China’s Encirclement Concerns

For almost two decades, Chinese strategists have worried about what they regard as the geopolitical encirclement of China. At various times, they have attributed that encirclement to the United States, then India, and most recently Japan.[1] No doubt last week’s large-scale naval exercise in the western Pacific did little to dispel their concerns. For the first time warships from India, Japan, and the United States jointly conducted anti-air and anti-submarine drills in the Philippine Sea, an area directly adjacent to the Chinese-claimed waters of the East and South China Seas.

China's Encirclement Concerns
China’s Encirclement Concerns

Events over the past month likely added to China’s concerns. Last Friday, Indian Prime Minister Narendra Modi visited Bangkok in part to expand his country’s defense and maritime security cooperation with Thailand. A week earlier, he met with President Barack Obama at the White House, highlighting India’s closer ties with the United States. At a summit in late May, the United States and Japan, along with other Group of Seven countries, openly voiced their concern over China’s maritime actions. Days before the summit, Obama flew to Hanoi where he lifted the long-standing U.S. arms embargo against Vietnam, one of China’s South China Sea antagonists. Then after the summit, Japanese Prime Minister Shinzō Abe welcomed a Vietnamese delegation to discuss how they could enhance their military cooperation.

Certainly Chinese concerns over encirclement are not new. During the Cold War, China worried about the Soviet Union pursuing a similar geopolitical strategy. Even earlier, the Chinese Communist Party faced several all too real “encirclement campaigns” during China’s long civil war. Those experiences could have left an imprint may have left their imprint on China’s strategic thinking ever since.

What is clear is that Asia-Pacific countries have begun to prepare for what could be an era of heightened tensions. Such hedging has recently accelerated, as Chinese behavior in the East China Sea, South China Sea, and on its border with India has grown increasingly muscular. The United States has pursued its “pivot” or “rebalance” toward Asia, which shifted the bulk of American naval might to the Pacific. India and Japan have boosted their diplomatic and economic engagement in Southeast Asia and strengthened their military postures. Other countries have begun to do the same. As Australia’s 2016 defense white paper warned, “competing claims for territory and natural resources [in the region]… could undermine stability.”[2] But does such hedging constitute an encirclement of China?

Imagined Encirclements

In the early 2000s, China agonized over a possible American encirclement on its western border as U.S. forces streamed into Afghanistan and Central Asia. But a decade later, a persistent insurgency had worn down the United States and its allies. U.S. military bases in Kyrgyzstan and Uzbekistan were closed; America’s once-close relationship with Pakistan became acrimonious; and U.S. forces began their long withdrawal. China’s concern never materialized.

Now Beijing fears an even wider encirclement by the countries along the Asia-Pacific periphery, as they hedge against China’s assertive behavior. But most of them are still in the early stages of building up their strength. Although Australia has launched an ambitious military modernization program, its forces remain small. India’s defense bureaucracy continues to frustrate its military’s modernization and expansion plans. While Japan fields highly capable forces, its fragile economy constrains its military’s ability to grow. Even America’s “pivot” toward Asia may not be as weighty as it sounds, as the Obama administration has trimmed the overall size of the U.S. Navy. Hence, one could argue that China’s concern over an encirclement is, at least for the moment, not wholly warranted.

Undermine the Encirclement

Besides, the countries that China fears will encircle it are not yet a cohesive bunch. Officially non-aligned, India remains skittish about is relationship with the United States. And while Australia and Japan have security treaties with the United States, they do not have strong ties with each other. That was evident when Australia, at the last minute, chose to purchase France’s Scorpene-class submarine over Japan’s Sōryū-class submarine for its next-generation submarine fleet. India’s security relationships with Australia and Japan are equally tenuous. China could use bilateral deals to weaken those relationships and hinder a nascent encirclement from coalescing any further.

Breakout of the Encirclement

But even if China’s fear was to manifest itself, Beijing is already developing the means to break out of it. In late 2013, China turned heads across Asia with its “One Belt, One Road” initiative. Among the many infrastructure projects it has financed in Southeast Asia are a special economic zone in Cambodia, hydroelectric dams in Laos, and energy and railway projects in Malaysia. While China’s “yuan diplomacy” has not always been successful, it has had an impact. Cambodia and Laos have become reliable advocates for China within ASEAN. Malaysia largely remains on the sidelines of the South China Sea dispute, despite a rising number of Chinese infringements of its exclusive economic zone. China’s initiative may prove useful even in the Philippines, which has been a thorn in Beijing’s side. The Philippines’ new president, Rodridgo Duterte, has indicated that he would undertake the bilateral dialogue that China has long sought in exchange for Chinese economic development assistance.

Benefit of the Encirclement

Still, Beijing may have reason to play up its fears of encirclement. Despite its remarkable economic achievements, China faces a host of problems. Today, Chinese leaders must manage their country’s difficult transition from investment-led growth to expansion by private consumption, while dealing with its various debt-fueled bubbles. Even under the best conditions, those challenges are bound to be volatile. So some may see fears of encirclement as a way to rally public sentiment and maintain the “social stability” needed to ensure the longevity of communist rule. In any case, whether the “encirclement of China” is imagined or real, effective or not, one can expect the phrase to remain in Beijing’s lexicon for years to come.

NOTES

[1] Zhang Yunbi, “Tokyo urged not to stir tension in the South China Sea,” China Daily, Mar. 10, 2016, http://www.chinadaily.com.cn/world/2016-03/10/content_23806572.htm; “Tokyo’s move to encircle China will lead nowhere,” Global Times, Nov. 23, 2015, www.globaltimes.cn/content/954471.shtml; Hu Qingyun, “US to increase troops stationed in Australia: Deal seen as move to ‘encircle’ China,” Global Times, Aug. 13, 2014, http://www.globaltimes.cn/content/875836.shtml; Li Hongmei, “India’s ‘Look East Policy’ means to encircle China,” People’s Daily Online, Oct. 27, 2010, http://en.people.cn/90002/96417/7179404.html; Dai Xu, “U.S. building ‘Asian NATO’ to encircle China,” China.org.cn, Aug. 11, 2010, http://www.china.org.cn/opinion/2010-08/11/content_20687335.htm; “China feels encircled,” Economist, Jun. 6, 2002.

[2] Australian Department of Defence, 2016 Defence White Paper (Canberra: Commonwealth of Australia, 2016), p. 57.

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Railway to Somewhere: Thailand’s Politics and China’s Reach in Southeast Asia

Despite elections last Sunday, Thailand remains riven by political conflict.  On the one side is the current government of Prime Minister Yingluck Shinawatra (and nominally her brother, Thaksin Shinawatra, who was ousted from power in 2006).  Their supporters dominate Thailand’s north and northeast.  On the other side is the Democrat Party, whose adherents are largely drawn from Bangkok’s middle class, southern Thailand, and the royalist establishment.  While many issues divide the two sides, the outcome of their struggle may have an impact on China’s reach in Southeast Asia.

Countries have long dreamed of a railway connecting China and Southeast Asia.  A century ago, both the British and French governments hoped to link their Southeast Asian colonies with China.  But ultimately terrain and war halted those ambitions.  The Cold War poured further cold water on the idea, as revolutionary China seemed more intent on exporting communism than trade.

But a decade after China implemented its market reforms, things began to change.  By the mid-1990s, the ASEAN-Mekong Basin Development Cooperation revived hopes for a railway between China and Singapore.  But a lack of funding prevented its progress.  Finally in 2011, the Asian Development Bank, working with the region’s countries, agreed to finance a circuitous railway that ran from China, down the length of Vietnam, across Cambodia, through Thailand, and finally down to Malaysia and Singapore.  Railway construction costs were held down by the fact that the route knitted together several existing railway lines, though a substantial sum would be needed to upgrade existing rails and rolling stock.

But China has since upended the plan.  It sought a more direct route to Southeast Asia.  It had already built a railway from Kunming (in southern China) to its border with Laos.  Then China’s railway minister pushed for $5 billion worth of Chinese financing to extend that railway to Vientiane, the Lao capital.  The early 2013 downfall of that minister on corruption charges (and the elimination of his railway ministry) left some to wonder whether the proposed railway would proceed.  But that uncertainty was lifted a few months later when Chinese President Xi Jinping proposed the creation of a China-backed Asian infrastructure development bank, part of his new charm offensive in Southeast Asia.  One of the infrastructure projects that he highlighted was the proposed railway.  However, even if its financing looks more settled, the railway still faces the challenge of construction.  While its route is more direct, it will require scores of bridges and tunnels to wend its way through Laos’ mountains.  Meanwhile, at the other end of the hoped-for railway, China has expressed interest in the expected tender for the Malaysia-Singapore segment later of it in 2014.

Such a railway would have strategic value for China.  Just as the transcontinental railways across the United States helped bind its eastern and western halves in the late 1800s, China’s north-south railway would help better integrate Southeast Asia—a mainly seaward-facing (and American-leaning) region—with its economy and political interests.  In addition to being more direct, the route that China’s railway has chosen would tighten the connection between it and its ally Laos and entirely avoid Vietnam, a country with which China shares a long and quarrelsome history.

Whether the north-south railway from Kunming to Singapore is completed depends on Thailand, which sits in the middle of its projected path.  Thailand’s current government has already discussed with China the possibility of building a connecting line between Vientiane and Bangkok, using concessionary Chinese loans.  (Rather than replace the existing railway, a new high-speed one would be built next to it.)  That connecting line would bring construction jobs to Thailand’s economically-lagging northeast.  But there are those in the region who are concerned about the schemes of China and Laos, due to their unfettered hydroelectric dam development on the Mekong River and its tributaries (those dams could cause droughts or floods on their agricultural lands if they are poorly managed).  Should the Democrats succeed in displacing the current government from power, one might expect that talks with China over the railway would continue, given that many of their Bangkok supporters also favored hydroelectric dam construction on the Mekong River.  However, in the tit-for-tat nature of Thailand’s politics, grudges can be deeply held and if the proposed railway between Vientiane and Bangkok is too closely associated with the current government, the railway could become a casualty of the domestic politics between the two factions.

Just how concerned should observers be about a railway that ties Southeast Asia more closely to China?  In the short run, they probably need not worry too much.  After all, China financed and built a port and pipeline in Myanmar that linked its coast to China’s border, but Myanmar still sought to build stronger relationships with Japan and the United States.  But over the long run, as economic interests in the infrastructure become entrenched and if they come to influence a country’s government, then national interests can shift.  Thus, it would be wise for Japan and the United States to encourage the speedier construction of the Asian Development Bank’s railway route through Vietnam.  That route would not only encourage stronger Cambodian bonds with Thailand and Vietnam, but also enable Cambodia to become less reliant on Chinese foreign direct investment for its economic growth.

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