Blundering Into A War With China

China: War On The Horizon?

Dispatches From The Edge

Jan. 27, 2017

 

In his Jan. 13 testimony before the Senate Foreign Relations Committee, Secretary of State nominee Rex Tillerson made an extraordinary comment concerning China’s activities in the South China Sea. The U.S., he said, must “send a clear signal that, first, the island-building stops,” adding that Beijing’s “access to the those islands is not going to be allowed.”

 

President Trump’s Press Secretary, Sean Spicer, repeated the threat on Jan. 24.

 

Sometimes it is hard to sift the real from the magical in the Trump administration, and bombast appears to be the default strategy of the day. But people should be clear about what would happen if the U.S. actually tries to blockade China from supplying its forces constructing airfields and radar facilities on the Spratley and Paracel islands.

 

It would be an act of war.

 

While Beijing’s Foreign Ministry initially reacted cautiously to the comment, Chinese newspapers have been far less diplomatic. The nationalist Global Times warned of a “large-scale war” if the U.S. followed through on its threat, and the China Daily cautioned that a blockade could lead to a “devastating confrontation between China and the US.”

 

Independent observers agree. “It is very difficult to imagine the means by which the United States could prevent China from accessing these artificial islands without provoking some kind of confrontation,” says Rory Medcalf, head of Australia’s National Security College. And such a confrontation, says Carlyle Thayer of the University of New South Wales, “could quickly develop into an armed conflict.”

 

Last summer, China’s commander of the People’s Liberation Army Navy, Wu Shengli, told U.S. Admiral John Richardson that “we will never stop our construction on the Nansha Islands halfway.” Nansha is China’s name for the Spratlys. Two weeks later, Chang Wanquan, China’s Defense Minister, said Beijing is preparing for a “people’s war at sea.”

 

A certain amount of this is posturing by two powerful countries in competition for markets and influence, but Tillerson’s statement did not come out of the blue. In fact, the U.S. is in the middle of a major military buildup, the Obama administration’s “Asia Pivot” in the Pacific. American bases in Okinawa, Japan, and Guam have been beefed up, and for the first time since World War II, U.S. Marines have been deployed in Australia. Last March, the U.S. sent B-2 nuclear-capable strategic stealth bombers to join them.

 

There is no question that China has been aggressive about claiming sovereignty over small islands and reefs in the South China Sea, even after the Permanent Court of Arbitration at The Hague rejected Beijing’s claims. But if a military confrontation is to be avoided, it is important to try to understand what is behind China’s behavior.

 

The current crisis has its roots in a tense standoff between Beijing and Taiwan in late 1996. The People’s Republic of China (PRC) was angered that Washington had granted a visa to Taiwan’s president, Lee Teng-hui, calling it a violation of the 1979 U.S. “one-China” policy that recognized the PRC and downgraded relations with Taiwan to “unofficial.”

 

Beijing responded to the visa uproar by firing missiles near a small Taiwan-controlled island and moving some military forces up to the mainland coast facing the island. However, there was never any danger that China would actually attack Taiwan. Even if it wanted to, it didn’t have the means to do so.

 

Instead of letting things cool off, however, the Clinton administration escalated the conflict and sent two aircraft carrier battle groups to the region, the USS Nimitz and USS Independence. The Nimitz and its escorts sailed through the Taiwan Straits between the island and the mainland, and there was nothing that China could do about it.

 

The carriers deeply alarmed Beijing, because the regions just north of Taiwan in the East China Sea and the Yellow Sea were the jumping off points for 19^th and 20^th century invasions by western colonialists and the Japanese.

 

The Straits crisis led to a radical remaking of China’s military, which had long relied on massive land forces. Instead, China adopted a strategy called “Area Denial” that would allow Beijing to control the waters surrounding its coast, in particular the East and South China seas. That not only required retooling of its armed forces—from land armies to naval and air power—it required a ring of bases that would keep potential enemies at arm’s length and also allow Chinese submarines to enter the Pacific and Indian oceans undetected.

 

Reaching from Russia’s Kamchatka Peninsula in the north to the Malay Peninsula in the south, this so-called “first island chain” is Beijing’s primary defense line.

 

China is particularly vulnerable to a naval blockade. Some 80 percent of its energy supplies traverse the Indian Ocean and South China Sea, moving through narrow choke points like the Malacca Straits between Indonesia and Malaysia, the Bab al Mandab Straits controlling the Red Sea, and the Straits of Hormuz into the Persian Gulf. All of those passages are controlled by the U.S. or countries like India and Indonesia with close ties to Washington.

 

In 2013, China claimed it had historic rights to the region and issued its now famous “nine-dash line” map that embraced the Paracels and Spratly island chains and 85 percent of the South China Sea. It was this nine-dash line that the Hague tribunal rejected, because it found no historical basis for China’s claim, and because there were overlapping assertions by Taiwan, Vietnam, Malaysia, Brunei, and the Philippines.

 

There are, of course, economic considerations. The region is rich in oil, gas and fish, but the primary concern for China is security. The Chinese have not interfered with commercial ship traffic, although they have applied on-again, off-again restrictions on fishing and energy explorations. China initially prevented Filipino fishermen from exploiting some reefs, and then allowed it. It has been more aggressive with Vietnam in the Paracels.

 

Rather than trying to assuage China’s paranoia, the U.S. made things worse by adopting a military strategy to checkmate “Area Denial.” Called “Air/Sea Battle” (renamed “Joint Concept for Access and Maneuver in the Global Commons”), Air/Sea Battle envisions attacking China’s navy, air force, radar facilities and command centers with air and naval power. Missiles would be used to take out targets deep into Chinese territory.

 

The recent seizure of a U.S. underwater drone off the Philippines is part of an on-going chess game in the region. The drone was almost certainly mapping sea floor bottoms and collecting data that would allow the U.S. to track Chinese submarines, including those armed with nuclear missiles. While the heist was a provocative thing to do—it was seized right under the nose of an unarmed U.S. Navy ship—it is a reflection of how nervous the Chinese are about their vulnerability to Air/Sea Battle.

 

China’s leaders “have good reason to worry about this emerging U.S. naval strategy [use of undersea drones] against China in East Asia,” Li Mingjiang, a China expert at S. Rajaratnam School of International Studies in Singapore, told the Financial Times. “If this strategy becomes reality, it could be quite detrimental to China’s national security.”

 

Washington charges that the Chinese are playing the bully with small countries like Vietnam and the Philippines, and there is some truth to that charge. China has been throwing its weight around with several nations in Southeast Asia. But it also true that the Chinese have a lot of evidence that the Americans are gunning for them.

 

The U.S. has some 400 military bases surrounding China and is deploying anti-ballistic missiles in South Korea and Japan, ostensibly to guard against North Korean nuclear weapons. But the interceptors could also down Chinese missiles, posing a threat to Beijing’s nuclear deterrence.

 

While Air/Sea Battle does not envision using nuclear weapons, it could still lead to a nuclear war. It would be very difficult to figure out whether missiles were targeting command centers or China’s nukes. Under the stricture “use them, or lose them” the Chinese might fear their missiles were endangered and launch them.

 

The last thing one wants to do with a nuclear-armed power is make it guess.

 

The Trump administration has opened a broad front on China, questioning the “one China” policy, accusing Beijing of being in cahoots with Islamic terrorists, and threatening a trade war. The first would upend more than 30 years of diplomacy, the second is bizarre—if anything, China is overly aggressive in suppressing terrorism in its western Xinjiang Province—and the third makes no sense.

 

China is the U.S.’s major trading partner and holds $1.24 trillion in U.S. Treasury Bonds. While Trump charges that the Chinese have hollowed out the American economy by undermining its industrial base with cheap labor and goods, China did not force Apple or General Motors to pull up stakes and decamp elsewhere. Capital goes where wages are low and unions are weak.

 

A trade war would hurt China, but it would also hurt the U.S. and the global economy as well.

 

When President Trump says he wants to make America great again, what he really means is that he wants to go back to that post-World War II period when the U.S. dominated much of the globe with a combination of economic strength and military power. But that era is gone, and dreams of a unipolar world run by Washington are a hallucination.

 

According to the CIA, “by 2030 Asia will have surpassed North America and Europe combined in terms of global power based on GDP, population size, military spending and technological investments.” By 2025, two-thirds of the world will live in Asia, 7 percent in Europe and 5 percent in the U.S. Those are the demographics of eclipse.

 

If Trump starts a trade war, he will find little support among America’s allies. China is the number one trading partner for Japan, Australia, South Korea, Vietnam and India, and the third largest for Indonesia and the Philippines. Over the past year, a number of countries like Thailand, Malaysia and the Philippines have also distanced themselves from Washington and moved closer to China. When President Obama tried to get U.S. allies not to sign on to China’s new Asian Infrastructure Investment Bank, they ignored him.

 

But the decline of U.S. influence has a dangerous side. Washington may not be able to dictate the world’s economy, but it has immense military power. Chinese military expert Yang Chengjun says “China does not stir up troubles, but we are not afraid of them when they come.” They should be. For all its modernization, China is no match for the U.S. However, defeating China is far beyond Washington’s capacity. The only wars the U.S. has “won” since 1945 are Grenada and Panama.

 

Nonetheless, such a clash would be catastrophic. It would torpedo global trade, inflict trillions of dollars damage on each side, and the odds are distressingly high that the war could go nuclear.

 

U.S. allies in the region should demand that the Trump administration back off any consideration of a blockade. Australia has already told Washington it will not take part in any such action. The U.S. should also do more than rename Air/Sea Battle, it should junk the entire strategy. The East and South China seas are not national security issues for the U.S., but they are for China.

 

And China should realize that, while it has the right to security, trotting out ancient dynastic maps to lay claim to vast areas bordering scores of countries does nothing but alienate its neighbors and give the U.S. an excuse to interfere in affairs thousands of miles from its own territory.

 

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The European Union and the Left

The EU & the Left

Dispatches From The edge

Jan. 10, 2017

 

When European Union President Jean-Claude Juncker addressed the European Parliament in Strasbourg this past September, he told them the organization was facing an “existential crisis” and “national governments so weakened by the forces of populism and paralyzed by the risk of defeat in the next election.”

 

Indeed it has been a bad year for the huge trading group:

• The “Breixit,” or the United Kingdom’s vote to withdraw.
• Rome’s referendum to amend the country’s constitution was trounced, and several Italian banks are in deep trouble.
• The austerity policies of the EU have kept most of its members’ economies either anemic or dead in the water. Even those showing growth, like Ireland and Spain, have yet to return to where they were before the 2008 economic melt down. Between 2007 and 2016, purchasing power fell 8 percent in Spain and 11 percent in Italy,

 

It is also true that number of national governments—in particular those in Germany and France—are looking nervously over their shoulders at parties to their right.

 

But the crisis of the EU does not spring from “populism,” a term that many times obscures more than it reveals, lumping together neo-fascist parties, like France’s National Front and Germany’s Alternative for Germany, with left parties, like Spain’s Podemos. Populism, as Juncker uses it, has a vaguely atavistic odor to it: ignorant peasants with torches and pitchforks storming the citadels of civilization.

 

But the barbarians at the EU’s gate did not just appear out of Europe’s dark forests like the Goths and Vandals of old. They were raised up by the profoundly flawed way that the Union was established in the first place, flaws that did not reveal themselves until an economic crisis took center stage.

 

That the crisis is existential, there is little doubt. In fact, the odds are pretty good that the EU will not be here in its current form a decade from now—and possibly considerably sooner. But Juncker’s solutions include a modest spending program aimed at business, closer military ties among the 28—soon to be 27—members of the organization, and the creation of a “European Solidarity Corps” of young volunteers to help out in cases of disasters, like earthquakes. But there was nothing to address the horrendous unemployment rate among young Europeans. In short, rearranging the Titanic’s deck chairs while the ice looms up to starboard.

 

But what is to be done is not obvious, nor is how one goes about reforming or dismantling an organization that currently produces a third of the world’s wealth. The complexity of the task has entangled Europe’s left in a sharp debate, the outcome of which will go a long way toward determining whether the EU—now a house divided between wealthy countries and debt-ridden ones—can survive.

 

It is not that the European left is strong, but it is the only player with a possible strategy to break the cycle of debt and low growth. The politics of racism, hatred of immigrants, and reactionary nationalism espoused by the National Front, the Alternative For Germany, Greece’s Golden Dawn, Denmark’s People’s Party, and Austria’s Freedom Party, will not generate economic growth, any more than Donald Trump will bring back jobs for U.S. steelworkers and coal miners and “make America great again.”

 

Indeed, if the anti-immigrant Alternative for Germany Party gets its way, that country will be in deep trouble. German deaths currently outnumber births by 200,000 a year, a figure that is accelerating. According to the Berlin Institute for Population and Development, to have a sufficient working-age population that can support a stable pension system, the country will require an influx of 500,000 immigrants a year for the next 35 years.

 

Many other European countries are in the same boat.

 

There are several currents among the European left, ranging from those who call for a full withdrawal, or “Lexit,” to reforms that would democratize the organization.

 

There is certainly a democracy deficit in the EU. The European Parliament has little power, with most key decisions made by the unelected “troika”—the International Monetary Fund (IMF), the European Central Bank, and the European Commission. The troika’s rigid debt policies mean members have lost the ability to manage their own economies or challenge the mantra that debt requires austerity, even though that formula has clearly been a failure.

 

As economists Markus Brunnermeier, Harold James, and Jean-Pierre Landau point out in their book “The Euro and the Battle of Ideas,” growth is impossible when consumers, corporations, and governments all stop spending. The only outcome for that formula is misery and more debt. Even the IMF has begun to question austerity.

 

But would a little more democracy really resolve this problem?

 

Nobel Laureate Joseph Stiglitz, a long-time critic of austerity, argues that while the EU does indeed need to be democratized, a major problem is the common currency. The euro is used by 19 of the EU’s 28 members that constitute the Eurozone.

 

Stiglitz argues that the Euro locked everyone into the German economic model of modest wages coupled with a high power export economy. But one size does not fit all, and when the economic crisis hit in 2008, that became painfully obvious. Those EU members that used a common currency were unable to devalue their currency—a standard economic strategy to deal with debt.

 

There is also no way to transfer wealth within the EU, unlike in the U.S. Powerful economies like California and New York have long paid the bills for states like Louisiana and Mississippi. As Stiglitz points out, “a lack of shared fiscal policy” in the EU made it “impossible to transfer wealth (via tax receipts) from richer states to poorer ones, ensuring growing inequality between the core and the periphery of Europe.”

 

Stiglitz proposes a series of reforms, including economic stimulus, creating a “flexible” euro, and removing the rigid requirement that no country can carry a deficit of more than 3 percent of GDP.

 

Former Greek Finance Minister Yanis Varoufakis, however, argues that the Union “is not suffering from a democratic deficit that can be fixed with a ‘little more democracy’ and a few reforms here and there.” The EU, he says, “was constructed intentionally as a democracy-free zone” to keep people out of decision-making process and to put business and finance in charge.

 

Is the machine so flawed that it ought to be dismantled? That is the opinion of British Pakistani writer and journalist Tariq Ali and King’s College Reader in politics, Stathis Kouvelakis, both whom supported the Brexit and are urging a campaign to hold similar referenda in other EU member countries.

 

But since that that position is already occupied by the xenophobic right, how does the left argue for Lexit without entangling itself with racist neo-Nazis? Varoufakis, a leading member of the left formation, DiEM25, asks whether “such a campaign is consistent with the Left’s fundamental principles” of internationalism?

 

He also argues that a Lexit would destroy the EU’s common environmental policy and the free movement of members, both of which find strong support among young people.

 

Is re-establishing borders and fences really what the left stands for, and wouldn’t re-nationalizing the fossil fuel industry simply turn environmental policies over to the multi-national energy giants? “Under the Lexit banner, in my estimation,” says Varoufakis, “the Left is heading for monumental defeats on both fronts.”

 

DiEM25 proposes a third way to challenge the disastrous policies of the EU, while avoiding a return to borders and “every country for itself” environmental policies. What is needed, according to Varoufakis, is “a pan-European movement of civil and governmental disobedience” to create a “democratic opposition to the way European elites do business at the local, national and EU levels.”

 

The idea is to avoid the kind of trap that Greece’s left party, Syriza, has found itself in: running against austerity only to find itself instituting the very policies it ran against.

 

What DiEM25 is proposing is simply to refuse to institute EU austerity rules, a strategy that will only work if the resistance is EU-wide. When Greece tried to resist the troika, the European Central Bank threatened to destroy the country’s economy, and Syriza folded. But if resistance is widespread enough, that will not be so easy to do. In any case, he says, “the debt-deflationary spiral that drives masses of Europeans into hopelessness and places them under the spell of bigotry” is not acceptable.

 

DiEM25 also calls for a universal basic income, a proposal that is supported by 64 percent of the EU’s members.

 

Portugal’s left has had the most success with trying to roll back the austerity measures that caused widespread misery throughout the country. The center-left Socialist Party formed a coalition with the Left Bloc, and the Communist/Green Alliance put aside their differences, and restored public sector wages and state pensions to pre-crisis levels. The economy only grew 1.2 percent in 2016 (slightly less than the EU as a whole), but it was enough to drop unemployment from 12.6 percent to 10 percent. The deficit has also declined.

 

Spain’s Podemos and Jeremy Corbyn of the British Labour Party have hailed the Portuguese left coalition as a model for an anti-austerity alliance across the continent.

 

Debt is the 800-pound gorilla in the living room. Most of the debt for countries like Spain, Portugal and Ireland was not the result of spendthrift ways. All three countries had positive balances until the real estate bubble pumped up by private speculators and banks burst in 2008, and taxpayers picked up the pieces. The “bailouts” from the troika came with onerous austerity measures attached, and most of the money went straight to the banks that had set off the crisis in the first place.

 

For small or underdeveloped countries, it will be impossible to pay off those debts. When Germany found itself in a similar position after World War II, other countries agreed to cut its debt in half, lower interest rates and spread out payments. The 1952 London Debt Conference led to an industrial boom that turned Germany into the biggest economy in Europe. There is no little irony in the fact that the current Berlin government is insisting on applying economic policies to debt-ridden countries that would have strangled that German post-war recovery had they not been modified.

 

It is possible that the EU cannot be reformed, but it seems early in the process to conclude that. In any case, DiEM25’s proposal to practice union-wide civil disobedience has not really been tried, and it certainly has potential as an organizing tool. It is already being implemented in several “rebel” cities like Barcelona, Naples, Berlin, Bristol, Krakow, Warsaw and Porto, where local mayors and city councils are digging in their heels and fighting back.

 

For that to be successful throughout the EU, however, the left will have to sideline some of the disputes that divide it and reach out to new constituencies. If it does not, the right has a dangerous narrative waiting in the wings.

 

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