Recent Items

Pepe Escobar: Why American Worries about “Containing China” Are Off the Mark

Posted on by

Yves here. As China has become more powerful economically, and is building up its navy (a substantial navy is a precondition of being a true superpower), some pundits have taken to anticipating a world where US cedes dominance to China over a protracted and likely unstable transition period, using the decline of the British Empire and the rise of American influence as a guide.

That’s unlikely to be the right frame of reference. As Tom Engelhardt writes in his intro to Pepe Escobar’s piece:

As Escobar explains, to spur the staggering levels of growth that keep the country and the Party afloat, the Chinese leadership is embarking on a kind of forced urbanization program that may have no historical precedent. It is guaranteed to destabilize the countryside, while yet more peasants flood into the cities. It’s seldom acknowledged here (though the Chinese leadership is well aware of it) but China has a unique, almost two-thousand-year-long record of massive peasant uprisings (often religiously tinged) sweeping out of the countryside and upsetting established rule. The last of them was Mao Zedong’s peasant revolution that established the present People’s Republic.

Mass protest in China has been on the rise. Environmental conditions are disastrous. Let the Chinese economy falter and who knows what you’ll see. This is not a formula for an expansive imperial power, no less the next master of planet Earth, whatever Washington’s fears and militarized fantasies may be.

Yves again. That does not mean that China won’t be seeking to assert its influence and that the US military industrial complex won’t be disposed to play that up. But instead of seeing a bumpy, fractious transition of leadership, we may instead see a change from a world where an overextended US is still dominant to one of jockeying major countries and power blocs.

By Pepe Escobar, a roving correspondent for Asia Times, an analyst for the Russian network RT and al-Jazeera English. Cross posted from TomDispatch

Sun Tzu, the ancient author of The Art of War, must be throwing a rice wine party in his heavenly tomb in the wake of the shirtsleeves California love-in between President Obama and President Xi Jinping. “Know your enemy” was, it seems, the theme of the meeting. Beijing was very much aware of — and had furiously protested — Washington’s deep plunge into China’s computer networks over the past 15 years via a secretive NSA unit, the Office of Tailored Access Operations (with the apt acronym TAO). Yet Xi merrily allowed Obama to pontificate on hacking and cyber-theft as if China were alone on such a stage.

Enter — with perfect timing — Edward Snowden, the spy who came in from Hawaii and who has been holed up in Hong Kong since May 20th. And cut to the wickedly straight-faced, no-commentary-needed take on Obama’s hacker army by Xinhua, the Chinese Communist Party’s official press service. With America’s dark-side-of-the-moon surveillance programs like Prism suddenly in the global spotlight, the Chinese, long blistered by Washington’s charges about hacking American corporate and military websites, were polite enough. They didn’t even bother to mention that Prism was just another node in the Pentagon’s Joint Vision 2020 dream of “full spectrum dominance.”

By revealing the existence of Prism (and other related surveillance programs), Snowden handed Beijing a roast duck banquet of a motive for sticking with cyber-surveillance. Especially after Snowden, a few days later, doubled down by unveiling what Xi, of course, already knew — that the National Security Agency had for years been relentlessly hacking both Hong Kong and mainland Chinese computer networks.

But the ultimate shark fin’s soup on China’s recent banquet card was an editorial in the Communist Party-controlled Global Times. “Snowden,” it acknowledged, “is a ‘card’ that China never expected,” adding that “China is neither adept at nor used to playing it.” Its recommendation: use the recent leaks “as evidence to negotiate with the U.S.” It also offered a warning that “public opinion will turn against China’s central government and the Hong Kong SAR [Special Administrative Region] government if they choose to send [Snowden] back.”

With a set of cyber-campaigns — from cyber-enabled economic theft and espionage to the possibility of future state-sanctioned cyber-attacks — evolving in the shadows, it’s hard to spin the sunny “new type of great power relationship” President Xi suggested for the U.S. and China at the recent summit.

It’s the (State) Economy, Stupid

The unfolding Snowden cyber-saga effectively drowned out the Obama administration’s interest in learning more about Xi’s immensely ambitious plans for reconfiguring the Chinese economy — and how to capture a piece of that future economic pie for American business. Essential to those plans is an astonishing investment of $6.4 trillion by China’s leadership in a drive to “urbanize” the economy yet further by 2020.

That will be the dragon’s share of a reconfigured development model emphasizing heightened productivity, moving the country up the international manufacturing quality ladder and digital pecking order, and encouraging ever more domestic consumption by an ever-expanding middle class. This will be joined to a massive ongoing investment in scientific and technological research. China has adopted the U.S. model of public-private sector academic integration with the aim of producing dual-use technologies and so boosting not only the military but also the civilian economy.

Beijing may, in the end, spend up to 30% of its budget on defense-related research and development. This has certainly been a key vector in the country’s recent breakneck expansion of information technology, microelectronics, telecommunications, nuclear energy, biotechnology, and the aerospace industry. Crucially, none of this has happened thanks to the good graces of the Goddess of the Market.

The pace in China remains frantic — from the building of supercomputers and an explosion of innovation to massive urban development. This would include, for example, the development of the southwestern hinterland city of Chongqin into arguably the biggest urban conglomeration in the world, with an estimated population of more than 33 million and still growing. A typical savory side story in the China boom of recent years would be the way that energy-gobbling country “won” the war in Iraq. The New York Times recently reported that it is now buying nearly 50% of all the oil Iraq produces. (If that doesn’t hit Dick Cheney right in the heart, what will?)

Dreaming of What?

As soon as he was confirmed as general secretary at the Chinese Communist Party’s 18th Party Congress in November 2012, Xi Jinping started to weave a “China dream” (zhongguo meng) for public consumption. Think of his new game plan as a Roy Orbison song with Chinese characteristics. It boils down to what Xi has termed “fulfilling the great renaissance of the Chinese race.” And the dreaming isn’t supposed to stop until the 20th Party Congress convenes in 2022, if then.

The $6.4 trillion question is whether any dream competition involving the Chinese and American ruling elites could yield a “win-win” relationship between the planet’s “sole superpower” and the emerging power in Asia. What’s certain is that to increase the dream’s appeal to distinctly standoffish, if not hostile neighbors, China’s diplomats would have to embark on a blockbuster soft-power charm offensive.

Xi’s two predecessors could not come up with anything better than the vague concept of a “harmonious society” (Hu Jintao) or an abstruse “theory of the Three Represents” (Jiang Zemin), as corruption ran wild among the Chinese elite, the country’s economy began to slow, and environmental conditions went over a cliff.

Xi’s dream comes with a roadmap for what a powerful future China would be like. In the shorthand language of the moment, it goes like this: strong China (economically, politically, diplomatically, scientifically, militarily), civilized China (equity and fairness, rich culture, high morals), harmonious China (among social classes), and finally beautiful China (healthy environment, low pollution).

The Holy Grail of the moment is the “Two 100s” — the achievement of a “moderately prosperous society” by the Chinese Communist Party’s 100th birthday in 2021, one year before Xi’s retirement; and a “rich, strong, democratic, civilized, and harmonious socialist modern country” by 2049, the 100th birthday of the founding of the People’s Republic.

Wang Yiming, senior economist at the National Development and Reform Commission, has asserted that China’s gross domestic product (GDP) will reach 90 trillion yuan ($14.6 trillion) by 2020, when annual per capita GDP will, theoretically at least, hit the psychologically groundbreaking level of $10,000. By 2050, according to him, the country’s GDP could reach 350 trillion yuan ($56.6 trillion), and annual per capita GDP could pass the 260,000 yuan ($42,000) mark.

Built into such projections is a powerful belief in the economic motor that a relentless urbanization drive will provide — the goal being to put 70% of China’s population, or a staggering one billion people, in its cities by 2030.

Chinese academics are already enthusing about Xi’s dreamscape. For Xin Ming from the Central Party School (CPS) — an establishment pillar — what’s being promised is “a sufficient level of democracy, well-developed rule of law, sacrosanct human rights, and the free and full development of every citizen.”

Don’t confuse “democracy,” however, with the Western multiparty system or imagine this having anything to do with political “westernization.” Renmin University political scientist Wang Yiwei typically describes it as “the Sinocization of Marxism… opening up the path of socialism with Chinese characteristics.”

Hail the Model Urban Citizen (aka Migrant Worker)

Of course, the real question isn’t how sweet China’s party supporters and rhapsodists can make Xi’s dream sound, but how such plans will fare when facing an increasingly complex and anxiety-producing reality.

Just take a stroll through Hong Kong’s mega-malls like the IFC or Harbour City and you don’t need to be Li Chunling, from the Chinese Academy of Social Sciences, to observe that China’s middle class is definitely dreaming about achieving one kind of westernization — living the full consumer life of their (now embattled) American middle-class counterparts.

The real question remains: On a planet at the edge and in a country with plenty of looming problems, how can such a dream possibly be sustainable?

A number of Chinese academics are, in fact, worrying about what an emphasis on building up the country’s urban environment at a breakneck pace might actually mean. Peking University economist Li Yining, a mentor of Premier Li Keqiang, has, for instance, pointed out that when “everyone swarmed like bees” to invest in urban projects, the result was a near bubble-bursting financial crisis. “The biggest risk for China is in the financial sector. If growth comes without efficiency, how can debt be repaid after a boom in credit supply?” he asks.

Chen Xiwen, director of the Party’s Central Rural Work Leading Group, prefers to stress the obvious ills of hardcore urbanization: the possible depletion of energy, resources, and water supplies, the occupation of striking amounts of land that previously produced crops, massive environmental pollution, and overwhelming traffic congestion.

Among the most pressing questions raised by Xi’s dream is what it will take to turn yet more millions of rural workers into urban citizens, which often turns out to mean migrant workers living in shanty towns at the edge of a monster city. In 2011 alone, a staggering 253 million workers left the countryside for the big city. Rural per capita income is three times less than urban disposable income, which is still only an annual 21,800 yuan, or a little over $3,500 (a reminder that “middle class China” is still a somewhat limited reality).

A 2012 report by the National Population and Family Planning Commission revealed that 25.8% of the population is “self-employed,” which is a fancy way of describing the degraded state of migrant workers in a booming informal economy. Three-quarters of them are employed by private or family-owned businesses in an off-the-books fashion. Fewer than 40% of business owners sign labor contracts. In turn, only 51% of all migrant workers sign fixed-term labor contracts, and only 24% have medical insurance.

As working citizens, they should — in theory — have access to local health care. But plenty of local governments deny them because their hukou — household registrations — are from other cities. In this way, slums swell everywhere and urban “citizens” drown in debt and misery. In the meantime, top urban management in Beijing, Shanghai, Shenzhen, and Chongqin is working to eliminate such slums in order to clear the way for the wildest kinds of financial speculation and real estate madness. Something, of course, will have to give.

When former World Bank chief economist Justin Lin Yifu warned that China should avoid “over-urbanization,” he nailed it. On the ground, President Xi’s big dream looks suspiciously like a formula for meltdown. If too many migrants flood the big cities and the country fails to upgrade productivity, China will be stuck in the dreaded middle-income trap.

If, however, it succeeds in such a crash way, it can only do so by further devastating the national environment with long-term consequences that are hard to calculate but potentially devastating.

We Don’t Want No Historical Nihilism

Xi, the dreamer, may simply be a master modernist PR tactician hiding an old school outlook. Hong Kong-based political analyst Willy Lam, for instance, is convinced that “ideologically Xi is a Maoist” who wants to maintain “tight control over the party and the military.”

Consider the political landscape. Xi must act as the ideological guide for 80 million Communist Party members. The first thing he did after becoming general secretary was to launch an “inspection tour” of the major southern city of Shenzhen, which in the early 1980s was made China’s initial “special economic zone.” In this, he was emulating China’s first “capitalist roader,” the Little Helmsman Deng Xiaoping’s landmark 1992 turbo-reform tour of the same area. It was undoubtedly his way of promising to lead the next capitalist surge in the country.

However, a fascinating academic and Internet debate in China now revolves around Xi’s push to restore the authority and legitimacy of the ur-Communist leader Mao Zedong. Otherwise, the president claims, there would be nothing left but “historical nihilism.” As his example of the road not to take, Xi points to the Soviet Union; that is, he is signaling that whatever he will be, it won’t be the Chinese equivalent of the USSR’s last leader, Mikhail Gorbachev, nor by implication will he lose control over China’s military.

Xi is indeed meticulous in his interactions with the People’s Liberation Army (PLA), always stressing “the dream of a strong China” and “the dream of a strong military.” At the same time, his attitude perfectly embodies the Communist Party’s grand narrative about its own grandness. Only the Party, they claim, is capable of ensuring that living standards continue to improve and the country’s ever-widening inequality gap is kept in check. Only it can ensure a stable, unified country and a “happy,” “harmonious” society. Only it can guarantee the continuing “rejuvenation of the Chinese nation,” defend “core interests” (especially what it refers to as “territorial sovereignty”), and ensure China, kicked around by other great powers in much of the nineteenth and twentieth centuries, global respect.

A Sinophile Western cynic would be excused for thinking that this is just a more elaborate way of stressing, as the Chinese do, that the might of the pen (bi gan zi) and the barrel of a gun (qiang gan zi) are the two pillars of the People’s Republic.

All of this was essentially sketched out by senior PLA colonel Liu Mingfu in his recently republished 2010 book, China Dream: Great Power Thinking and Strategic Posture in the Post-American Era. On one thing Liu and Xi (along with all China’s recent leaders and PLA commanders) agree: China is “back as the most powerful nation where it’s been for a thousand years before the ‘century of humiliation.’” The bottom line: when the problems start, Xi’s dream will feed on nationalism. And nationalism — that ultimate social glue — will be the essential precondition for any reforms to come.

In April, one month after the National People’s Congress, Xi repeated that his dream would be fulfilled by 2050, while the Party’s propaganda chief Liu Yunshan ordered that the dream be written into all school textbooks. But repeating something hardly makes it so.

Xi’s father, former vice premier Xi Zhongxun, was a man who thought outside the box. In many ways, Xi is clearly trying to do the same, already promising to tackle everything from massive corruption (“fighting tigers and flies at the same time”) to government rackets. (Forget lavish banquets; from now on, it’s only supposed to be “four dishes and a soup.”)

But one thing is certain: Xi won’t even make a gesture towards changing the essential model. He’ll basically only tweak it.

Fear and Loathing in the South China Sea

Everyone wants to know how Xi’s dream will translate into foreign policy. Three months ago, talking to journalists from the emerging BRICS group (Brazil, Russia, India, China, and South Africa), the Chinese president emphasized that “the China Dream also will bring opportunities to the world.”

Enter the charm offensive: in Xi’s new world, “peaceful development” is always in and “the China threat” is always out. In Beijing’s terms, it’s called “all-dimensional diplomacy” and has been reflected in the incessant global travel schedule of Xi and Prime Minister Li Keqiang in their first months in office.

Still, as with the dream at home, so abroad. Facts on the ground — or more specifically in the waters of the South China Sea — once again threaten to turn Xi’s dream into a future nightmare. Nationalism has unsurprisingly proven a crucial factor and there’s been nothing dreamy about the continuing clash of claims to various energy-rich islands and waters in the region.

Warships have recently been maneuvering as China faces off against, among other countries, Japan, Vietnam, and the Philippines. This unsettling development has played well in Washington as the Obama administration announced a “pivot” to or “rebalancing” in Asia and a new strategy that visibly involves playing China’s neighbors off against the Middle Kingdom in what could only be considered a twenty-first century containment policy.

From Washington’s point of view, there have, however, been more ominous aspects to China’s new moves in the world. In bilateral trade with Japan, Russia, Iran, India, and Brazil, China has been working to bypass the U.S. dollar. Similarly, China and Britain have established a currency swap line, linking the yuan to the pound, and France plans to do the same thing with regard to the euro in an attempt to turn Paris into a major offshore trading hub for the yuan.

Nor was it an accident that Xi’s first trip abroad took him to Moscow. There is no more crucial economic and strategic relationship for the Chinese leadership. As much as Moscow won’t accept NATO’s infinite eastward expansion, Beijing won’t accept the U.S. pivot strategy in the Pacific, and Moscow will back it in that.

I was in Singapore recently when Secretary of Defense Chuck Hagel dropped in at the Shangri-La Dialogue, an Asian defense and security forum, to sell the new U.S. focus on creating what would essentially be an anti-Chinese alliance in South and Southeast Asia, as well as the Pacific. Major General Qi Jianguo, deputy chief of the general staff of the PLA, was there as well listening attentively to Hagel, ready to outline a Chinese counter-strategy that would highlight Beijing’s respect for international law, its interest in turbo-charging trade with Southeast Asia, but most of all its unwillingness to yield on any of the escalating territorial disputes in the region. As he said, “The reason China constantly patrols the South China Sea and East Sea is because China considers this to be sovereign territory.”

In this way, the dream and nationalism are proving uncomfortable bedfellows abroad as well as at home. Beijing sees the U.S. pivot as a not-so-veiled declaration of the coming of a new Cold War in the Asia-Pacific region, and a dangerous add-on to the Pentagon’s Air-Sea Battle concept, a militarized approach to China’s Pacific ambitions as the (presumed) next rising power on the planet.

At the Shangri-La, Hagel did call for “a positive and constructive relationship with China” as an “essential part of America’s rebalance to Asia.” That’s where the new U.S.-driven Trans-Pacific Partnership (TPP) — essentially the economic arm of the pivot — would fit in. China’s Ministry of Commerce is reportedly even studying the possibility of being part of it.

There is, however, no way a resurgent Beijing would accept unfettered U.S. economic control across the region, nor is there any guarantee that TPP will become the dominant trading group in the Asia-Pacific. After all, with its economic muscle China is already leading the Regional Comprehensive Economic Partnership that includes all 10 members of the Association of Southeast Asian Nations (ASEAN) plus Australia, India, Japan, New Zealand, and South Korea.

In April, after visiting Beijing, Secretary of State John Kerry began spinning his own “Pacific dream” during a stopover in Tokyo. Yet Beijing will remain wary of Washington’s dreaming, as the Chinese leadership inevitably equates any dream that involves moves everywhere in Asia as synonymous with a desire to maintain perpetual American dominance in the region and so stunt China’s rise.

However nationalism comes into play in the disputed, energy-rich islands of the South China Sea, the notion that China wants to rule even the Asian world, no less the world, is nonsense. At the same time, the roadmap promoted at the recent Obama-Xi summit remains at best a fragile dream, especially given the American pivot and Edward Snowden’s recent revelations about the way Washington has been hacking Chinese computer systems. Perhaps the question in the region is simply whose dream will vanish first when faced with economic and military realities.

At least theoretically, a strategic adjustment by both sides could ensure that the dream of cooperation, of Chimerica, might prove less them chimerical. That, however, would imply that Washington was capable of acknowledging “core” Chinese national interests — on this Xi’s dream is explicit indeed. Whatever the confusions and difficulties the Chinese leadership faces, Beijing seems to understand the realities behind Washington’s strategic intentions. One wonders whether the reverse applies.

Print Friendly
Twitter19DiggReddit0StumbleUpon0Facebook76LinkedIn1Google+0bufferEmail

45 comments

  1. William C

    My worry is that we may be replaying the rivalry between Sparta and Athens when the established hegemon eventually felt the need to go to war against a rising power before it was too late. Can anyone reassure me the parallel is inappropriate?

    1. Banger

      I can.

      We live in a tightly interlocked international system a virtual or emergent empire. Nationalism is used by oligarchies to manipulate populations by blowing up conflicts so that they appear threatening to insure compliace by subject populations. There is no ideological conflict between the U.S. and China just competition between various sectors of various oligarchies sometimes defined by country but, increasingly, just defined by common interests. War, as Smedley Butler noted is a racket but in a different way than it was during his time–today it is a source of revenue for the armed forces so some kind of “threat” will be manufactured by both sides to the degree that its armed forces have real power in their respective countries.

      Fortunately in China and America these forces are subject to the finance sector and the public pressure to maintain prosperity. War, even a cold war, between China and the U.S. would create too many inefficiencies so it is out of the question.

      What conflicts there are center around energy. The U.S. wants to maintain an oil-based economy at all costs because it holds, militarily, the oil fields of the ME except for Iran which is why there is such an effort to overthrow the Iranian gov’t. China has acquiesced with this situation but that could change if it can develop alternative energy sources–not for environmental reasons but to make it less dependent on the U.S. for energy. But the train has left the station for a tightening of the international system and in a few decades none of that will matter, imho.

      1. Larry Headlund

        “We live in a tightly interlocked international system a virtual or emergent empire. Nationalism is used by oligarchies to manipulate populations by blowing up conflicts so that they appear threatening to insure compliace by subject populations. There is no ideological conflict between the U.S. and China just competition between various sectors of various oligarchies … War, even a cold war, between China and the U.S. would create too many inefficiencies so it is out of the question. ”

        Your analysis amy be a Great Illusion. The situation you sketch bears a striking relation to the situation in europe before the Great War, with China in the German role and the British empire in the US role. Contempory commetators declared a major war impossible for just the reasons your give.

    2. Eric Saunders

      The US is constrained by its the world order it created to some degree. There is no Cold War so we cannot quite justify our domination of the Third World the same way. China has the bizarre strategy of making business deals with those governments as opposed to installing puppet regimes or destabilizing them with jihadis. The US and the West has to act in increasingly flagrent gangster fashion to try and bring about a New American Century. The Iraq War, Libya, and Syria are the most obvious examples. The Global War on Terror is a sham whose role is to obscure that we are really competing with Russia and China for hegemony over the world’s energy heartlands.

      International law has always been a cruel joke, but fortunately the structure of the UN and the nuclear capabilities of our biggest rivals are limiting how crazy the US can be.

      I hope that somehow the gangster nature of the US Establishment becomes no longer deniable and we can start to devise some sensible way of improving life on this planet. We must get out of this straightjacket of militarism and failed neoliberal globalization. The death spiral of Sparta embarking on war, fearing its relative decline seems unlikely. Sadly, it is plausible enough to be worrying.

  2. jessica

    “In 2011 alone, a staggering 253 million workers left the countryside for the big city.”
    That can’t be right. 18% of the entire population of the country in one year?

    1. Fiver

      There are a number of “sloppy editing” errors in the piece. For instance, see the link to “explosion of innovation” which disproves the author’s claim, or the claim that China buys most of Iraq’s oil, when it is the US that buys more, at least in the full year of 2012:

      http://www.eia.gov/countries/cab.cfm?fips=IZ

      There are a couple other points I didn’t bother to check. Still and all, there’s enough real material, with enough range to get people thinking about the enormous challenges facing China, rather than portraying it as an enemy or “undemocratic, therefore evil” or some such idiocy.

      1. Yves Smith Post author

        China is Iran’s biggest oil customer (see http://www.ibtimes.com/iran-keeps-biggest-oil-customer-china-gets-us-sanctions-waiver-704947, for instance). The estimates vary considerably, and since there is no way to track shipments.

        The Economist Intelligence Unit, an entirely reputable outfit, puts exports to China at 50% of the total. So your sniffing about accuracy is unwarranted. This report is as of January 2013:

        .Four Asian countries are now purchasing nearly all of Iran’s oil exports according a report this week from the Economist’s Intelligence Unit (EIU).

        “Almost all of Iran’s oil exports now go to China, South Korea, Japan and India,” the report said even as it noted a sharp decline in the amount of oil each country purchased from Iran during 2012….

        Tehran has become especially dependent on China, which has long been its primary trading partner. Still, China is now estimated to purchase roughly 50% of Iran’s total oil exports despite having decreased its oil imports from Tehran by 23% year-on-year through the first 11 months of 2012.

        http://thediplomat.com/pacific-money/2013/01/05/asia-is-purchasing-nearly-all-of-irans-oil/

        I’ve written before as to how difficult it is to come up with any decent numbers in the oil market, including very basic stuff like supply and demand.

        The official # of migrants in 2011 was 158 million:

        The Chinese National Bureau of Statistics estimated the total number of rural migrants working in cities in 2011 at 158 million. The scale and pace of population movements confront the Chinese authorities with extremely challenging policy issues that call for a better understanding of the constraints to and motives of labour mobility.

        http://www.eastasiaforum.org/2012/12/29/mapping-rural-labour-migration-in-china/

        The WSJ read the same report and came up with 253 million, so Escobar is not making this up. There is some seasonal migration to cities, the WSJ might having included more categories:

        Urban dwellers account for 51.27% of China’s entire population of nearly 1.35 billion—or a total of 690.8 million people—the National Bureau of Statistics (NBS) announced at a news conference in Beijing on Tuesday….

        The social cost of urbanization is becoming increasingly evident, however, with 253 million rural migrants now living in Chinese cities with little or no access to public services, which they can only access in the villages where they are registered under the “hukou” or household-registration system.

        http://online.wsj.com/article/SB10001424052970203735304577166652002366514.html

        So the 253 million is not an Escobar error, the figure is straight from the Journal.

        1. Larry Headlund

          The WSJ figure is ” 253 million rural migrants now living in Chinese cities.”. That is 253 million cumulative to 2011, representing three decades of change, not 253 million in a single year, 2011, per the Escobar article.

  3. MyLessThanPrimeBeef

    If the British/American frame of reference in not the right one, if that peaceful transfer of hegemon-ship is not the right now, then Pepe’s claim ‘Why American worries of containing China are off the mark’ is off the mark.

    Because if it is not like the British/American transfer, it could be bloody.

    In that case, American worries of containing China are to be expected and appropriate, whether

    1. Xi’s dream comes true (without the British/American peaceful handover)

    or

    2. It actually turns into a nightmare and you have either
    a. a chaotic China destabilizing the whole region
    or
    b. military takes over and becomes a supersized North Korea.

    1. PaulW

      If it is to be bloody you can be sure the Anglo-Americans will be responsible for it, not the Chinese. One could argue the transition has started and as we see in the Middle East it already is bloody. Guess who is starting all these wars? Certainly not the Chinese.

      People need to remember that what threat the Chinese pose is to the elites who run America. It’s these elites who threaten every Americans standard of living.

      1. Eric Saunders

        Exactly. The Anglo-American elites are extremely shrewd and sinister. Only a massive effort toward propaganda and social engineering has been able to obscure this.

    2. Banger

      No way China becomes North Korea. China like all of the developed world is dedicated to globalism and that project is its No. 1 interest. The U.S. oligarchy has the same interest. So there is really no serious possibility of conflict unless there is a major economic depression which I believe is increasingly impossible barring major environmental disaster.

  4. Fiver

    Good to see a piece on China that raises real issues.

    I’d say it’s as certain as anything under the sun that the one outcome we won’t see is the realization of Xi’s “plan” calling for continued uber-urbanization at the precise moment in history when that model’s profound weaknesses have been revealed. China has destroyed its rivers and air, along with much of its forests and soils, while de-glaciation in the Himalayas is expected to cut its water supplies nearly in half by 2050. China’s leaders ought to be targeting much slower, more balanced, more survivable growth – as should we all.

    China has never had global power ambitions in the UK or US sense, and they appear to date to have learned the vital lesson from the demise of the Soviet Union that getting into a global military race with the US Empire, i.e., the entire rest of the world (as well as a then-hostile China) aligned on the opposing side, as was the Soviets’ hapless position, is a recipe for disaster. So long as the US can draw on the wealth of the rest of the globe on its own terms, China cannot possibly displace it. Those predicting the looming demise of the US confuse the destruction of democracy and egalitarian society with that of the Empire, which could conceivably continue right through the coming global catastrophes we’ve by our stupidity all but guaranteed.

    Signing onto US corporate globalization, however, has opened up a potentially fatal strategic weakness, that being global supply lines controlled by the US Navy. As the US economy cannot function without permanent war-making, China can only hope to maintain a credible deterrent to a direct attack, and search for the same “Holy Grail” the US is pursuing, i.e., a radical technical breakthrough that renders ballistics of all kinds useless. In the meantime, China must walk a fine line, above all not getting itself into any position it cannot walk back out of, face or no face.

    1. digi_owl

      Hmm, now the escalating use of US drones reminds me of the British use of airplanes in the post-WW1 years. Back then they tried to maintain “peace” in their empire while replacing army formations with bombers. Meaning that if some village turned uppity, the British would first warn and then bomb the village flat.

      1. Richard Kline

        The similarities are more than chance. The US stepped into the UK’s shoes both functionally and strategically, and from 1944 has done all possible to maintain the schematic of European-occupied countries in the RotW as ‘our extraction space.’ We are simply recapitulating the behaviors of Europe 1910-50 at this point, including our hyper-trophic imperial overreach, for us into SW Asia and Arica, just as for Europe, where both areas were only occupied at the last heave of empire, and quickly evacuated. The exact structure of events doesn’t repeat, but the strategic context remains sufficiently stable that the large moves sluice over the same terrain with the same shape of forces: the culture-political landscape of structure _forces_ a large measure of recapitulation. The ’causes’ change, but the effects iterate similarly.

        And the drone war is, ipso facto, a concession of logistical weakness. No territory will ever be governed or even dominated by such methodologies, it’s a ‘raise their costs of defiance’ approach when the imperator lacks the will or finance or ruthlessness to put boots on the ground in the number and villainy which victory requires. Britain bombed a few villages in Iraq, and was gone in less than a generation. That will be exactly the result of Bama’s Mookie Backshooting in Pashtunistan; assassinate a few, snarl, then flee when the checks at home start bouncing.

  5. Richard Kline

    As mentioned int the preamble, rural insurrectionism has been THE primary concern of the powers that bee in China for two millennia. Every national/Imperial government of the last 600 years that wasn’t a foreign occupation began from such an origin. This is why the Center has been so obsessed with brutalizing minor refusniks, wingnuts like the Falun Gong, and exceedingly peripheral elite demonstrations such as 1989, which had no peasantry involved. Rural popular forces have resulted in uprisings which have left tens of millions dead; of course that’s THE number one concern of the Center, however just or unjust their response to that may be. (And that response is often very unjust, and must be criticized as such.) And the CCP under Mao and his associates was _not_ the most recent insurrection of this type: the Cultural Revolution under Mao was, and that devastated a generational cohort and cost a generation of economic development.

    China ‘forcing a 250M resettlement?’ The bulk of the rural population want’s nothing MORE than to be permitted to move to the cities and legally settle, that’s manna from heaven to them. The main reason we see ‘social unrest’ in China is exactly because migrations officially barred, leaving migrants impoverished, indebted, and preyed upon by corrupt urban officials. Solving that issue isn’t ‘Xi’s dream,’ it’s the most basic of real political responses to the context. Chinese poor detest the newly rich, foreign shadow speculators, a foreign badgering generally. It should be no surprise if Xi and his like cut some of those down to size. If the Chinese Center pulls this off, and there’s every reason to think they will, they guarantee the popularity of the Party and it’s monopoly on power for another generation. What other course _would_ they pursue? “They’ll harm the birds and the bees!” Well . . . yeah. And what other course would one advise them, to hold the rural population in the country side at gunpoint, which is the alternative? Of course there is going to be mass urbanization, China has stalled this because there simply wasn’t the economic infrastructure to possibly manage it.

    But there is now. China, doing all this tech transfer and tech manufacturing buildup on the hurry up ‘for defense?’ China needs all that for many other reasons, not least to maintaing modern urban facilities for close to a billion. We’ve heard much chat in the last few years about ‘a bubble in real property’ and ‘gross overbuilding of infrastructure’ which will ’cause a CRASH.’ Sooo if we have 250M moving to the cities, much of that real estate speculation will prove to be fantastically _profitable_ for the holders in destination cities. What looked distorted on a five-year time frame looks like the obvious bet on a twenty year time frame. Huge fortunes were made in California and Texas buying up the land and building for those to come when demographically and politically that was bound to occur. So again. And while substantial portions of China’s recent infrastructure build out are substandard and won’t pay, the larger reason for that wasn’t just ‘rail beds to nowhere to sustain employment’ but _exactly to lay the ground work for a sustainable rural-to-urban shift. Of course chunks of that was graft-drive by local authorities—who are hated locally for it, and which the Center can blame and castigate for such failings. There really has been a Grand Design in all this, and more or less it is working to plan on schedule. That’s m view. And excesses matter far less if the Center simply garrotes a few banks/bankers/politicos and prints money to paper over the problem. (We’re doing the latter in the US: how about some more of the former? Oh but I get it: that would be illiberal.)

    Yves: : . . . [W]e may instead see a change from a world where an overextended US is still dominant to one of jockeying major countries and power blocs.” We already have seen this; it’s been in place for a dozen years. The China-Russia accord over that time established the basis for a bloc-set world. That alliance will never be as close or as functional as US-EU+Little England. The second signature of such a bloc formation was when Vietnam established a broadly neutralist position rather than going a US dominated slate. If China was ‘containable,’ Vietnam would have gotten on the other side, but the gray heads there have been smart enough to try and triangulate rather then set themselves up as a sacrifice zone, which is all they would be for the US. The third indication of such a bloc was the non compos mantis US response to Chinese economic penetration in Brazil. There can be no unipolar outcome when the largest and crucial economy in South America pivots to ‘the other bloc.’ This is so well established that we even have the acronym BRIC, though India isn’t politically involved, and a strategic alliance isn’t formalized. The world is settled into blocs.

    As far as ‘those offensively armed Chinese,’ this just isn’t happening. Not that it can’t, and in two generations it may well. China’s strategy has been overwhelmingly defensive in structure. The point is to break geographic containment attempts and to establish sufficient commodity partners that efforts to economically besiege China will fail. Most hostile US actions _aren’t responded to at the same level OR AT ALL_. China isn’t looking for provocations and often avoids those in place, outside of the East and South China Seas, which as articulated by the surely authorized utterance, are sen as sovereign territory which must be defended, fairly or unfairly. It isn’t a surprise that China is building up major economic regions far in-country, just as economic resources have long been geographically dispersed to offset hostile threats coming from American air and ballistic superiority. In my view, any military strategic offensive posture by China is _most highly unlikely_ so long as they are in an inferior or fragile economic position. Being forced into a militarized containment contest while their economy collapses leading to mass rural unrest is China’s deepest strategic anxiety and surely the USA’s deepest, fondest, dream. China will move to avoid any kind of precipitating crisis that might lead to that until China’s internal economy and resource co-dependent net are sufficiently strong and reliable to withstand the stresses. Then, who knows?

    By far the best ‘offensive strategy’ which China could pursue, to me, would be to launch a convertible currency at the point their economy is large enough for them to maintain control of that. The US refuses to discipline it’s now financial system, and has let the predators therein cannibalize the real economy. With a really well funded competitor bloc backed by a real economic base that was integrated and expanding, I’d strongly be on China an their bloc in an ‘econo-financial confrontation.’ And I think the US has the same fear which is why we see this clumsy and late-off-the-blocks attempt at a pre-containment. But it’s too late for that. If the US wants to sustain an advantage in a two-bloc world, pinching China is a bad bet. Better we get our own house in order—but there’s no way in hell the minds at the top here take that course. China just needs to keep doing what it’s doing to come out ahead. And if so, from the standpoint of world history that’s just how it goes.

    1. Banger

      Great comments and I largely agree.

      As I’ve commented elsewhere, I don’t think China or the U.S. is interested in any kind of military conflict though those parts of their respective oligarchies who profit from “defense” will do their best to manufacture conflicts. All oligarchies in the world agree that there should be one robust world system and that is what they are building, successfully in my opinion. That system is not friendly to human rights or democracy but not completely hostile either.

      People worry about financial issues, real estate bubbles and so on. I believe the oligarchies have learned from the 2008 crisis which was nothing more than large scale criminal activity by folding in the criminal elements into the power elite so that everyone has a stake in maintaining whatever financial fictions seem convenient.

      In the next few decades we will move from a true market-based financial system to a carefully managed international system where money will be valued at what the international system says it will be valued as while, at the same time, maintaining the appearance of a market and the ability to make sure that speculators can create managed bubbles. Not to say that all this is totally inevitable but that is the process that the international oligarchies have initiated.

    2. TomDor

      I agree with your points. The trigger mechanism is already in place. China spent their money on infrastructure and cities – largely funded via offshore hot money, the shadow banking centers and export surpluses – Using other peoples money. Now they just have to crash the speculators in real estate – even the ones internally that have made big money in real estate the internal ones who sold out to capitalism and all it’s glitter. Once they do this – a plan in action for decades. A plunge in real estate values and state control thereof will impoverish and place blame upon those capitalists for which much ire is built into the populace – the blood letting will happen to those at the top. Anyway, the economic basis for their production will be much lower than elsewhere – instead of bleeding the labor portion of production for the oligarchs profit… they will bleed the economic rent extractors of their money – any economic rent activities will be taxed back into the economy at 100%.
      In other words – a new labor revolution. Workers will be able to afford to live and survive at a much lower economic basis. A 2,000 dollar income will afford the same standard of living as a 90,000 dollar income in the west – a little exagerated for this example. Point being, the economic basis of working and living will be much lower than here – economic rent extraction – which has it’s basis in the other component of production – land – will be free of predatory wealth extraction – that vig can then go to workers in the form of demand as opposed to the oligarchs and kleptocrats and other nations churning their economy.

      I may be way off but, why else invest in empty cities without the goal of dominating world resources and internally lowering the cost of doing business and living in the real economy compared to the rest of the world – why not devise a plan to choke off those that are syphoning off the standard of living for most of your people by extracting economic rent and plunging people into poverty without respect for the nation and it’s people in which they live.
      Didn’t france create the guillotine for this purpose.

      I may be rambling but, we in the USA are letting our infrastructure go fallow – why would we do that when infrastructure development lowered our cost of doing business and living in the past and made us globally competative? I will tell you why we are destroying our schools, infrastructure, public universities, transportation and all the other commons – because private interests (the predatory economy) the oligarchs see private profit and rent extraction (easy money) from what has been bought and paid for by public money – rent extractors want to financialize the public weil for price increases in a monopolistic structure – the easiest money of all – they care not about the people who use and created this honey pot for public use – just private profit.

    3. mookie

      Richard Kline said, “We’ve heard much chat in the last few years about ‘a bubble in real property’ and ‘gross overbuilding of infrastructure’ which will ’cause a CRASH.’ Sooo if we have 250M moving to the cities, much of that real estate speculation will prove to be fantastically _profitable_ for the holders in destination cities.”

      This is like someone in 2005 arguing that all the ludicrously expensive real estate will be bought up by all the migrant farm workers, so there’s really no bubble. That 250 million represents real moving-from-my-town-with-no-electricity-or-running-water poverty, not just-graduated-with-a-BA-and-can’t-find-a-job poverty. Not a chance in hell they’ll be buying real estate.

      There’s a massive credit bubble in China as investors and developers get fat on cheap money and build shoddy apartment buildings that all too often don’t qualify as infrastructure. Sometimes, as in the ghost cities western reporters love, it’s government-driven, other times it’s just the effect of policy creating easy loans.

      1. from Mexico

        And evidently China’s 250 million immigrant workers are not sufficient fodder for China’s slave labor industry, thus the new urbanization mandate to drive more peasants from the land and into the urban centers.

        This process is not unique to China. What is unique to China, as well as India and Africa, is the lightening speed with which they plan to drive the peasants from the land. In Mexico it began with the dictatorship of Porfirio Díaz, which lasted from 1876 to 1910, and has only recently neared completion. The last phase was NAFTA, which drove millions of peasants who could not compete with the US’s massively subsidized agriculture industry either into Mexico’s vast urban slums, where they serve as fodder and slave labor for the maquiladoras, or across the border to the United States, one of the largest mass migrations ever know to mankind.

        Both Africa and India have similar urbanization ambitions as China’s, which are explained here:

        http://www.youtube.com/watch?v=O_pKnP-2mOQ

        And here:

        http://www.outlookindia.com/article.aspx?250418

        Besides the need for vast numbers of workers to toil away at slave wages, there’s also the issue of the land, which Arundhati Roy explains:

        The battle for land lies at the heart of the ‘development’ debate… The battle for land lies at the heart of the ‘development’ debate. Before he became India’s finance minister, P. Chidambaram was Enron’s lawyer and member of the board of directors of Vedanta, a multinational mining corporation that is currently devastating the Niyamgiri hills in Orissa. Perhaps his career graph informed his worldview. Or maybe it’s the other way around. In an interview a year ago, he said that his vision was to get 85 per cent of India’s population to live in cities. Realising this ‘vision’ would require social engineering on an unimaginable scale. It would mean inducing, or forcing, about five hundred million people to migrate from the countryside into cities. That process is well under way and is quickly turning India into a police state in which people who refuse to surrender their land are being made to do so at gunpoint.

        By 1910, when the dictatorship of Porfirio Díaz ended, U.S. property in Mexico amounted to 100 million acres, including much of the most valuable mining, agricultural, and timber land, representing 22 percent of Mexico’s land surface. The complexes owned by William Randolph Hearst alone extended to almost eight million acres.

  6. Hugh

    China, like the US and Europe, is a kleptocracy. We should ascribe no more importance to Xi’s statements than we would to Obama’s. The only real interest in either is a better understanding of the propaganda each is peddling and the agendas which lie behind that propaganda.

    The math also behind China as a great exporting engine has pretty much run its course. Indeed a host of bubbles has been needed to extend the life of the exporting model. And if this export model is overextended now, I don’t see how it can be used to convert to one dominated by internal consumption. I mean China’s export sector has to feed off of and loot Chinese savings to keep up investment. So where is this internal consumption going to come from? And of course this problem is only made worse by the great wealth inequality in China. And those bubbles will have to be dealt with as they burst as well.

    1. Banger

      China is large enough to have a strong internal market at this point and because most sectors of the population recognize the need for a strong central gov’t the will coalesce around firm actions taken to insure the common good. So should markets fail in the rest of the world–China can simply decree the value of their currency and print Monopoly money if they have to keep the wheels spinning–there is no actual need, from a systems point of view for currency to have “real” value based in the marketplace–you can simply rig the market to the values you want if a large number of people agree to that. The Chinese people are smart enough to know the alternative and they are not ideologically attached to the Western market system which, at any rate, will be replaced by a quite elaborate neo-feudal system more resembling China/Singapore than Western countries.

      1. psychohistorian

        I agree. There is no reason that China cannot take its currency at this time and stand alone in the world w/o the US dollar. And they are already showing they are ready to do so.

        The US doesn’t understand that they/we are an empty shadow of the manufacturing giant we once were for our relative population.

        China has a chance to “live in the future” where America seems stuck in the past while their military might is abused to make profit for the Imperialists.

    2. from Mexico

      @ Hugh

      I have to throw my hat in with you.

      China, the US and the EU are all highly dysfunctional societies, led by pathocrats/kleptocrats who, despite their delusions of grandeur, are not nearly so omnipotent as they believe themselves to be. The sense I got from Escobar’s article is that they’re all feckless dreamers, completely divorced from any “facts on the ground,” any number of which could blow up in their faces at any time.

      Any sane person who drops in on this world is bound to feel like Gulliver visiting the Royal Academy of Lagado, with its solemn “projectors” laboring to extract sunbeams from cucumbers,’ build houses from the roof down and restore the nutritive value of human shit, all convinced of the value of their work.

      1. from Mexico

        The Chinese government treats the 250 million migrant workers who are the engine of China’s economic miracle like shit, as this documentary explains:

        http://www.youtube.com/watch?v=BqGmCq0hUBk

        The Chinese government keeps them isolated, marginalized, deprived of political rights and poor, toiling away for an average wage of 80 cents per hour.

  7. Aussie F

    China has some major problems – demographic, environmental, and economic. The current state is little more than a security contractor for foreign capital, offering cheap labour to foreign corporations. Much of the countries soil is degraded and they’re facing servere shortages of fresh water. The working population is actually declining, and the government is facing thousands of uprising every year.

    China can’t be bullied, but they’re a long, long way from even regional dominance.

    1. Banger

      Yes, China has many problems but they have the intellectual and moral capital to solve them. China, unless I’m misreading it, is dominated by an oligarchy that is sold on rational solutions to the countries problems–that gives them a big step up from, say the U.S. Our oligarchies are opposed to any rational solution and are still using U.S.G. policies to line their own pockets with little regard for the future. I think this tendency will change, over time, here as our oligarchies stabilize now that the democracy as a practical matter is fading.

      In China the populace has little interest in “democracy” as such–their interest is practical–they want prosperity and however that can happen they favor it. Chinese culture has an deeply held belief in strong central governments–anybody who has studied Chinese history learns that what the Chinese people fear the most is a weak central government–as long as the Chinese oligarchs can stay an oligarchy and not descend into kleptocracy then things will be ok for them.

      1. Massinissa

        In China, the Oligarchs try and prop up the government because a healthy state of the country is key to their interests.

        In America, our transnationalist capitalists try and consume our government and destroy it, because, being transnational, they can always move somewhere else.

        The Chinese oligarchs are no more moral than ours are, but China has the advantage of having the interests of their oligarchs coinciding with the interests of the state (if not necessarily the nation), while our Transnational Capitalists just want to eat what they can and run without paying the bill.

        If only we could put collars on our damn capitalists! The Chinese oligarchy is hardly ideal, but our capitalists are so blindsided by IRRATIONAL greed that the relatively rational self preservation instincts of the Chinese oligarchy is almost desirable in comparison. Our capitalists have absolutely lost their minds.

  8. Schofield

    It’s now possible courtesy of the American research expertise of Edward O. Wilson and Martin Nowak at Harvard University to see this all more simply. Wilson and Nowak have helped determine that in addition to the two primary driving forces of life natural mutation and natural selection a third exists natural cooperation:-

    http://faculty.washington.edu/beecher/Nowak%20etal%20-%20evolution%20of%20eusociality%20-%20Nature%202010.pdf

    http://isites.harvard.edu/fs/docs/icb.topic426436.files/five_rules.pdf

    To aid the effectiveness of natural cooperation we have developed the social technolgy of money. Indeed Adam Smith in his 1776 book the “Wealth of Nations” had a glimmering of this when he wrote:-

    “A prince, who should enact that a certain proportion of his taxes should be paid in a paper money of a certain kind, might thereby give a certain value to this paper money; even though the term of its final discharge and redemption should depend altogether upon the will of the prince.”

    (Adam Smith. “Wealth of Nations” Book II, Chapter II. 1776)

    A modern interpretation of this can be understood in this recent article of JD Alt’s:-

    http://neweconomicperspectives.org/2013/06/let-it-be-done-an-alternative-narrative-for-building-what-america-needs.html

    The interpretation is that of the Chinese Communist Party in the sense that it thoroughly understands Modern Money Theory, or MMT as the abbreviation, and helps explain a primary reason why China has experienced very high growth rates over the last thirty odd years. Such understanding will help ensure on current indications why China will take over from the United States as the world’s dominant military force despite the problems China is currently experiencing with its Western capitalist inspired shadow banking excesses.

    Indeed we are now witnessing a second re-run of the use of MMT theory for military domination through the use of money as a social cooperation technology since it was used by Adolf Hitler and the Nazis.

    1. Mansoor H. Khan

      Yes. We need MMT and we need to get rid of debt based currency issuance:

      More at:

      http://aquinums-razor.blogspot.com/2011/02/give-500-per-month-to-each-us-citizen.html

      But peak oil limits what MMT can do right now. We should still do the “social credit” thing I suggest in the above link or else we will have social chaos in America.

      However, to reign in peak oil driven inflation spending of the high spenders in our economy will have to be curbed via a consumption tax of some kind (not an income tax),

      Increased Economic Activity Means => Increased Fossil Fuels Consumption.

      Mansoor H. Khan

      1. Banger

        No economic growth does not need to equal increased use of fossil fuel. At this time the markets are fixed to create your equation but only because the game has been fixed that way. Another game could be put into place.

      2. Schofield

        Correct. This point is made in JD Alt’s article that MMT enables socities to introduce “smart” taxes. Personally I’m interested in a variant of Robert Frank’s consumption tax.

  9. John F. Opie

    Interesting post in general, but two comments: first, you don’t need a navy to be a superpower and second, wanting something to be so doesn’t make it so.

    First: the only time you need a navy to be a superpower is when you want to project power and keep your enemies at arm’s length (at least as far as non-nuclear, conventional warfare is concerned). China considers itself to be the Kingdom of the Middle, i.e. to be at the center of everything, with the barbarians surrounding China to be either defeated or assimilated as needed. This is what has driven China’s national interests since the days of the first unification of China by the Qin Dynasty back in the third century BC. China and completed by the Han Dynasty several hundred years later.

    As such, Chinese governments of more than one form or another have never really felt the need for anything more than a coastal navy: the first such in the Song period was unusual in that it operated basically as a single fleet, escorting trading ships through pirate waters and doing some exploring, but only as a unified fleet of several hundred ships, rather than the single or small groups of ships that Western explorers used. As such it was of limited use (a fleet that only operates as a totality can’t be split up, limiting its utility) and was scuttled, literally, when the government decided to concentrate on inner perfection (i.e. within China) and any attempts to create a navy were actively discouraged.

    What’s different today? Well first the Chinese learned how useful flexible fleets of ships can be when used against them, but that doesn’t require a fleet-in-being to defend against, but rather good recon assets and heavy long-distance weapons to deny sea control off the Chinese coast. This failed during the conflict with the West during the last decades of the Qing Dynasty when the British destroyed what little fighting ships the Chinese had, as well coastal fortifications because the Chinese had ignored technological developments.

    That’s not happening today. The only reason for an ocean-going Chinese fleet-in-being is to creat the political option for the Chinese government of being able to put bodies in harm’s way to achieve political gains (okay, that’s the reason for any fleet-in-being). The Chinese seem to be following their industrial policies as well: try a bit of everything (let a thousand flowers blossom) and see which works the best, in terms of what ships are being built and what purposes they serve.

    The ex-Russian aircraft carrier can be largely discounted except as a learning tool and a capital asset to use against those who lack adequate air defenses. The time to become significantly concerned that the Chinese are turning themselves into a serious opponent is when they start building their own designs based on their own operational needs. Otherwise, it’s just talk.

    Now, the China Sea: just because China thinks it’s theirs doesn’t make it so. The conflicts over small islands and shoals is a conflict about who gets to use the hydrocarbons on the sea floor: while the International Law of the Sea (which China has ratified, by the by, allows some extended exclusive economic rights. This is the critical point: the maximum that a signatory may claim may never exceed 350 nautical miles (650 kilometres; 400 miles) from the baseline; or it may never exceed 100 nautical miles (190 kilometres; 120 miles) beyond the 2,500 meter isobath (the line connecting the depth of 2,500 meters).

    While this covers a large chunk of the South China Sea, it does not cover it all. China’s position is that its claims extend out to the full extent of the continental shelf, which, if you’re charitable and let it include depths beyond 200 meters, does include virtually of that area. Just because China wants all the resources there (largely because of their poor record with sensible allocation of scarce resources) doesn’t mean that they have the right to exclude everyone else, especially given that their claimed zone goes right up to the contigious zones of Viet-Nam, the Philippines, Malaysia and Brunei. This conveniently, for the Chinese, ignores those countries’ exclusive economic usage zones as per the Law of the Sea.

    These countries have every right to be very suspicious, at the least, of Chinese motives and behavior: for this reason they are moving closer and closer to an anti-China coalition. Chinese nationalism is seriously counter-productive here, and the author is absolutely correct in saying that such nationalism will be the real problem in the next several years.

    1. Yves Smith Post author

      China’s own actions say they disagree. They NOW have a bigger navy than the US in terms of ships (although not capacity) and are targeted to exceed us in the next decade or so (they have huge capacity to build ships).

      You can’t be a superpower unless you can land large numbers of troops for an invasion/occupation. And a navy can impose imbargoes and interdict supplies. The struggle for naval dominance was a huge part of WWI and WWII, and our meddling in the Middle East would be impossible without our large navy.

      1. Ano

        I tend to think China’s build up is in response to US moving its military concentration to Pacific particularly in bases surrounding China in Japan, S Korea, Phillipines, Australia, Guam,…any country in their right mind will not view US moves as friendly and peaceful unless you are US ally. Just think how US would feel if Russian bases keep springing up in countries neighboring USA and almost daily russian nuclear subs, carriers, destroyers, frigates, most advanced jets and stealth bombers, drones, keep showing up to show muscles(or threats) and conduct unending war games in front of one’s house.

      2. John F. Opie

        Thanks for the comment.

        1) The Chinese order of battle is 515 ships, of which 231 are coastal patrol vessels (and of no use far from the coast). They currently have 142 blue-ocean going capital ships and only 5 ocean-going resupply ships. They have little or no experience of combined arms fleet operations and it will take them, literally, decades to come up to speed. They need to be spending significant periods of time out on the deep blue in order to gain crew expertise. Thay are doing this only on a limited basis with the most modern of their ships. They’ve reduced their plans to increase their sub fleet into a large ocean-going force, preferring to work on quiet subs for coastal defense, which is actually very sensible based on their levels of expertise. Capacities are far more important than the mere number of platforms.

        2) **We** can’t be a superpower without that ability: that doesn’t mean someone else can’t be. The ability to effectively prevent the US from exercising its superpower abilities is more than adequate at this point in time: China aims at controlling what it calls the “First Island Chain” on the borders of China and that is what they need to deny US ability to coherently project force if, say, the Chinese decided to annex Taiwan. No need to quibble, though, over the definition of super-power: China is nuclear-armed, has a large standing military and states its interests go outside its borders.

        3) As always, the difference between capabilities and intentions is critical: while we know what the Chinese are building and what they have announced, we don’t always know their intentions except what can be gleaned from their press (same problem back in the Cold War days). It’s clear that they want/feel the need to have control over the First Island Chain to keep the US away from its extremely vulnerable population (a US strike, say, on the Chinese dam system would devestate the country), it’s not so clear what that really means for the neighboring countries: if anything, it’s a hegemony move by China along the old Russian sentiments of the best way to deal with neighboring countries is to have them either on your side or so thoroughly cowed that they wouldn’t comprehend resisting Chinese moves.

        In any case, the bordering countries have no desire to be dominated by China. Chinese nationalism, coupled with clumsy diplomacy and a failure to understand the security needs of their neighbors, may prove to make the Chinese learn first-hand what it means to be an “Ugly American”, this time as “Ugly Chinese”. They’re already well along that path, as far as the Philippines and other countries bordering the South China Sea are concerned…

    2. Ano

      From arguments by all so far, China seems to have no less merits or supported claims than the other claimants. Further, South China sea is the only relatively open sea access left to China, less over-shadowed by US military bases around east Asia.

  10. Susan the other

    Just wondering if Snowden’s agenda was to drive a deeper wedge between the US and China – and to what end? Even as he seeks and receives political asylum in HK/or thereabouts. The best point Escobar made was that the US model of consumerism is totally unsustainable for China. I see that as a good thing that will change the world. And as far as our control of ME oil goes, it makes sense that we control it not for profit but to prevent any new military from becoming too powerful and mobile. I can’t believe China has such grandiose plans, aka dreams. To build up all those urban centers at a cost of many trillions of dollars will require 50 years to retire the debt. Certainly not by 2021. Sounds more like bread and circuses.

  11. washunate

    Great read. I’m definitely of the camp that thinks there’s nothing to worry about from a multipolar world. It is long past time for the interventionist wings of both parties to back off.

    Since we seem unable to do that domestically, Russia, China, India, Iran, and others reasserting themselves may be the required external ingredient.

  12. asian

    missing the real issus,
    Jew-propaganda-machine are using china to play an distraction for Israel/jew’s interest, nor American interest,
    Israel all come first, at any cost,
    USA is Israel/jews last hope to survive.

  13. bnc626

    China is just going to collapse just like america! China is now having a ripple effect in its economy because all of those “cheap labor Chinese” are going to start demanding more money and better health care just like American workers…. its only a matter of time! Soon their “cheap labor” will be “cheap” no longer, so the big corporate america better enjoy it while they can

Comments are closed.