China won’t go fishing in troubled global waters

Last Updated:2014-09-11

By Geoff Raby

As last week’s NATO summit was surveying a world in turmoil, Beijing would have seen a world full of strategic opportunities. Its only strategic competitor – the US – is grappling with multiple crises: renewed conflict between Israel and Palestine, the rise of Islamic State, a broken Iraq, a Syria that presents no good options, the march of Islamic fundamentalism in Africa, especially Nigeria, the possible return of the Taliban in Afghanistan, and Russian bellicosity and deviousness.

Yet Beijing can do little to capitalise on the situation. Beijing is a highly constrained power for reasons of geography, history and economics. Its security outlook is markedly different from that of Washington or Canberra.

Despite the rapid modernisation of China’s military, albeit from a very low base, but at a rate not likely to have been significantly disproportionate to its economic growth, it has few realistic military options.

China has 14 countries on its borders and some 22 thousand kilometres of land borders to defend. Many of these have been hostile or deeply suspicious of China.

As recently as 1979, China was defeated in a short but bloody and costly war with Vietnam.
China is still an empire, with significant unresolved territorial issues within its borders: Tibet, Xinjiang and Taiwan.

And although Hong Kong is formally part of the People’s Republic, expectations about the type of political system after 2017 diverge sharply between Beijing and a sizeable part of the Hong Kong population.
Beijing is unlikely to handle Hong Kong well – with neither finesse nor nuance – so this could become another major distraction for policy makers.

Dependent on world markets

For the first time in China’s many thousands of years of history, it is now utterly dependent on world markets for all the inputs it needs to sustain rising living standards – energy, metals and minerals and, increasingly, food. The conditions under which China is emerging as a major global power are vastly different from those faced by the US during its ascendency after the Civil War.

Then, the US had settled and peaceful borders. It also had all the resources it needed to sustain its rapid growth except people, which it attracted in big numbers from Europe.

As the world’s biggest net oil importer, China craves geopolitical stability. It is also disproportionately dependent on Iran so the current instability in the Middle East is a cause for near policy paralysis. Beijing’s response, more often than not, is simply to hope for the best rather than act. It will not be joining any combat coalition against IS any time soon.

Despite having the second biggest economy in the world, China is still a very poor country. It is 84 on the World Bank’s league table of per capita income and, although measures vary, its per capita income is somewhere around 13 per cent of US per capita income.

Economic development and resource security have long shaped strategic thinking by China’s leadership, and they are likely to do so for a long time still.

Until 2009, strategic policy reflected these factors. It was governed by Deng Xiaoping’s maxim of “hide your strength, bide your time".

One day, China’s time would come, but it was to be a long way off.

Assertive foreign policy

In its region, however, unlike further afield, such as in the Middle East, Beijing has recently adopted a more assertive foreign policy. The reasons for the timing of this are not really understood.

In part, China’s rapid economic growth surprised everyone, not least those in the Beijing leadership. Whatever the reasons – domestic factional politics, need for greater accommodation of the PLA – the change in China’s strategic behaviour has been brought forward. Perhaps it was also a perception of the US being distracted by its engagements elsewhere. Certainly, the US sought to address this perception directly by its announcement in 2010 of the Pivot to Asia (variously renamed rebalancing, refocusing, recalibrating).

China’s recent assertive foreign policy in the region is here to stay. The problem for China is that this policy does little to advance its strategic interests. To the extent that China seeks, quite legitimately, to balance US influence in the western Pacific, its more muscular diplomacy serves only to isolate it further and encourages its neighbours to seek greater, not less, US engagement in the region.

Fortunately for regional stability, China does not have any other options in this region, other than patient diplomacy. Beijing policymakers may be excited that they are entering a period of strategic opportunity with all the troubles elsewhere in the world, but there is little they can do to capitalise on them, even if they wish to do so.

Geoff Raby is Chairman and CEO of Geoff Raby & Associates and a former Australian Ambassador to China.

This article first appeared in the Australian Financial Review: