Wednesday, May 28, 2008

China’s economic growth is not just ‘economic growth’

Arun Shourie: Wednesday, November 08, 2006

It is a grave error to be mesmerised by China’s economic growth as if it were just ‘economic growth’.

To begin with, much of ‘economic growth’ consists of things that add military muscle. When China produces modern weapons-systems — apart from many other systems, it has made major advances in cruise and ballistic missiles, space technologies including technologies to disable enemy satellites, electronic warfare capabilities; when it lays out ‘infrastructure’ in Tibet — that is all ‘economic growth’. But it has direct military implications for India. The train that traverses heights of 16,000 feet to reach Lhasa can carry tourists, no doubt; but also men and materials of the PLA. When — as satellite imagery shows and ground information confirms — China builds 39 transport routes from its interior to the borders with India, and upgrades 15 of them for heavy vehicular traffic, including a four-lane highway right up to the border of Sikkim, all that too is ‘economic growth’; but that ‘growth’ should awaken us to what it implies for our security.

Second, economic growth translates directly into the ability to bend others to subserve a country’s interests. No country in South East Asia — and that includes Australia — will take a step today without factoring in the likely reaction of China to that step. Nor can even the US Administration be oblivious of the fact that China is today the largest financier of its deficit, that it holds one of the largest chunks of US securities, that US firms have such high exposure in China. When the Chinese president announces during his visit to Latin America that China will invest $ 100 billion in that region, and gives $ 20 billion on the spot to beleaguered Argentina; when he announces another $ 100 billion investments in the five Central Asian Republics; and the country chalks up projects to invest yet another $ 100 billion in Iran, China acquires deep and pervasive influence. Will these countries heed us or China when they have to vote on reorganisation of the Security Council? Similarly, the fact that, in the contention for influence in Central Asia, China can deploy resources of an order that Russia just cannot today set aside, has compelled the latter, anxious as it is to check US advances in these five states, to accept being a sort of junior partner to China in the region. The mining boom in Australia, including its production and export of natural gas, are directly linked to China’s growth. ASEAN, and even Taiwan, have been already sucked into the Chinese sphere — their incomes are directly linked to continued Chinese growth. China does not have to deploy any means — certainly not military ones; of their own accord and in their own interest, these countries keep China’s likely reactions in mind.

Why go that far? Do we not do so? Our silence on Tibet speaks for itself. Similarly, it is well known that six years ago Vietnam offered us access to the strategic Cam Ranh Bay. We declined — so as not to offend China. Even six years after establishing a Tri-Services Command structure in the Andaman and Nicobar islands, we have not positioned any significant assets there — in part out of the apprehension that doing so would bring us into direct contest with the Chinese footprint in Myanmar and Bangladesh.

Third, China is already translating its economic power into military might. The 2006 Report of the US Secretary of Defence on China’s military prowess records that the modernisation of Chinese forces is proceeding at a pace faster than US agencies had earlier thought likely.

Fourth, more directly, the scale of China’s and India’s economic development is already making us compete for natural resources — like oil and gas. And the resources that China has accumulated are enabling it to outbid India in contest after contest. In the contest for PetroKazakhastan, China defeat our bid of $ 3.6 billion by bidding $ 4.2 billion. It already has acquired exploration rights for the overwhelming area of Kazakhstan, and has already built a 1000 km pipeline to carry oil from that country into Xinjiang province of China. We depend on Iran for being a counter to Pakistan; for much of our oil and natural gas. But China has now become Iran’s largest market for oil. It has identified projects for investing $ 100 billion in that country in the next 25 years — and this has contributed in no small measure towards its securing deals to import 100 million tons of Iranian LPG and also 150,000 bbl/day of oil — the latter deal is itself worth $ 100 billion. In far away Ecuador too China’s Sinopec and CNPC beat ONGC and won access to 143 million tons of proven oil reserves. In Angola, we had almost got the deal to take over Shell’s operations for off-shore exploration — China swooped it away by extending a 17 year, $ 2 billion soft loan to the country... This rivalry is bound to intensify in the coming years, and the differences in the resources that each side can deploy for each contest is bound to make all the difference to the outcome.

And the country is China

These factors are by themselves enough to raise concerns about the future. They are compounded by the fact that the country we are talking about is China, and not just any other country.

The dominant orientation of China throughout its history has been to power — the acquisition of power, the use of power, the manipulation of the symbols of power. Second, its singular concern in this regard has been to ‘control the periphery’ — that is, to control the areas from which, and the groups by which its security may be threatened. As the areas from which its security may be threatened now include those that are at great distances from it — say, the US — it is determined to acquire capacities that would enable it to keep those distant areas in check also. In any event, India lies literally on its periphery.

Third, and most consequentially, during the last two decades, China has completely rewritten its military doctrine — from ‘Peoples War fought on Chinese soil’ to ‘Local wars under high technology conditions’ to the current doctrine of ‘Force projection under high technology conditions’.

Fourth, China has been doggedly pursuing the consequential ‘Revolution in Military Affairs’, and the ever-new weapons systems that go with it. In particular, a novel danger stems from its emphasis on building capacities to hurl ‘the assassin’s mace’ at the ‘acupuncture points’ of integrated, modern economies — to disrupt power grids, financial systems, air traffic control networks, railway traffic control networks, communications and broadcasting networks... and to do so suddenly, simultaneously and on a fatal scale.

In no doubt about India

And China has a clear idea about India — that it is a potential nuisance. It views us as one of the ‘claws of the crab’ — the crab is the US whose aim is to contain China; a crab with South Korea, Japan, Taiwan, Vietnam, Australia and India as its claws. The recent moves for closer relationship between the US and India, advantageous though they are for us, have had the incidental effect of reinforcing this perception.

Accordingly, China has pursued a consistent strategy of containing India in return, of keeping it confined to, and busy in South Asia.

With this aim, it has given aid to Pakistan for all sorts of purposes — including the development of atomic weapons and acquisition of missile technology. And it has a long tradition of doing so. Recall the counsel of The Wiles of War, “Murder with a borrowed knife” — that is, instead of doing anything overtly aggressive yourself, find the entity that is naturally predisposed to do your enemy down; arm it. China has entered into a military pact with Bangladesh. There have been reports of its offering to build an atomic reactor for Bangladesh. Myanmar is a dependency of China. In fact, the largest supplies of Chinese arms go to four countries in our region — Pakistan, Myanmar, Bangladesh and Iran.

Tibet has been militarised — to put the Tibetans down, no doubt; but only to put them down? China has redoubled its efforts in Sri Lanka, Maldives, Seychelles and Mauritius. It already has access to the ports of Myanmar — from which it has also taken on lease the Coco Islands just 30 miles from the Andamans. Now it is helping build and it thus acquires access to deep-sea ports round us: Chittagong in Bangladesh and Gwadar in Pakistan — the latter alone at a cost of $ 3 billion. It is also upgrading the naval base in Omara for Pakistan. Along with constructing the port at Gwadar, it is building highways that will link Gwadar to locations within Pakistan but also to Urumchi in China. The most consequential of this string of ‘initiatives’ is the project to dredge Myanmar’s Irrawaddy River — this is to be done by Chinese engineers and much Chinese labour. It isn’t just that a good proportion of this workforce will stay on in or around the new facilities. Once the project is completed, China will acquire a useable waterway giving direct access from its Yunnan province to the Bay of Bengal...

Could all this be out of absent-mindedness? The fact is that China has effectively ‘ringed’ India, and is redoubling its efforts to ring it tighter.

Furthermore, in every international arena, there is a pattern to its actions vis a vis India. It has exerted much effort to keep ASEAN from establishing closer links with India — it has campaigned to have ASEAN+3 (ASEAN, Japan, South Korea and China) and not ASEAN+4 which would have included India. It has summarily rejected the G-4 framework for the expansion of the Security Council. It did not condescend to let India enter the Shanghai Cooperation Organisation — through which it is institutionalising its influence in Central Asia. In the end, it agreed to grant us “observer status” — but only along with Pakistan and Iran; and only when we agreed to it getting the same status in SAARC and BIMSTEC: for the latter, it was vigorously supported not just by Pakistan and Bangladesh but also by our ‘traditional friends’, Sri Lanka and Nepal.

Learn from China

None of this is ground for complaint against China. It is pursuing its interest as it sees them. The question we have to ponder is: ‘What are we doing for our interest?’

The lessons are manifest:

Do not get swept off again by the ‘bhai-bhai’ business.

Get out of the ‘see no China, speak no China, hear no China’ policy. See what China is doing with clear eyes.

In particular, do not leave the formulation of a response to just four/five desk-officers working on the China desk.

Reflect on the capacities that it is acquiring — as Musharraf once said, once capacities are acquired, intentions can change swiftly.

The time to start preparing for that sudden change of intentions is the time it would take to develop the counter — that is, decades before the change ‘suddenly’ erupts in view.

Remember, to fall behind a neighbour is to tempt him to assault us.

Indeed, if the present distance continues, and all the more certainly if it increases, China would not have to ‘assault’ us. The distance will ensure that other countries heed it rather than us. And that we heed it too.


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