American policymakers are having to deal with an increasingly mystifying China.
The giant culture that is less than a nation-state but far more than an amorphous one and half billion people is, perhaps inevitably, moving rapidly in different and conflicting directions. As always is the case in a world of jungled conflicts, the U.S. must hope for the best but prepare for the worst. And that worst could be an inevitable conflict over basic American international policy, not least, freedom of the seas.
The Chinese are continuing to build what can only be called military bases in a barrier across one of the most strategic commercial route in the world through the South China Sea. It may take years before the Chinese can project sufficient power from those reconstructed coral shoals to challenge the U.S. Navy. But the world moves faster and faster, and assurances that we are technologically meeting the threat of asymmetrical warfare in which the Chinese traditionally have excelled has to be periodically reexamined
China continues spending in her own terms vast resources on these bases and on the expansion of her military, particularly her seapower. That’s despite the fact that her economy has drifted – one could say inevitably – into slower rates of growth than the double-digit increases of the past three decades. The actual drop, always subject to speculation because of Beijing’s “create accounting”, is perhaps less important than the speed at which she is slacking off.
This has already impacted world commodity markets where China custom had caused high growth, and those countries – including Russia — which had been sucked into single product export patterns. Beijing’s galloping economic invasion of raw material producers, particularly in Africa, where infrastructure projects were sold as a “swap” for raw materials, are in trouble. That’s telling in such countries, such as Angola, with the energy price halving in no small measure because of the Shale Revolution in the U.S. American lower prices and a gas surplus has sent the oldtime oil price guardians such as Saudi Arabia, and now Iran, pumping as fast possible to maintain market share. But in Southeast Asia Beijing continues to push subsidized giant railroad and highway construction and damn the home finances.
These gambles have been matched by an unprecedented campaign against corruption by Pres. Xi Jinping in his effort to create a new personality political culture matching that of the fabled Mao Tse-tung. These campaigns in the past, while based on evidence in a totally corrupt society, actually are intended to eliminate opposition within the ruling one-party Communist state. More recently, Xi has gone further afield than just high Party officials, and named multi-billionaire Party-favored oligarchs. That seems inevitably another economic gamble given the slowing economy.
In fact, Xi – despite criticism within and without the Party that they were the greatest obstacle to economic progress – has enhanced the power of the government-owned huge behemoths with near monopolies. Whittling them down and their political hold on credit for a move toward the tiny private sector and most of all, increased consumption, was supposed to be the order of the day. But it is not happening.
The Obama Administration, for the most part, is tip-toeing around all these issues and the puzzles they present for American policy in Asia, and, indeed, in the world. Cutting back on the U.S. military at a time of aggressive Chinese rhetoric and movement is not exactly apt. Minor tinkering with currency manipulation and export subsidies, which will probably expand given the Chinese slowdown, is not an answer to the loss of American manufacturing, now interestingly enough also moving away from China toward more low-wage countries.
China policy has, of course, been a major battleground for American strategists for the past half century or more. But it is looming still larger and the next administration, whatever and whoever it is, had better come with some preparation.