War in Iraq: What's at Stake for China?
Dec 13, 2002
stratfor.biz
Summary
A U.S. victory in Iraq would significantly diminish Beijing's ability to challenge U.S. global dominance in the future. However, China will remain the United States' main geopolitical competitor no matter what the war's outcome. Beijing will let others lead the anti-war effort as it works to strengthen its economy, military and social fabric.
Analysis
This piece, the third in Stratfor's occasional "Iraq War Stakes" series, examines what is at stake for China in a U.S. war against Iraq, Beijing's stance toward Washington's plans and the consequences of that position.
What Is at Stake for China
Beijing is more concerned about the long-term ramifications of a U.S. war against Iraq than the near-term consequences. The government rightly fears that a U.S. victory would secure both Washington's control over Iraq's oil and its military dominance over the entire region, strongly reducing China's ability to challenge the United States in the future.
For China, the most immediate impact of a U.S. attack would be in oil prices. Although a short war would have little near-term effect, a protracted battle that causes prices to rise could be more damaging, since China is a net importer of crude. But Beijing still is not quite as dependent upon foreign oil as Japan, for example, so it has a bit more room to maneuver.
Looking further into the future, a U.S. victory in Iraq could presage a massive restructuring of the Middle East and lead to lower oil prices. But this could prove a mixed blessing for Beijing, which would find itself even more dependent upon close U.S. allies -- such as the likely successors of Saddam Hussein in Baghdad -- for energy supplies.
In particular, China would have to abandon its dream of controlling a major stake in Iraq's oil sector. U.N. sanctions against the sale of Iraqi supplies, outside of the oil-for-food program, have meant that Beijing has not benefited much from past deals with Hussein's regime. But if Hussein can appease the U.N. inspections regime and somehow stay in power, then the potential lifting of sanctions would make China's participation in Iraq's energy sector profitable indeed; but regime change in Iraq would make this goal unattainable.
However, Beijing fears the longer-term implications of war even more. A successful U.S. campaign would give Washington a stranglehold over oil supplies, stifling China's growth and preventing it from ever being truly free of U.S. dominance. An even stronger Washington would make it harder for the Chinese government to solve problems, such as the Taiwan reunification issue, to its satisfaction. And the United States would have no room for China in the Middle East.
Beijing certainly would not mind if Washington were to get bogged down in a protracted war in Iraq and interminable disputes in the Middle East -- this would keep the United States focused on a different foe and away from East Asia. It also would give China more breathing room to strengthen its internal economy, maintain social integrity and build up a powerful military. The problem is that China knows there is little Iraq can do to resist the U.S. war machine.
China's Position Toward War
China has and will continue to oppose the war, but to Washington's surprise it has at least shied away from active attempts to scuttle U.S. plans. Beijing sided mainly with France and Russia in the run-up to the U.N. Security Council resolution vote in November, but it has been the most conciliatory of the three -- and the first to hint that it would not veto a measure calling for weapons inspections.
China's position and strategy toward the Iraq war stem from its geopolitical thinking, which is quite distinct from that of the West and deeply rooted in Chinese history.
Five thousand years of Chinese civilization have taught China a curious lesson -- one that other world players would have trouble accepting: Inaction often is better than action, especially if you do not have the power to change what is coming. Let others deal with the new reality while you build your strength; act only if you must, and even then, do so indirectly.
A look back at Chinese history is telling. In the third century B.C.E., as countless Hun herds threatened to wipe out China, diplomats solved the problem not through war but by bribing the Huns to head west instead. Eventually, the Huns' infamous leader, Attila, shook up the Roman Empire, on the opposite side of Eurasia, before the tribe disappeared forever -- while China survived and prospered.
The Chinese later offered little resistance to Genghis Khan, and as a result subsequently swallowed their Mongol conquerors. During World War II, the nation remained mainly on the sidelines while U.S. forces fought fierce battles with Japan in the Pacific and Russians liberated much of Japanese-occupied China in their 1945 armored thrust.
The philosophical variant on this style of thinking was popularized by Mao Tse-Tung: China is a wise monkey waiting on the top of a hill, while two tigers fight to the death in the valley below. The monkey will emerge victorious once the tigers are either killed or exhausted. During the Cold War, not only did China stay away from the U.S.-Soviet global confrontation, it also benefited from being courted by the Soviet Union and, later, Washington.
Although the Soviet Union is gone, China is in no hurry to replace it as a global counterweight to the United States. Beijing certainly hates the U.S. global domination, but the government will not be ready to engage Washington in direct confrontation for the foreseeable future, especially since it needs U.S. capital and investments. So China's strategy is to allow others to fight Washington while it focuses on its own growth and transformation into a possible superpower.
China's Strategy Toward War: How Inaction Works
The Chinese government is pursuing a three-fold strategy concerning a U.S. war against Iraq. First, Beijing tried to stop the war by encouraging others to voice their opposition in and out of the United Nations, even while its own anti-war voice was rather muted. Second, China has helped Iraq build its defense arsenal in the hope that U.S. forces will get bogged down in the war. Third, while the United States engages in fierce diplomatic battles with much of the world, China is busy positioning itself as the most attractive world market and partner.
With the first aspect, unless U.N. inspectors find a smoking gun on Iraq's suspected WMD programs, China will continue to side with most of the world's governments against an invasion of the country. Beijing quickly echoed Russia's praise for the Iraqi government when it submitted a dossier on its weapons programs Dec. 7. During Russian President Vladimir Putin's visit to China on Dec. 1, both governments also reiterated their desire to see a political solution to the crisis.
If the United States opts for a unilateral attack, it will be in China's best interests for Washington to get mired in a military action. And the Chinese government has done its part to help Baghdad boost its decaying defenses, although it still limits this defense aid in order to avoid antagonizing Washington too much.
China has been accused of installing a fiber-optic network linking Iraqi air-defense sites together, as well as selling radars to Baghdad. But Washington has not pressed the issue because it wants to keep Beijing from taking a more active anti-war stance.
This policy contrasts sharply with the enormous pressure the Bush administration has placed on other nations suspected of making similar sales to Iraq. For example, Washington recently withdrew financial aid to the Ukrainian government over its alleged sale to Baghdad of the Kolchuga radar system, which could be used to track U.S. planes while remaining undetected.
In its official report on the Kolchuga sale, the White House claimed that Kiev shipped the system through China -- but it has not issued any official statement or criticism regarding Beijing's apparent involvement in the sale. Ukraine sold a total of four radars to China, which likely sent them on to Iraq, though Beijing denies this.
Beijing does not think a wounded Iraqi "tiger" can beat an American one. But Chinese strategists see an Iraq war as the beginning of a global war pitting the United States against Islam -- after which Washington will pursue other foes, perceived or real. They are not worried about China becoming a target anytime soon, due to the importance of that market to U.S. companies.
While the United States focuses on war, China will try to take advantage of the investment boom it is experiencing. South Korean and other Pacific companies already invest more in China than they do in the United States. China's location -- far from the Iraq conflict -- will make it the prime investment and trade partner for goods otherwise bound for Europe, and the U.S. preoccupation with war (particularly if it impacts the U.S. economy) will leave China the key regional player.
During and after a war, China will position itself as both a reliable U.S. ally in Asia and as a nation to which smaller countries can turn. Beijing needs U.S. investments to continue its economic growth for years to come. On the other hand, it quietly will pursue its own hegemonic regional goals, playing up its geographic proximity and its sympathy for Islamic and non-Islamic nations alike. Of course, all of these ambitions are dependent upon Beijing's ability to maintain social stability and to keep investments flowing.
The threat of war also is pushing China to diversify its energy supplies as quickly as possible. According to the Institute of Japan Energy Economics, Beijing needs to expand its oil exploration in Russia, Kazakhstan, Turkmenistan, Iran, Sudan, Venezuela and Indonesia to fulfill future demand.
Russia is the key place to implement this strategy. Although Beijing sees Moscow as subservient to Washington, leaders know that Russia needs to cooperate with China to improve its economy, since it is not getting much foreign direct investment from the West. State-run China National Petroleum Co. and Russian oil major Yukos recently reached a preliminary agreement to build a pipeline from Russia's Eastern Siberian region of Irkutsk to energy-starved northwest China, but the deal is not yet final.
On Oct. 18, China agreed to purchase 20 billion cubic meters of natural gas from Russia's Kovykta field each year, beginning in 2008, and Beijing is negotiating with four Central Asian nations to build a 2,000-kilometer (1,250-mile) gas line that would link Central Asia and China's West-East pipeline.
Conclusion: China Prepares for the Distant Future
A U.S. victory in Iraq would significantly decrease Beijing's ability to challenge U.S. global dominance in the foreseeable future -- but would not eliminate it completely. And China still could benefit in the long run.
Beijing probably can use the time that Washington is focused on the war and possible follow-on engagements in the Middle East to strengthen itself internally. China's perceived peacefulness, contrasted with the U.S. war machine, might result years from now in China overtaking the United States as the main destination for foreign capital.
For this to happen, two major factors must be in place. First, China must maintain its internal stability and economic growth. Second, Washington must continue on its warpath after Iraq. But no matter what the outcome of the Iraq crisis, China will remain Washington's main geopolitical competitor. |
