strait of Hormuz,
  through which 40 of the worlds oil passes.
• China has put together a string of pearls from
  the Gulf to South-China. Gwadar is the
  westernmost pearl which should also help
  transform the economy of its landlocked Xinjiang
  Region.

19
From Zbigniew Brzezinski, The Grand Chessboard
American Primacy and its Geostrategic
Imperatives, Washington DC, 1997
20
China A Regional Power with some Global
Influence and the Ambition to become a
Two-Ocean Country
Gwadar
21
How will China view US arming of India,
while being under US-EU Embargo

• The US has always rejected a policy of
  containment of China, at least publicly.
• Only Japan under fm. PM Shinzo Abe did and
  appealed to India to join.
• Australia under the new PM has rejected the idea.
• So did PM Manmohan Singh on his recent visit to
  China
• US relations with China, unlike those with India
  are of a global strategic dimension.
• Ecnomically, the two are interdependent and
  coexist in a Balance of Financial terror with a
  threat of MAED.
• Any containment, even disguised, or congagement
  (sweet and sour) is inoperable.

22
The EU-China Strategic Partnership

• The EU and China are mainly trade- and investment
  partners. The EUs longterm goal is to
  socialize China into the international system
  by helping it to improve its governance, legal
  system, business-culture.
• Worried about US interventionism / unilateralism
  Yugoslavia, Afghanistan, Iraq China lured the
  EU in 2003 into a strategic partnership.
  Condition was that the EU lifted the 1989 Arms
  Embargo.
• The US and many Europeans figured that China was
  trying to split the trans-Atlantic connection and
  use Europe as a counterweight to the US in search
  of multipolarity.

23
Will the EU gravitate back to the US or expand
its Strategic Partnership with China ?

• The EU has better relations with the US and with
  China than the US and China have with each other
  but has it done much with the leverage that this
  entails ?
• Educated Chinese consider the EU as weak,
  inconsistent, protectionist and falling in line
  with the US too often.
• The US and the EU still see eye to eye on many
  issues regarding China, e.g. human rights,
  Chinas close energy-supply relations with rogue
  regimes Burma, Iran, Sudan, Uzbekistan,
  Zimbabwe, trade issues, IPR-violations, etc.
• It is still quite conceivable that trans-Atlantic
  links will regain momentum, particularly in the
  post Bush era and will maintain their precedence
  over Europes halting strategic partnership with
  China.

24
Sino-European Rivalry in Africa leads to closer
trans-Atlantic Ties

• At the EU-China Summit in Helsinki, the
  EU criticized China for its close
  relations with Sudan. China abstained in the UN
  Security Council vote authorising the transition
  from an AU to a UN force in Darfur. China trades
  oil for arms with Sudan.
• After entering Africa, Chinese enterprises are
  much more adroit in operating in Africa than
  European ones, and Europeans feel that many of
  their interests in Africa have been squeezed
  out by China.
• As a result European countries are becoming more
  and more anxious. Europe feels more and more that
  it cannot deal with the Chinese colossus and that
  it will be increasingly marginalized unless it
  gets closer to the United States.

25
Is there a EU-China Strategic Partnership without
Traditional Hard Security ?

• China has many strategic partnerships, but they
  are more symbolical than substantial.
• However, China still attaches importance to a
  European role in the stabilization of Eurasia,
  where you have an expanding EU and NATO in
  Europe, large pockets of instability on the
  Balkans, the Southern Caucasus and Central Asia.
  According to the Chinese, the EU, and in
  particular/OSCE is very helpful in dialogues on
  confidence-building, peace-making and
  stabilization.
• China is neutral on the issue of NATO accession
  of Ukraine and Georgia and still resists Russias
  request for closer military cooperation, e.g. in
  the Shanghai Cooperation Organization. Russia
  advocates collective security for SCO, but China
  only cooperative security anti-terrorism,
  anti-extremism and special dialogues on
  energy-security.

26
Is there a US-China-India Triangle ?

• According to a Foreign Affairs adviser of Senator
  McCain, Ashley Tellis, there is not. The US will
  not consult with China or inform it about
  developments in its relations with India.
• According to a seasoned middle-of-the-road
  Washington China-insider, Harry Harding, there
  definitely is. Actions of either of the three
  have significant impact on the other two.
  Question is what form it is going to take.
• India has played China card with US very
  effectively since 1998. After a while China said
  Why dont you talk directly to us ?
• Neo-cons in both the US and India are not too
  happy about that. A close US-India alignment
  against China is not going to happen.
• India and China are congaging each other.
  (Tellis)
• They cooperate on global trade and other issues
  and compete for strategic influence and
  energy-resources in countries such as Burma,
  Bangladesh, Sri Lanka and Southeast Asia.

27
Conclusions

• US-China relations will always zig-zag, but the
  two are economically and financially
  interdependent Siamese Twins -- to such a
  degree that war and conflict have become
  inconceivable (MAED !).
• China will be the competitor of the US at the
  upper, bipolar level of a multi-tiered world. The
  other big players the EU, Russia, India and Japan
  will at the multilateral level selectively side
  with either of the two.
• The US needs an enemy to keep feeding its
  colossal Military Industrial Complex. Russia
  may be designated the (potential, future) enemy
  (again) rather than China.
• Trans-Atlantic relations will probably improve on
  a number of issues, including China but the US
  and the EU will strongly disagree about Russia.
• West-Europe (the EU Norway and Switzerland) may
  in the end be closer to Russia than to the US