“China Threat” Quiz (More detail)

(More detailed version)
Jeffrey Rudolph (September 2014; last update November 2016)

In terms of both economic and military power, the United States and China are the two most important countries in the world. While they are deeply connected, primarily by trade and investment, they also compete for power and influence. However, their mutually enriching interconnectedness, coupled with the lethality of modern weaponry, suggests that their rivalry will primarily focus on building coalitions of support.

Nevertheless, world stability requires that the US, the established power, and China, the emerging power, effectively work out their differences over issues such as navigation rights in the seas surrounding China and the political status of Taiwan. Perhaps the greatest danger to peace is that China may overestimate its power—thus leading to hubris and aggression—or that the US may overestimate the threat China poses—thus leading to unnecessary fear and confrontation.

The main purpose of the following Quiz is to examine China’s evolution into an important economic and military power, and to assess the extent of its threat to the US.


1. How many military bases does China have on foreign soil?

-“China is a rising power, but the government does not seem to be interested in building an empire. Unlike the United States, which has hundreds of military bases throughout the globe, China [did not have an agreement for one until 2015]. The Chinese government seems to be very focused on economic growth…” http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/china-as-the-worlds-largest-economy-what-does-it-mean

-In 2015, China “signed a 10-year deal with the African nation Djibouti to build [its first] military base [on foreign soil]…Djibouti is a small country in East Africa, across from Yemen and on the Gulf of Aden, with a population of just under 830,000.…Djibouti also hosts about 4,000 US military service members at Camp Lemonnier, which…is a Navy-led establishment that supports and prepares ships, aircraft and other deployments for ‘regional and combatant command requirements.’…The new Chinese base would be a logistics hub…It would also allow China to improve its ability to gather intelligence in the region and beyond…”

   “China is Africa’s largest bilateral trading partner, with trade volume double that of US-Africa trade in 2013. In 2000, bilateral trade between Africa and China was around $10 billion; by 2014 it had exploded to more than $200 billion. China has tapped into Africa’s vast mineral and oil resources while simultaneously shipping Chinese-made goods to Africa.” http://www.ibtimes.com/china-open-first-military-base-africa-signs-deal-djibouti-us-general-says-2197965  (24 Nov. 2015)

-In 2010, the US had military personnel in over 140 countries and over 660 overseas bases. As at June 2014, “US military forces are in action or based in Afghanistan, Pakistan, Djibouti, the Philippines, Yemen, Somalia, Uganda, Central African Republic, Colombia, Kenya, Europe, South Korea, Japan – in fact, around the globe.” http://www.politifact.com/truth-o-meter/statements/2011/sep/14/ron-paul/ron-paul-says-us-has-military-personnel-130-nation/ http://www.informationclearinghouse.info/article38732.htm

-“Despite the impressive progress in its military modernization in recent years, it should be remembered that China’s global military footprint actually remains very limited.…Other than cyber warfare, its space program, and intercontinental ballistic missiles, it has no global power-projection capabilities. To be certain, these are not insignificant capabilities, but China’s air and ground forces cannot operate away from China’s immediate periphery, and the naval forces have very limited deployment capacity beyond China’s ‘near seas’.” (David Shambaugh, China Goes Global: The Partial Power, Oxford University Press, New York: 2013, 270. Hereinafter referred to as, “Shambaugh 2013.”)

-While “China has been steadily improving and expanding its military capabilities over the past two decades and, by some measures, can be considered to possess the No. 2 military in the world [it] has thus far limited its military deployments to China’s own sovereign territory, its Asian maritime littoral, or under international peacekeeping missions in other regions. In other words, the Chinese military has not yet gone global. To be sure, it remains an Asian regional military power and strategic actor to be reckoned with…” (Shambaugh 2013, 269)

-“When China had to evacuate 35,000 civilians from Libya in 2011, it had to rely completely on leased ships, ferries, and civilian aircraft from neighboring countries – as it did not have the air or naval capacity to deploy that far and did not possess military base arrangements in the Mediterranean region.” (Shambaugh 2013, 270)

-“In some cases, notably with Sri Lanka and Pakistan, contractors have been involved in the construction of port facilities that have raised suspicions that Beijing is intending to develop distant naval bases. Without exception, though, the speculation rests on thin ground….Indeed, the Financial Times reported in 2011 that Pakistan had requested that China build a naval base at Gwadar, and China did not accept the offer….A 2012 RAND report prepared for the U.S. Air Force noted that the various ports under development by China ‘are not military bases.’ Instead, it argued, ‘they could serve as supply depots for China’s naval forces, enabling it to conduct operations further from its shores.” (Elizabeth C. Economy and Michael Levi, By All Means Necessary: How China’s Resource Quest Is Changing The World, Oxford University Press, New York: 2014, 175. Hereinafter referred to as, “Levi 2014.”)

-“Foreign bases are not just an exercise in logistics; they are sovereign territory within another nation. A base is the bridgehead to a very different relationship, the sort of defense alliance whereby the bigger nation offers to provide security in return for access and support. In other words, China would need formal allies. But the question every government would ask Beijing is, whom are we defending ourselves from? If China moves down this path, it could start a process of dividing the region between countries that rely on the U.S. for their security, and those that lean toward China. Asian governments would increasingly find themselves asked to take sides, the outcome they fear the most.” (Geoff Dyer, The Contest Of The Century: The New Era of Competition With China—And How America Can Win, Alfred A. Knopf, New York: 2014, 64-5. Hereinafter referred to as, “Dyer 2014.”)

-“If China really aspires to a stealth ‘String of Pearls [Bases]’ strategy, it will be very difficult to turn this into reality, because few countries will want to be seen taking sides. Every government in the region knows that, even with the huge investments China is making in its navy, the U.S. will have a superior fighting ability in the Indian Ocean for several decades to come. This means that a Chinese base on their territory would turn them into a highly vulnerable target in the first days of a conflict.” Burma and Sri Lanka have indicated that it is unlikely they would accept Chinese bases. (Dyer 2014, 63-4)

-“Once a larger military/security footprint is married to an already expansive economic-energy footprint, the anti-China angst [particularly in the US and Asia] will only intensify.” To reduce such angst, China will need to coordinate its growing power projection “with Western nations or…the United Nations or other recognized regional organizations…” (Shambaugh 2013, 272)

-For a less detailed version of this quiz, and for other quizzes, go to: https://detailedpoliticalquizzes.wordpress.com/

2. Which countries may be considered China’s allies?

-Hindering China’s rise to being a global power is the fact it possesses no real allies. “Even in China’s closest relationships – with Russia, Pakistan, and North Korea – strong elements of distrust percolate beneath the surface of seemingly harmonious state-to-state relations.” (Shambaugh 2013, 7)

-“When you start looking at the world through Chinese eyes, it is striking how deeply entrenched American influence begins to appear, and how difficult it will be for China to overturn it. America’s alliances are solid and its core political values still widely shared….The harder China pushes [its military and diplomatic power], the more likely it is that a coalition of neighbors will emerge, with the U.S. at the helm, to restrain its ambitions.” (Dyer 2014, 14-15)

-“The rise of China and the other new powers means a return to a world where a balance of power is the natural state of affairs, with the U.S. still the most important nation but unable to dictate terms. Instead of rigid alliances, there will be fluid coalitions that shift depending on the issue. On occasion, China and the U.S. will be on the same side, but more often than not they will be opposed …” (Dyer 2014, 15)

-“If China becomes an economic powerhouse it will almost certainly translate its economic might into military might and make a run at dominating Northeast Asia. Whether China is democratic and deeply enmeshed in the global economy or autocratic and autarkic will have little effect on its behavior, because democracies care about security as much as non-democracies do, and hegemony is the best way for any state to guarantee its own survival. Of course, neither its neighbors nor the United States would stand idly by while China gained increasing increments of power. Instead they would seek to contain China, probably by trying to form a balancing coalition. The result would be an intense security competition between China and its rivals, with the ever-present danger of great-power war hanging over them. In short, China and the United States are destined to be adversaries as China’s power grows.” (John J. Mearsheimer, The Tragedy of Great Power Politics, W. W. Norton & Company: 2001, 4.)

3. What was the US’s defense spending in 2011? China’s?

-US: $700 billion; China: $91 billion http://www.globalissues.org/article/75/world-military-spending#USMilitarySpending (Shambaugh 2013, 274)

-On average, China’s defense spending has been 1.4 percent of its GDP. The US “spends nearly 5 percent of its GDP on defense…” (Shambaugh 2013, 274)

-“By 2020 it is quite conceivable that China will advance to possess the second most comprehensively capable military in the world after the United States. [However,] it will [still] remain far behind the capabilities of the United States…” (Shambaugh 2013, 306)

-Chinese military spending was spurred by the first Gulf War in 1990-91. When the Chinese witnessed the “awesome display of firepower, long-range air strikes, stealth, precision-guided munitions, electronics, computers, satellites…, the PLA realized…just how far behind their military had fallen.” (Shambaugh 2013, 276)

-After considering China’s military power “the picture that emerges is not ominous.  China is an emerging regional power that is unlikely to ever match America in the main measures of military power unless dysfunctional political processes in Washington impair [its] economy and defenses.” http://www.forbes.com/sites/lorenthompson/2014/06/06/five-reasons-china-wont-be-a-big-threat-to-americas-global-power/

4. How many aircraft carriers does China have? The US?

-China: 1; US: 11

-“Having already launched one aircraft carrier in 2012 [which was bought from the Ukraine in 1998 and retrofitted in China], in April 2013 China announced its intention to develop a second, more powerful carrier. Yet the U.S. Department of Defense still foresees a far weaker capacity to project power well away from China than the United States and others enjoy. Indeed, there remains significant debate within China over how much to invest in the ability to undertake naval operations in distant waters…” (Levi 2014, 171)

-“The U.S. has not lost an aircraft carrier since the Japanese sank the Hornet in 1942. In both practical and symbolic ways, the aircraft carrier has been the symbol of American power projection over the six decades during which it has dominated the Pacific. The credibility of U.S. defense guarantees for the region has been carried on the backs of America’s eleven carriers, with their decks each the size of three football fields filled with dozens of fighter aircraft. But it is those same vessels that are now potentially under threat by China’s vast new array of missiles.” (Dyer 2014, 114-5)

-“China appears to have accepted a world where the United States patrols the seas; if that eventually changes, perhaps the two countries will cooperatively share the burden of sea-lane security, rather than fight over control.” (Levi 2014, 7)

-“If China wants to have the ability to contest the seas well beyond its periphery, and to project power in the Indian Ocean, it needs to invest in two areas. It will need to have bases in and agreements with friendly countries that will allow it to use their ports and airfields to support its forces. And it will need the sorts of warships that can provide some form of air cover across wide expanses of ocean. In other words, it will need aircraft carriers.” However, “developing its own jets for use on carriers – and training a team of pilots to use them – [will require] decades…” (Dyer 2014, 53-4, 57)

-“China’s economy relies on the continued safety of seaborne trade – something which has been guaranteed since the end of the Second World War by the navy of the United States, the country which the Chinese elite mistrusts the most (with the possible exception of Japan). Like other great powers before it, China is building a navy to take to the high seas because it does not want to outsource the security of its economic lifelines to someone else.” History demonstrates that during wartime blocking access to trade is a tool used by states to achieve victory. (Dyer 2014, 10)

-“Chinese strategists believe that the United States and its allies would deny supplies of oil and metal ores to China during a military or economic crisis and that the U.S. Navy could block China’s access to strategically crucial sea-lanes.” http://www.foreignaffairs.com/articles/138009/andrew-j-nathan-and-andrew-scobell/how-china-sees-america (September/October 2012)

-“After World War II, the United States extended its influence over distant resource-producing lands and spent large sums to protect seaborne commerce, in part to assure itself of reliable access to the resources lacking at home.” (Levi 2014, 2)

5. Which element of China’s military is considered its most successful?

-“China’s missile forces…have been the shining success story in the Chinese military….For six decades, beginning in the late 1950s, China’s military-industrial complex has been producing a range of ballistic missiles, as well as the conventional and nuclear warheads deployed on them. Today China possesses a full range of short-range (SRBM), intermediate-range (IRBM), intercontinental-range (ICBM), and submarine-launched ballistic missiles (SLBM). China now has a large and diversified inventory of deployed ballistic missiles, totaling approximately 1,370…The rail and road mobility of all these missiles makes it very difficult to monitor their locations….It is important to note that only the SLBMs and ICBMs carry nuclear warheads…” (Shambaugh 2013, 294-5)

-China’s “military buildup is designed to gradually change the calculations of American commanders, to dissuade them from considering military operations anywhere near China’s coast, and to push them slowly farther out into the Pacific.” For example, “China has invested heavily in a new generation of so-called carrier-killer missiles [which fly at a speed of 3800 mph, have a range of 930 miles, and are armed with maneuverable warheads], designed to destroy aircraft carriers at sea….The strategy [is] good economics. Each of its carrier-killer missiles cost around $11 million; a new aircraft carrier now costs $13.5 billion.” (Dyer 2014, 45, 47)

-To a Chinese observer, U.S. power is daunting. “U.S. military forces…[are] all around the Chinese rim….PACOM’s [U.S. Pacific Command’s] assets include about 325,000 military and civilian personnel, along with some 180 ships and 1,900 aircraft. To the west, PACOM gives way to the U.S. Central Command (CENTCOM), which is responsible for an area stretching from Central Asia to Egypt….[W]ith the beginning of the ‘war on terror,’ CENTCOM placed tens of thousands of troops in Afghanistan and gained extended access to an air base in Kyrgyzstan. The operational capabilities of U.S. forces in the Asia-Pacific are magnified by bilateral defense treaties with Australia, Japan, New Zealand, the Philippines, and South Korea and cooperative arrangements with other partners. And to top it off, the United States possesses some 5,200 nuclear warheads deployed in an invulnerable sea, land, and air triad. Taken together, this U.S. defense posture creates…a ‘strategic ring of encirclement.’” http://www.foreignaffairs.com/articles/138009/andrew-j-nathan-and-andrew-scobell/how-china-sees-america (September/October 2012)

6. True or False: The US has a policy of no-first-use of nuclear weapons.

-False. However, China has used “its participation in the…[Non-Proliferation Treaty] Review Conferences to lobby against states whose nuclear doctrines permit the first use of nuclear weapons (e.g., the United States)…” (Shambaugh 2013, 143)

-“[T]he best public information available suggests that China has about 250 [nuclear] warheads in its strategic arsenal, most of which can’t reach America; the U.S. has 4,600 nuclear warheads available for delivery by missile or plane, and an additional 2,700 in storage. Beijing’s decision to sustain only a modest…nuclear deterrent seems incompatible with the notion that it seeks to rival U.S. power.” http://www.forbes.com/sites/lorenthompson/2014/06/06/five-reasons-china-wont-be-a-big-threat-to-americas-global-power/

7. What issues does China treat as core national interests?

-China treats the following as core interests: Taiwan, Tibet, Xinjiang, human rights, and its maritime territorial claims. While on other issues Chinese diplomacy “usually adopt[s] the safest and least controversial position,” on the named five core interests China is “hypervigilant and diplomatically active.” (Shambaugh 2013, 9, 46)

-“Over time, the number of core interests explicitly claimed by China has expanded. Originally, during the early 2000s, officials used the term to refer to Taiwan, when the territory’s people appeared to be moving toward de jure independence. By 2006, it evolved to incorporate Tibet and Xinjiang, two regions in China with sizable and restive minority populations. In 2010, Dai [Bingguo, a State Councilor] reportedly told U.S. Secretary of State Hillary Clinton that the South China Sea was one of China’s core interests. And in 2013, a spokesperson for the Ministry of Foreign Affairs claimed that the Diaoyu/Senkaku Islands in the East China Sea were a core interest…” (Levi 2014, 145)

-The Chinese Communist Party (CCP) “came to power by staking its legitimacy on overturning the old order in which Western imperialists and Japanese ‘devils’ plundered, killed, exploited, humiliated, and carved up the Chinese nation. This period is described in Chinese Communist lore as the ‘century of shame and humiliation’ [1840s to 1949]. The CCP anchored its legitimacy on restoring the nation’s territorial integrity and sovereignty, and its (inter)national dignity.” (Shambaugh 2013, 56)

-“[F]rom 1996 until…approximately 2008…there was a singular primary driver for Chinese military modernization: Taiwan (and, by extension, the United States). [T]he 1995-96 Taiwan Strait crises [when China ineffectively tried to affect the outcome of Taiwan’s first presidential election and intimidate Taiwan’s independence movement] taught the PLA that it possessed a largely single-dimensional strike capacity: ballistic missiles.” However, China’s “military capabilities now far outstrip Taiwan’s.” (Shambaugh 2013, 279, 280)

-“China was one of the most prominent victims of nineteenth-century gunboat diplomacy, when Britain, France, and other colonial powers used their naval supremacy to exercise control over Shanghai and a dozen other ports around the country. The Opium Wars [during the 1800s] were principally a naval exercise…[China’s current] instinct to control the surrounding seas is partly rooted in the widespread desire never to leave China so vulnerable again.” China “witnesses on a daily basis that the American navy is superior, and operating only a few miles from many of China’s major cities. ‘For [Chinese], this is a major humiliation that they experience every single day…That is the reason the navy wants to do something to challenge the U.S.’” (Dyer 2014, 25, 26)

-Nevertheless, China’s foreign policy has been pragmatic. For example, since 2009, it has been cooperating in “international anti-piracy operations” that often include “the U.S. Seventh fleet based in Bahrain” taking the lead. (Dyer 2014, 67)

8. What are China’s interests in the South China Sea?

-“To understand what is happening in the South and East China Seas, it is essential to disentangle the multiple motives drawing China and its neighbors to focus on the area: beyond natural resources [particularly oil and gas], sea lane security, national defense, and basic nationalism all drive Chinese actions.” The oil and gas is particularly attractive to China as it would “not require transport through the Straits of Hormuz or Malacca to reach Chinese consumers…” (Levi 2014, 139-40)

-In the South China Sea “a series of islets, reefs, and rocks are disputed by a number of countries, including Vietnam, the Philippines, and China….[C]hina’s now famous ‘nine-dash-line’ map…assumes ownership of 80 to 90 percent of the South China Sea.” (Dyer 2014, 30)

-“China has said it will not accept a [July 2016] ruling against it in a key international legal case over strategic reefs and atolls that Beijing claims would give it control over disputed waters of the South China Sea. The judgment by an international tribunal in The Hague came down overwhelmingly in favour of claims by the Philippines and is likely to increase global diplomatic pressure on Beijing to scale back military expansion in the area. By depriving certain outcrops of territorial-generating status, the ruling from the permanent court of arbitration effectively punches holes in China’s all encompassing ‘nine-dash’ line that stretches deep into the South China Sea.” The ruling “declared large areas of the sea to be neutral international waters or the exclusive economic zones of other countries.”

   “The tribunal concluded that there was no legal basis for China to claim historic rights to resources within the sea areas falling within the ‘nine-dash line’. None of the fiercely disputed Spratly Islands, the UN body found, were ‘capable of generating extended maritime zones…[; and] having found that none of the features claimed by China was capable of generating an exclusive economic zone, the tribunal found that it could — without delimiting a boundary — declare that certain sea areas are within the exclusive economic zone of the Philippines, because those areas are not overlapped by any possible entitlement of China.”

   “The tribunal found that China had violated the Philippines’ sovereign rights in its exclusive economic zone by interfering with Philippine fishing and petroleum exploration, constructing artificial islands and failing to prevent Chinese fishermen from fishing in the zone.”

   Chinese president, Xi Jinping, “insisted China was still ‘committed to resolving disputes’ with its neighbours.” “China has previously stated that it ‘will neither accept nor participate in the arbitration unilaterally initiated by the Philippines’. The tribunal ruled, however, that China’s refusal to participate did not deprive the court of jurisdiction.” https://www.theguardian.com/world/2016/jul/12/philippines-wins-south-china-sea-case-against-china

-“For the U.S., China’s claims set off alarm bells about the long-term threat to the U.S. maritime order. But for the Asian claimants, the dispute also brings together oil, fish, and potent nationalism. For what might appear a few insignificant specks of land, the economic stakes over the disputed South China Sea islands are enormous [as significant oil reserves exist and the sea is rich in fish]….China is the biggest consumer (and exporter) of seafood in the world, and seafood provides half of the protein intake in the average Vietnamese diet.” (Dyer 2014, 90)

   “No nation is as dependent for its life on the East and South China Seas as the PRC. (Vietnam is nearly as so, but its territorial waters allow a pathway to the south.) For the PRC, these waters are roughly the equivalent of the Atlantic, Pacific, and Gulf of Mexico combined for the United States. That’s the crux of its sensitivity about routine military activity in these waters (amplified by the US defense establishment’s enthusiastic musing about options to blockade China.” (Carl Conetta, Facebook post, 4 March 2016)

-“China’s approach to the South China Sea has been one of the clearest examples of how competing interests [within China] are helping to drive parts of [its] foreign policy – the fracturing in power that the Chinese establishment has witnessed….Some of that pressure has come from local governments [which want to] launch high-end tourism on the islands…The big oil companies…have also lobbied hard for the government to push its claims in the region more aggressively.” (Dyer 2014, 92-3)

-The US Pivot to Asia is threatening to China. In reality, China is “surrounded and contained. Take a look at the conflicts between the US and China now. The conflicts are mostly over the seas near the China coast. The US wants to have free rights to send military vessels into those waters and China wants to control those waters. So that’s a confrontation. There’s no confrontation over the Caribbean or over the waters near California. That would be inconceivable. That tells you about the balance of power.” http://chomsky.info/interviews/20140319.htm

-“The South China Sea has already seen conflict over the various rocks and land features; indeed it was more intense in the 1980s and 1990s, when China clashed with both Vietnam and the Philippines. The first confrontation resulted in approximately eighty Vietnamese deaths…” (Levi 2014, 144)

-“Five times – in 1970, 1971, 1978, 1980, and 1999 – Philippine armed forces took actions that have placed nine islands claimed by China under foreign occupation. Since occupying the islands, the Philippines has proceeded to build military installations and station some 1000 men on them. Beyond occupying the islands, Manila has for years taken actions highly provocative to China, including arresting and expelling Chinese fisherman fishing in the disputed area….In July 2011 a delegation of Philippine legislators landed on a Chinese-claimed island, declaring Philippine ‘sovereignty.’ Against this background, what [Americans] should find remarkable is… Beijing’s restraint.” http://www.forbes.com/sites/stephenharner/2014/06/22/the-nytimes-china-threat-myth-the-pivot-to-asia-and-obamas-foreign-policy-legacy/

-“On the recent altercation with Vietnam over Chinese drilling operations, on May 15 [2014], three days after Secretary of State John Kerry called the operations…an ‘aggressive act,’ People’s Liberation Army Chief of the General Staff General Fang Fenghui…said the following. ‘China is conducting the exploitation activity within 12 nautical miles of the Zhongjian Islands which is a part of the Paracel Islands. And this is an activity conducted within our territorial water. And secondly, the related countries in the…South China Sea have drilled actually many oil wells in the South China Sea, but China has never drilled even one. From this single fact, we can see how much restraint China has exercised. And the purpose of this restraint is to…maintain the stability of the South China Sea region.’” http://www.forbes.com/sites/stephenharner/2014/06/22/the-nytimes-china-threat-myth-the-pivot-to-asia-and-obamas-foreign-policy-legacy/

-China is “adamant that Washington’s attempt to involve itself in the dispute has emboldened Vietnam and the Philippines to take a more confrontational stance toward China….The other claimants…describe a gradual but decisive increase in China’s naval presence in the region over the last decade, as well as a deliberate buildup of military installations on some of the islands that it controls…” (Dyer 2014, 90-1)

9. What 2010 event was a key turning point that raised alarm among China’s neighbors?

-At the 2010 Asia-Pacific Summit, China’s representative, Yang Jiechi, “launched into a twenty-five minute diatribe” that included stating, “China is a big country…And you are all small countries. And that is a fact.” What led to Yang’s diatribe was that “U.S. Secretary of State Hillary Clinton had declared that the U.S. viewed the stability of the South China Sea as a fundamental U.S. interest – a pointed rebuke to China, which argues that the disputes in the area have nothing to do with Washington. After she sat down, representatives of [other Asian] nations, including the host, Vietnam, stood to issue similar statements, some of them with even more direct criticisms of China.” (Dyer 2014, 69)

-“The summit lifted the lid on the profound anxieties that China’s rise has started to prompt across Asia. From Vietnam to Mongolia, from Japan to Australia, China’s expanding military might and political confidence are now producing an existential crisis, the perennial angst of ‘small countries’ living alongside a ‘big country’ they do not quite trust.” (Dyer 2014, 70)

-“The harder [China] pushes back against the U.S. and in favor of its territorial claims, the more it rallies the region to embrace Washington.” For example, “In the Philippines…there had been popular rejoicing when the U.S. Navy was forced out of its base in Subic Bay in 1992, and leaders like Gloria Arroyo welcomed China as a ‘big brother.’ But U.S. warships are now returning with ever-greater frequency, and the country’s new president, Benito Aquino, declared in 2012: ‘We need to take a united stand against the recent aggressive actions from China.’” (Dyer 2014, 96, 95)

-“China is not rising in isolation, but into a region of proud nation-states that want to stake their own claims in the modern world. As a result, there is an iron rule to the new era of geopolitical competition in Asia, which Washington and Beijing ignore at their peril: do not ask the other Asians to choose sides….Asians believe they can trade with China and at the same time encourage an active U.S. presence…” “Asians want the support of the American military so they can feel comfortable engaging with China, not so they can isolate it.” (Dyer 2014, 111, 112)

10. Which country fought the most border wars from 1949 to 1979?

-“Given China’s geographic location – it shares land borders with fourteen nations and (disputed) maritime boundaries with six others – and history of encroachment from the northern steppes and along the eastern maritime seaboard, external security has…long been a concern.” In addition, “the People’s Republic of China (PRC) was subject to geostrategic encirclement during the Cold War by both the United States and the Soviet Union. During the first three decades of the PRC [People’s Republic of China], China fought more border wars and skirmishes than any country on earth. Although the past three decades have been more peaceful, and all but one land border (that with India) have been mutually demarcated, volatile maritime disputes still exist in the East China Sea and South China Sea.” (Shambaugh 2013, 60)

-“No other country except Russia has as many contiguous neighbors. They include five countries with which China has fought wars in the past 70 years (India, Japan, Russia, South Korea, and Vietnam) and a number of states ruled by unstable regimes. None of China’s neighbors perceives its core national interests as congruent with Beijing’s.” http://www.foreignaffairs.com/articles/138009/andrew-j-nathan-and-andrew-scobell/how-china-sees-america (September/October 2012)

-Several factors explain why the possibility of China engaging in “war is in fact lower than realists might argue. [General] economic and trade inter-dependency prevents wars from erupting [for] a simple rational reason: the cost of war is higher than ever in history due to the web of relations that exists in the contemporary world among states, and powers in particular. China’s energy dependency, as well as economic growth dependency will play an important role in any decision on starting or entering into a military conflict. Moreover, all the steps the Chinese government has undertaken in its external relations are not extreme in comparison to what any other power does when pursuing its interests. As every power, China tends to intervene in its closest environment in order to strengthen and stabilize its security.” http://cenaa.org/analysis/the-china-threat-theory-revisited-chinese-changing-society-and-future-development/

11. Based on a purchasing power parity basis, which country has the largest economy in the world?

-The World Bank ranks China as having the world’s largest gross domestic product. (Therefore, the US is no longer the world’s biggest producer of wealth as it had been since it overtook Britain in 1876.) http://data.worldbank.org/data-catalog/GDP-PPP-based-table

-By 2013, China had a GDP per capita (purchasing power parity basis) of $8,500. The US’s equivalent was $49,000. http://www.indexmundi.com/g/r.aspx?c=ch&v=67 (Evan Osnos, Age Of Ambition: Chasing Fortune, Truth, and Faith in the New China, Farrar, Straus and Giroux, New York: 2014, 367. Hereinafter referred to as, “Osnos 2014.”)

-“Lifting more than 200 million people out of absolute poverty over the past quarter century” has been a major accomplishment. China’s own goal is to become a “medium-level developed country by the mid-twenty-first century…” (Shambaugh 2013, 39, 132)

-In 2011 China had “four of the world’s top ten banks in terms of capitalization…[It] Possessed the largest foreign exchange reserves ($3.2 trillion)”. (Shambaugh 2013, 157)

-One critical lesson the Chinese leadership learned from the collapse of communism in Eastern Europe and Russia in the early 1990s “was the importance of economic growth. [In fact,] After three years of stagnation following the June 4, 1989 [Tiananmen military crackdown], elder leader Deng Xiaoping reignited economic reforms with his famous ‘Southern Sojourn’ of 1992. Thereafter, to this day, China’s economy has been on a tear.” (Shambaugh 2013, 51)

-“At 1.3 billion, China has the largest population of any country.  However, that population is aging rapidly due to the one-child policy imposed in 1979. The current fertility rate of 1.6 children per woman is well below the level of 2.1 required to maintain a stable population over the long run…The vast pool of cheap labor that fueled China’s economic miracle has already begun disappearing, driving up wages and leading some labor-intensive industries to move out. In the years ahead, a growing population of old people will undermine efforts to stimulate internal demand while creating pressure for increased social-welfare spending.” http://www.forbes.com/sites/lorenthompson/2014/06/06/five-reasons-china-wont-be-a-big-threat-to-americas-global-power/

-“The environment has long taken a back seat to rapid economic development…As a result, China endures some of the world’s worst air pollution, water pollution and scarcity, and land degradation.” (Levi 2014, 80)

-“The rewards created by China’s rise have been wildly inconsistent but fundamentally profound: it is one of the broadest gains in human well-being in the modern age. In 1978, the average Chinese income was $200… By almost every measure, the Chinese people have achieved longer, healthier, more educated lives.” However, “The difference in life expectancy and income between China’s wealthiest cities and its poorest provinces is the difference between New York and Ghana.” “An independent calculation put [China’s Gini coefficient] at 0.61, higher than the level in Zimbabwe.” However, Chinese “cared most of all about the gap in opportunity” — due to obstacles such as corruption, the need for connections, and weak courts — that has led to “a strikingly low level of intergenerational mobility.” Frustration is reflected in “the number of strikes, riots, and other ‘mass incidents’ [which] had doubled in five years to 180,000 [in 2010]…” Essentially, “the first generation of assembly-line workers had been grateful just to be off the farm, but this generation compared themselves to wealthier peers [and felt disappointed].” (Osnos 2014, 4, 6, 268-9, 271-2)

12. Why was the 2008 financial crisis particularly important for conservative Chinese elites?

-For many Chinese, particularly conservative elites, there is “a strong sense of triumphalism…in the wake of the 2008-2010 global financial crisis. They feel the Chinese development model of mixed state capitalism and socialism has been vindicated, while the Western laissez-faire system has been vanquished.” (Shambaugh 2013, 33)

-“The China model of economic management had its finest moment in November 2008. Lehman Brothers had collapsed two months earlier, sending the Western economic world into the sort of panic not seen since the 1930s. Over the next few weeks, the brutal consequences for China started to mount. In southern and eastern China, the areas where most of the export factories are concentrated, tens of thousands of migrant workers [saw their jobs disappear] almost overnight. Seeing a potential threat to its legitimacy, the Chinese party-state snapped into action. In November, Beijing announced a massive economic stimulus plan with a headline figure of $536 billion…[P]lanning officials surveyed [local government] plans for construction and infrastructure, giving a quick yes or no. The state-owned banks then provided the initial financing, and work began as quickly as possible….China was [primarily] able to respond so quickly to the crisis because of the control the state has over the big four banks, which are responsible for between a third and a half of new credit in the country.” (Dyer 2014, 244-5)

-The Chinese government “acted responsibly and in a stabilizing way [during the 2008 crisis] by not devaluing its currency and by offering aid packages and low-interest loans to several Southeast Asian states. These actions not only were appreciated in the region but also stood in stark contrast to the dictatorial posture taken by the International Monetary Fund and international creditors in response to the crisis….The success of its actions boosted the confidence of China’s leaders in their role as regional actors.” (Shambaugh 2013, 96)

-“[T]he financial crisis ended the shadow boxing in Beijing and unleashed powerful demands within parts of the elite to begin taking on the U.S. [However, this does not imply a coming armed conflict.] There are no Chinese plans for the sort of territorial expansion that scarred Europe in the late nineteenth century…Instead, Beijing [hopes] to gradually undermin[e] the foundations of American [military, political and economic] power…Chinese leaders understand the limitations that globalization places on them, and the benefits that thirty years of trading with the U.S. have brought, but they are also far more skeptical and resentful about American influence than most in Washington realize.” (Dyer 2014, 12)

13. Which country is the world’s largest exporter of manufactured goods?

-China. As a consequence, “it has displaced the U.S. as the largest trading partner of a host of countries” that include Japan, South Africa and Brazil. However, “At least half of China’s exports of consumer products are manufactured by foreign-owned companies in China.” (Dyer 2014, 252, 273)

-While China “is a trading superpower…its exports are still dominated by generally low-end consumer products [such as footwear, televisions and textiles]….It has few leading multinational corporations and poor brand presence in international markets.” “Despite years of efforts…China has fallen short of its decade-long goal to build the world’s leading semiconductor industry, as it still imports the vast majority of microchips for the products it assembles. Experts estimate that China’s best chip factories remain two to three generations behind world leaders such as Intel.” (Shambaugh 2013, 157, 161)

-Many countries have benefited trading with China. For example, “Brazil’s improved economic performance over the last decade, including the China-style growth rate of 7.5 percent in 2010, was partly the result of demand from China for its natural resources, from iron ore and copper to beef and soybeans.” (Dyer 2014, 256)

-“With more than $300 billion in two-way trade, China is Japan’s largest trading partner while Japan is China’s third-largest partner. China is the number two destination for Japanese FDI ($7.3 billion in 2010).” (Shambaugh 2013, 102)

14. In 2013, what percentage of foreign-exchange trades was in US dollars? What percentage was in Chinese yuan?

-“[T]he Bank for International Settlements (BIS) reported…that the [US] dollar’s share in the world’s foreign-exchange trades [was] 87%…[The Chinese] yuan…account[ed] for only 2.2%…” http://www.theguardian.com/business/economics-blog/2013/nov/22/us-dollar-status-fallen

   “For the world’s central banks – the biggest, most conservative, and most influential investors on the planet – the U.S. dollar remains the principal anchor of their foreign currency reserves. It is the same in the black market economy.” (Dyer 2014, 230)

   “Foreigners hold $200 billion in Chinese stocks and bonds; they [hold] $16 trillion in American securities. For now, the yuan is a bit player on the global stage. But at the start of the 20th century, so was the dollar.” (The Economist, 1 August 2015, 9)

-“The IMF will add the yuan to its basket of reserve currencies [in 2016], an international stamp of approval of the strides China has made integrating into a global economic system dominated for decades by the US, Europe and Japan….[The yuan] will join the dollar, euro, pound and yen in its Special Drawing Rights basket…”

   “Weightings will be 41.73 percent for the dollar, 30.93 percent for the euro, 8.33 percent for the yen and 8.09 percent for the British pound.”

   “Approval is unlikely to have much impact on short-term demand for the yuan, given the SDR’s minor share of global reserves…”

   “The decision should boost efforts by Xi to open up China’s financial markets. China implemented a series of reforms to win IMF support, such as opening its onshore bond and currency markets to foreign central banks and reporting its reserves to the IMF.”

   “While the SDR isn’t technically a currency, it gives IMF member countries who hold it the right to obtain any of the currencies in the basket to meet balance-of-payments needs.” http://www.bloomberg.com/news/articles/2015-11-30/imf-backs-yuan-in-reserve-currency-club-after-rejection-in-2010

-“Because the dollar is used so widely in commerce and investment, and because it is such a trusted store of value…foreigners are only too happy to buy bonds from the American government that are issued in its own currency….Even if the dollar suddenly gets weaker, this does not affect the American government in the same way it would affect other countries, because the U.S. repays foreign investors in the same currency it collects in tax revenues. It gives an important competitive advantage to American companies and banks, which get to do business in their own currency and avoid the vagaries of foreign-exchange markets. And it allows the U.S. government to live beyond its means without facing the punishment that other governments inevitably suffer.” (Dyer 2014, 230)

-“Just as Americans should not be surprised by China’s urge to build a grand navy, they should also not be blindsided by Beijing’s ambitious plans to turn the renminbi into a global currency. [“Renminbi” is the official name of China’s currency. “Yuan” is the name of a unit of the renminbi currency.] After all, this is precisely what America did at a similar stage in its development, when it wanted to start turning its economic scale into greater international influence. Whereas America’s plan was written by an elite band of Wall Street and Washington figures [who met secretly in 1910 and that included Benjamin Strong of Bankers Trust, Henry Davison of J. P. Morgan, Paul Warburg of Kuhn Loeb, Senator Nelson Aldrich, and Abraham Piatt Andrew the assistant secretary of the Treasury Department], China’s global-currency push has been orchestrated by a small group of the Communist Party elite….But for history to repeat itself, and for the renminbi to eclipse the dollar, two very substantial conditions need to be met. China will have to tear up its economic model, and America will need to let it happen. Both are possible, but neither is inevitable.” (Dyer 2014, 241-2)

-“China sees a global role for its currency…as both good business and good power politics. Beijing knows it will be a long process that could take several decades.” (Dyer 2014, 237)

-China’s version of “state capitalism is…the main obstacle to China’s developing a major global currency….Although China is now the biggest exporter of manufactured goods in the world, the reason few people use the renminbi to settle trade transactions is that Beijing maintains a high wall of capital controls that protect its economy from the fickleness of international financial markets.” “If China were to allow capital to flow more easily in and out of the country, it would have to adopt a much more flexible exchange rate…That means it would become much harder for Beijing to depress the value of its currency artificially to help its exporters – [an important] element of [its] economic model…” (Dyer 2014, 245, 247)

-“The supposed leverage that China derives from its dollar holdings is something of a myth…[I]f China were to try and sell a substantial chunk of its U.S. bond holdings, it would send the market into a tailspin, and bond prices – including China’s own investments – would plummet. Such actions would also force down the value of the U.S. dollar, making China’s exports less competitive and threatening hundreds of thousands of factory jobs.” (Dyer 2014, 235)

15. In 2010, how many Chinese companies were on the Fortune Global 500 list?

-“In 2001 there were only twelve Chinese companies on the Fortune Global 500 list; a decade later, Chinese companies…totaled sixty one….[F]orty-nine are SOEs [state-owned enterprises]. China now ranks third on the global list, only slightly behind Japan.” However, “When one examines the assets and operations of these [61] Chinese corporations it becomes clear that the vast majority operate almost exclusively domestically. In other words, [many of them] cannot be considered real multinationals…Haier, Huawei, and the national oil companies Sinopec, CNOOC, and CNPC are really the only ones that have truly global capital, operations, and sales.” (Shambaugh 2013, 184-6)

-“[A]s of 2010, not a single Chinese company has managed to crack the Business Week/Interbrand international ranking of the ‘100 Best Global Brands’.” (Shambaugh 2013, 187)

-While Chinese “vehicle manufacturers are establishing themselves around the world”, they “accounted for less than 2 percent of the global auto trade” in 2011. (Shambaugh 2013, 196)

-“[L]enovo has become China’s top-selling computer brand and the world’s third-largest vendor of PCs (accounting for 10.4 percent of the market share in 2010). (Shambaugh 2013, 199)

-“By 2006…Chinese companies were the largest global manufacturers in twenty-eight of thirty-two home appliance product categories [such as microwave ovens, washing machines, and refrigerators]…Haier Corporation has done the best and is way out in front of the competition…” “By 2011, Haier had established twenty-nine manufacturing facilities, sixteen industrial parks, and eight R&D centers on all continents, sales staff of 58,800, and total revenues over $20 billion….[H]aier is at the cutting edge of both practical and green products.” (Shambaugh 2013, 197-8)

-“Huawei is one of the few Chinese firms to have successfully gone [truly] global…and it is thus considered by many to be China’s most successful multinational corporation. In 2012 Huawei overtook Swedish rival Ericsson and became the world’s largest manufacturer of telecom equipment, producing everything from switches and routers to smart phones and tablet computers….[H]uawei now operates in 140 countries.” (It supplies all of Europe’s major telecom operators, including Vodafone and Deutsche Telekom.) “Despite failed attempts to acquire the U.S. firms 3Com, 3Leaf, and Sprint Nextel, Huawei is redoubling its efforts in the United States and Canada.” (Shambaugh 2013, 193, 195)

-“The ongoing European economic and debt crisis has made the continent a particularly attractive target for Chinese investors….The British car company MG Rover was purchased by Nanjing Automobile Corporation. Geely bought Volvo….PetroChina took a stake in the British oil refiner Ineos…Germany has been a primary target for Chinese takeovers.” (Shambaugh 2013, 181-2)

-In 2016, “for the first time, China’s investments in other countries will exceed the world’s investment in China, exceeding $100-billion (US) annually. For the past decade, most of that investment was a matter of state-owned enterprises building infrastructure projects in poor countries in Africa and elsewhere. But now more than half of that investment (up from a quarter two years ago) is made by China’s private sector, and the money is flowing into wealthy countries like Canada.” Hence, a “key question now is how long advanced economies will put up with large inflows of private Chinese capital while their own firms continue to be shut out of the fastest-growing parts of China’s economy.”
http://www.theglobeandmail.com/opinion/with-or-without-a-trade-deal-we-will-become-more-entangled-with-china/article31696181/  (3 September 2016)

16. True or False: The US National Security Agency tampered with routers and servers manufactured by Cisco to direct large amounts of Internet traffic back to the NSA from Cisco’s customers.

-True. “[W]hile American companies were being warned away from supposedly untrustworthy Chinese routers, foreign organizations would have been well advised to beware of American-made ones. A June 2010 report from the head of the NSA’s Access and Target Development department is shockingly explicit. The NSA routinely receives – or intercepts – routers, servers, and other computer network devices being exported from the United States before they are delivered to the international customers. The agency then implants backdoor surveillance tools, repackages the devices with a factory seal, and sends them on. The NSA thus gains access to entire networks and all their users….Among other devices, the agency intercepts and tampers with routers and servers manufactured by Cisco to direct large amounts of Internet traffic back to the NSA’s repositories….Warning the world about Chinese surveillance could have been one of the motives behind the US government’s claims that Chinese devices cannot be trusted. But an equally important motive seems to have been preventing Chinese devices from supplanting American-made ones, which would have limited NSA’s own reach.” (Glenn Greenwald, No Place To Hide: Edward Snowden, The NSA, and The U.S. Surveillance State, Signal, Canada: 2014, 148-51. Hereinafter referred to as, “Greenwald 2014.”)

-In 2012, the “Intelligence Committee of the U.S. House of Representatives recommended that ‘the United States should view with suspicion the continued penetration of the U.S. telecommunications market by Chinese telecommunications companies [such as Huawei and ZTE].’ [However, the Intelligence Committee] acknowledged that it had obtained no actual evidence that the firms had implanted their routers and other systems with surveillance devices….The constant accusations became such a burden that…Huawei announced in November 2013 that [it] was abandoning the US market.” (Greenwald 2014, 147-8)

-“Much of the Snowden archive revealed what can only be called economic espionage…For years, President Obama and his top officials vehemently denounced China for using its surveillance capabilities for economic advantage while insisting that the United States and its allies never do any such thing….[However, it is clear that the NSA] acts for the benefit of what it calls its ‘customers,’ a list that includes not only the White House, the State Department, and the CIA, but also primarily economic agencies, such as the US Trade Representative and the Department of Agriculture, Treasury and Commerce…Reporting on a group of…documents leaked by Snowden, the New York Times noted that its surveillance targets often included financial institutions and ‘heads of international aid organizations, foreign energy companies and a European Union official involved in antitrust battles with American technology businesses.’” (Greenwald 2014, 134-8)

-China “possesses global reach [with] its cyber capabilities. China has the capacity to strike anywhere on the planet, and it has done so with increasing frequency in recent years. In November 2011, the Office of the National Counterintelligence Executive, which reports to the U.S. government’s Director of National Intelligence, issued a stinging public report to Congress accusing China and Russia of being the major perpetrators of cyber attacks on U.S. private sector companies [and] government agencies….In addition to Google’s Gmail accounts, those of many international China experts have been hacked in recent years, along with human rights and Tibet activists.” However, the U.S. government is in no position to lecture the Chinese about domestic or foreign electronic surveillance. (Shambaugh 2013, 297-8)

-“Along with Ericsson of Sweden and Cisco of the U.S., [the Chinese company] Huawei is one of the main companies making the essential infrastructure that goes into modern phone systems, including mobile networks….That is where the cyberwar fears come in. Security experts say that such expertise means that Huawei could leave devices in American phone systems that might be used to listen into telephone conversations, or it could hide corrupted computer code that would allow China to disable a phone network during a conflict….Every time it has tried to expand in the U.S., Huawei has found itself frustrated [on national security grounds]….In order to do business in the U.K., Huawei…has established a separate testing center which works closely with British government agencies to ensure that the equipment and software sold by Huawei are reliable.” The U.S. runs “a great risk in rejecting companies like Huawei so aggressively. There is bound to be retaliation: China is as afraid of Cisco as the U.S. is of Huawei.” (Dyer 2014, 264-5)

17. True or False: Most overseas Chinese oil production is reserved for China.

-False. The western fear of China “locking up” oil is unwarranted. “[T]here is no evidence that China is regularly removing large volumes of oil from world markets. Most overseas Chinese oil production…is actually sold onto world markets rather than shipped back home.” (Levi 2014, 43)

-“Far from locking up global resources and steering the world away from free markets, China is dependent on – and being drawn ever deeper into – the market arrangements that preceded its rise. Chinese companies are no different from Japanese and U.S. companies before them in investing in overseas supplies. Their performance on environment, labor, and corruption, many claim, is entirely within the mainstream, particularly when it is measured against that of firms from other developing countries. And even though local populations often recoil at large Chinese investments, they have similarly hostile reactions to many non-Chinese incursions, including from Western multinationals, massive Middle Eastern sovereign wealth funds, and opaque global investment funds.” (Levi 2014, 6-7)

-“Rapidly rising Chinese resource demand no longer comes as a shock to the global system – and, as a result, radical price rises mirroring those seen over the last decade are unlikely.” (“In 2010 China accounted for an astonishing 40 percent of global copper demand, driving prices to nearly $9,000 per ton….In 2009 China imported 628 million tons of iron ore, 68 percent of total world exports.”) (Levi 2014, 193) (Shambaugh 2013, 171)

-“To the extent that China is afraid [resource] prices will rise intolerably, it can hedge its exposure by buying access to deposits on commercial terms, precisely the approach many Chinese companies have taken in recent years.” (Levi 2014, 139)

-Despite recent growth, “The sheer volume of global mining investment coming from China still pales next to the shares taken by players from the United States, Canada, Australia, and other established sources.” Yet, “in more and more individual countries [such as Mongolia] China is either the biggest player or the largest source of new investment and growth.” (Levi 2014, 62)

-“[A]merican firms invested…nearly five times more than China [in 2010]. In aggregate, the United States has an accumulated stock of $4 trillion, twenty times larger than China’s…” (Shambaugh 2013, 178)

-Chinese firms’ overseas “labor, environmental, and financial practices are often no worse (but certainly no better) than what some of their competitors bring to bear.” (Levi 2014, 189-90)

18. Even if the US greatly reduces its reliance on Persian Gulf oil, why will it not reduce its influence over the Persian Gulf?

-Some analysts argue that as America reduces its reliance on Persian Gulf oil, the Gulf’s “oil supply will soon become irrelevant [to the US and, therefore,] the region will lose its relevance to US foreign policy.” This argument is flawed on three main grounds: (i) “[A]ny instability in oil supplies from the Persian Gulf region affects oil prices throughout the world. Thus, it follows that the world’s economy, including that of the US, is affected, regardless of where the US purchases or produces its oil.” (ii) The US protects “the interests of other capitalist nations that are strategically important to them, especially Japan and the EU. For example, about 87 percent of Japanese crude oil imports come from the Persian Gulf region. For the global capitalist system to thrive, no single power must be allowed to gain control of the Middle East region. The emergence of a dominant state in the Middle East could potentially disrupt oil supplies to the rest of the world.” (iii) By maintaining a strong military and economic presence in the Persian Gulf region, the US “would…be sitting in a chokehold position next to China’s energy lifeline” which would provide the US with leverage if relations with China become particularly strained. (Seyed Hossein Mousavian and Shahir ShahidSaless, Iran And The United States: An Insider’s View on the Failed Past and the Road to Peace, Bloomsbury, New York: 2014, 89) (Vali Nasr, The Dispensable Nation: American Foreign Policy in Retreat, Doubleday, New York: 2013, 245. Hereinafter referred to as, “Nasr 2013.”)

-“[C]hinese interest in Middle Eastern energy sources threaten[s] to put at a disadvantage the very allies – India, Japan, South Korea, and even much of Europe – that America needs to balance China. If these countries became dependent on China for their energy supplies they would have to align their foreign and economic policies with China, which would mean moving away from the United States. That would put a big dent into [US] plans for containing China in the Asia-Pacific and ensuring the region’s continued prosperity and openness.” (Nasr 2013, 222)

-“In the run-up to World War II America, Britain, and the Netherlands did deny energy- and resource-poor Japan access to oil, rubber, and iron shipments from Southeast Asia and the Dutch East Indies. This is a lesson that is not lost on China’s strategic decision makers….Access to energy, and therefore the Middle East, will be at the heart of the next global rivalry.” “President Obama’s ‘pivot to Asia’ policy is at its core a policy of containing China – it is a ‘forward-deployed diplomacy to face China in its backyard.’…But it would be folly for America to build its new strategy thinking that the Middle East has nothing to do with China.” (Nasr 2013, 229, 215-6)

-The “Middle East accounts for 5 percent of U.S. trade and only 1 percent of its direct foreign investment…” “In 2010 Chinese exports to the region were close to double that of the United States (China is now the largest exporter to the region)…” “China’s trade with Iran has grown from $1.3 billion in 1999 to $45 billion in 2011; with Saudi Arabia from $4 billion in 2001 to $50 billion in 2011…” (Nasr 2013, 220-1)

19. Which country is the biggest consumer of oil?

-The US is the biggest consumer of oil, however, by “2010, China had become the biggest consumer of energy in the world and the second-biggest consumer of oil, half of which is now imported….New great powers often fret that rivals could damage their economy with a blockade. Such warnings have become common in China over the last decade. For every ten barrels of oil that China imports, more than eight travel by ship through the Strait of Malacca, the narrow sea channel between Indonesia, Malaysia, and Singapore, which is patrolled by U.S. ships….Can [China] rely on a rival to protect the country’s economic lifeline?” (Dyer 2014, 26)

-Forty-seven percent “of China’s oil imports…comes from the Middle East. In 2009, Saudi Arabia was the largest supplier to China, followed by Iran, Oman, Iraq, and Kuwait. Sub-Saharan and North Africa has become China’s second main regional supplier, led by Angola, Sudan and Libya.” (Shambaugh 2013, 163)

-It is only to be expected “that as China becomes a much bigger buyer of natural resources, more and more countries will want to curry favor well beyond the commercial sphere.” “When oil sales are the lifeblood of an economy, even a tiny chance that markets won’t suffice is enough to encourage political efforts to backstop relationships with major oil buyers. The result is likely to be closer ties between China and major oil producers in the coming years.” (Levi 2014, 186-8)

-“Leading China’s global hunt for oil and gas have been its three major national oil companies (NOCs): China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation (CNOOC), and China Petrochemical Corporation (Sinopec)….By 2010 Sinopec and CNPC had grown to become the fifth- and sixth-largest multinational corporations in the world, as measured by revenue…Only Wal-Mart, Royal Dutch Shell, ExxonMobil, and BP ranked higher…” (Shambaugh 2013, 165)

20. Which country in the 1950s and 1960s experienced growth rates similar to China’s, and was likewise castigated for its “disrupting” approach to commerce?

-“In the 1950s and 1960s, as Japan emerged from World War II, the country consistently posted growth rates similar to those seen more recently in China….Japanese oil imports accounted for a considerably larger part of the world market than Chinese imports do today….Rising Japanese resource demand also manifested itself in overseas Japanese investment in resource development, from Australia to Africa. And, as is the case today with China, there was widespread concern about the methods and goals that the Japanese pursued….[Japanese companies,] through powerful business organizations, worked far more closely with government than U.S. companies did. Government could also direct industry to make moves for national, rather than corporate reasons, as when it required the Japanese conglomerate Mitsui to stay in the Iranian petrochemicals market ‘long after the firm was eager to withdraw.’” China is thus not “the first emerging power to generate alarm in the last fifty years. That distinction belongs to Japan.” (Levi 2014, 2-3)

-“[B]y the late 1970s, [Japan] was the main buyer of iron ore from Australia and India, the top purchaser of Australian copper ore, and a major buyer of Brazilian iron ore….Yet for all the portent of change and disruption, three decades later no one would claim that Japan fundamentally altered how global oil and mineral markets function.” (Levi 2014, 4-5)

21. Can capitalists become members of the Chinese Communist Party?

-Yes. “When Deng Xiaoping died in 1997, Jiang Zemin replaced him and continued Deng’s capitalist reforms. He introduced amendments to China’s Constitution that declared private enterprise a ‘major component’ of the ‘socialist market economy.’ Under Jiang, the Communist Party also began to recruit Chinese capitalists as members. By 2006, private enterprises accounted for half of China’s economic output…” http://www.crf-usa.org/bill-of-rights-in-action/bria-24-1-a-communism-capitalism-and-democracy-in-china

-As the Party expected, “the economically most active [are] not demand[ing] political liberalization. The reason is simple[:] they are using the existing system for even greater improvement of their…life conditions. Moreover, those who are benefiting most from this are often…members of the Party or [people who] have connections…with those who have [power]. Nevertheless, that does not mean that everyone in China desires to preserve the existing system. Some would prefer the return to Maoism and its principles of equal society – they are called neo-Maoist and criticize…market liberalization. Others call for…real political democratization and change in government.” http://cenaa.org/analysis/the-china-threat-theory-revisited-chinese-changing-society-and-future-development/

-The Chinese Communist Party’s economic model – a fusion of the market and strong government – proved itself in “the decade after the Soviet collapse”. While “much of Eastern Europe that had raced to the free market encountered unemployment, stagnation, and political instability,” China’s economy “began to surge.” (Osnos 2014, 151)

-The 2011 Arab Spring “unnerved Chinese leaders more than any event in years….It was easy to overstate the power of technology, but it had clearly aided the opponents of authoritarianism….Some of the [Arab leaders], such as the king of Jordan, responded to the Arab Spring by promising to loosen up, in the hope of averting an explosion. But China’s leaders chose the opposite course. The lesson they took from Mubarak’s fall was the same they had taken from the collapse of the Soviet Union: protests that go unchecked lead to open revolt.” (Osnos 2014, 219)

-The Party considers that continuing to improve the economic condition of the Chinese people is its best “guarantee for internal stability” and preventing aggressive demands for political democratization. (In fact, the “results of several opinion polls suggest [that] as long as…economic growth and improvement of life conditions [continue], people do not desire political change.”) “Therefore, the government will try to prevent any threat to the development of the economy. This may be one of the arguments supporting the peaceful outlook of Chinese foreign policy. China has several [critical domestic] issues [to address]. Narrowing of the ever-widening social gap and increasing disparities between rural and urban areas are included in a long-term development plan of the ruling party. Moreover, the existence of 56 nationalities and especially the demands of independence of two provinces Xinjian and Tibet represent a possible destabilizing factor in Chinese development. The stability of the political system depends on the ability of the central government to face these challenges and handle them according to expectations of the majority of the population that is nowadays more informed then ever.” http://cenaa.org/analysis/the-china-threat-theory-revisited-chinese-changing-society-and-future-development/

-The Chinese Communist Party has over 80 million members (approximately 6 percent of the population) and it has “no organized opposition. It [has] Party cells inside even the most Westernized technology companies and hedge funds. China [is] a high-functioning…dictatorship without a dictator. The government answered to the Party; the Party appointed CEOs and Catholic bishops and newspaper editors. It advised judges how to decide sensitive court cases, and it directed the nation’s military generals. At the lowest levels, the Party felt like a professional network.” However, “civil society is no longer dormant. Beijing continues to define the rules of economic development at home, but the media, nongovernmental organizations, and the general public now act as watchdogs, holding local officials and business leaders accountable for their actions…” (Osnos 2014, 26) (Levi 2014, 100)

-The Party has kept a tight grip on political control while permitting space for many other freedoms, such as where one works and travels and whom one marries. “[T]he totality and diversity of what is permitted to be discussed online and in print would surprise many foreign pundits….To be sure, there still remain ‘no go zones’ – such as critically analyzing China’s own foreign policy, human rights, or humanitarian interventions…” “[S]cholarly debate is increasingly broad gauged and animated…” (Osnos 2014, 7) (Shambaugh 2013, 15-6)

-“[T]he Chinese Communist Party has been suffering a legitimacy crisis since it abandoned Marx and embraced the market…” “As a result [it] has reached for any number of new props to replace its socialist ideals, from economic managerialism to nationalism. Confucius, the Olympics, and Nobel Prizes are all part of the same search for legitimacy. China is not really selling itself to the world: the party is trying to justify itself to the Chinese people.” (Dyer 2014, 11, 198)

-“After the quixotic disasters of the Mao era, the Communist Party has gone out of its way to reduce the space for another all-powerful leader. The party now has a fixed retirement age, and an entrenched process of leadership transitions…The upside is that the party is much more predictable and professional. The downside is that it is now governed by committee which can slow decision making…Over the last decade, China has seen a fracturing of power among the elite [with factions in the military, local governments, and state-owned companies].” (Dyer 2014, 36)

-“In China, there exists a universal belief in a strong state that provides for society…Part of this is due to the PRC’s sixty-year-plus experience with socialism, but it also goes back much further, to the imperial Chinese state. Unlike the European and Anglo-Saxon tradition, there is no underlying concept of a Lockean social contract whereby citizens comply with the law because they accept the underlying norms of the law or contribute their individual earnings to the state via taxes so as to provide for the common good. Many Chinese do not understand why they must pay individual or corporate taxes…This is beginning to change somewhat…” (Shambaugh 2013, 155)

-“China’s global expansion did not occur by happenstance. It grew directly out of Communist Party…policies launched [in] December 1978…” And, in “case people wondered what would happen in the absence of the Party, the People’s Daily painted a dire picture. After the fall of the Soviet Union, it said, Russians discovered that their ‘GDP fell by half…their ships aged and rusted and collapsed into heaps of scrap metal; oligarchs emerged to plunder state assets; Russians lined up on the sidewalk to face supply shortages; war veterans had to sell their medals in order to buy bread.’” (Shambaugh 2013, 5) (Osnos 2014, 365)

22. True or False: While Prime Minister Wen Jiabao was in office, his family amassed $2.7 billion in assets.

-True. “[T]he New York Times relied on corporate records to calculate that in the years that Prime Minister Wen Jiabao was in office [2003-2013], his family amassed assets worth $2.7 billion….[I]t was becoming clear that China, on the one hundredth anniversary of the end of the last dynasty, was returning to a form of aristocracy.” (Osnos 2014, 260)

-“In June 2012, Bloomberg News used corporate documents and interviews to calculate that the extended family of China’s incoming president, Xi Jinping, had accumulated assets worth hundreds of millions of dollars. That wealth was hard for the Party to explain, so it decided not to try: within twenty-four hours, the government blocked the Bloomberg website…and it barred Chinese banks and companies from signing new contracts for use of Bloomberg terminals. It would cost the company millions in lost sales and advertising.” (Osnos 2014, 258-9)

-The “Communist Party’s authority rested on the notion that even if local bureaucrats were corrupt, its top leaders so exemplified wisdom, justice, and meritocracy that dissent and direct elections were superfluous and obsolete….When the government was seen to be violating the principle of ‘rule by virtue,’ public reaction could be intense: in the eighties, the uprising at Tiananmen Square was fed in large part by an upswell in corruption.” (Osnos 2014, 258)

-“In 2011 the central bank [of China] posted to the Web an internal report estimating that, since 1990, eighteen thousand corrupt officials had fled the country, having stolen $120 billion…(The report was promptly removed.)” (Osnos 2014, 245)

-Corruption began to grow significantly in the early 1990s “when the government began to open up the distribution of land and factories for private ownership…” (Osnos 2014, 249)

-“Because the Communist Party monopolizes power in China, there is little opportunity for fundamental reform of the political system. Party officials at all levels routinely leverage that monopoly to engage in epic corruption. Bribery, embezzlement, kickbacks and property theft are endemic.” http://www.forbes.com/sites/lorenthompson/2014/06/06/five-reasons-china-wont-be-a-big-threat-to-americas-global-power/

-“In case after case, the disasters that enraged the Chinese public were traced back to graft, fraud, embezzlement, and patronage: The schools that collapsed in the Sichuan earthquake had been compromised by kickbacks; the train that crashed in Wenzhou was managed by one of the country’s most corrupt agencies. In the case of the tainted infant formula that killed children in 2008, dairy farmers and dealers first bribed state inspectors to ignore the presence of chemicals. Then, when children fell ill, the dairy company bribed news organizations to suppress the story….Even the military was riddled with patronage; commanders received a string of payments from a pyramid of loyal officers beneath them….Every country has corruption, but China’s was approaching a level of its own. For those at the top, the scale of temptation had reached a level unlike anything ever encountered in the West.” (Osnos 2014, 250, 252)

-“In most countries, the long-term effects of kleptocracy are easy to predict: [falling economic growth]. (Think Haiti under Francois Duvalier or Zaire under Mobutu.) But the exceptions are important. In Japan and Korea, corruption accompanied each nation’s rise, not its collapse. There is no more conspicuous case than the United States….The [corrupt] excesses of the [US] railroad boom [from the mid-1860s to the early 1870s] led to the Panic of 1873 and subsequent financial crises, before political pressure to curb abuses gained momentum during the Progressive Era.” “[U]nlike Zaire, China punished many people for [corruption]; in a five-year stretch, China punished 668,000 Party members for bribery, graft, and embezzlement; it handed down 350 death sentences for corruption…” “When an economy thrives, citizens can tolerate even flagrant corruption. But when it slows, that same level of corruption can become intolerable.” (Osnos 2014, 261-3)

23. What right did Britain assert as a pretext for the first Opium War with China?

-“The real cause of the first Opium War (1839–1842)…was Chinese resistance to Britain’s free-trade demands and practices, of which the unrestricted trade in opium was only the most controversial example. Seeking to end high Chinese import duties and other restrictions on foreign trading, the British found a pretext for war when China prohibited the importation of the drug and then confiscated a British shipment of opium.” http://www.encyclopedia.com/topic/Opium_Wars.aspx

-Suffering international condemnation after the 1989 Tiananmen Square massacre, “the Communist authorities started to lean on the…emotional memory of national humiliation. The school curriculum began to emphasize the ‘Century of National Humiliation,’ which started in 1840 with the First Opium War and ended with the Communist takeover in 1949. This time frame knits together the different invasions, unfair treaties, economic exploitation, and other indignities that a weakened China suffered at the hands of the Western powers….The bullying, war crimes, and injustice were real, of course, the genuine story of a proud civilization humbled by foreigners who had become more powerful without anyone in China realizing it. Yet it is also a version of history that leaves out as much as it includes….Long before British warships ever sailed up the Yangtze, China’s frontiers had been a constantly shifting map that contained their own stories of expansion and aggression.” (Dyer 2014, 150)

-“The Communist Party has faced a slow-burning threat to its legitimacy ever since it dumped Marx for the market and dropped the Mao cult of personality, a threat that was only exacerbated after it turned the army on its own people in Tiananmen [in 1989]….The emphasis on humiliation has helped the Communist Party create a sense of unity that had been fracturing, and to define a Chinese identity fundamentally at odds with American modernity. This strand of nationalism has become an important part of its claim to maintaining a monopoly of political power, a deliberate project to mold the historical instincts of young Chinese.” (Dyer 2014, 152)

24. Why are Europe-China relations far less strained than US-China relations?

-Once the Cold War ended, Europe’s relationship with China “could finally begin to develop on its own, free of the shadow and influence of the U.S.-Soviet rivalry. Importantly, there is hardly any Taiwan lobby in Europe (as there is in the United States) to influence the public and politicians, and there is no ‘Taiwan issue’ between European governments and China, as all faithfully subscribe to the ‘One China Principle.’ Moreover, Europe has no military presence and few security interests in East Asia (unlike the United States), thus not causing security tensions with China.” (Shambaugh 2013, 89)

-The Europe-China relationship “is anchored in commerce.” Europe is China’s “number one global trading partner, although China ranks second for Europe….Europe has also become the largest source of technology and equipment transfer to China…” (Shambaugh 2013, 86)

-European public opinion on China has been negatively affected by: “incidents of…industrial espionage”; “concerns over human rights” (particularly in Tibet, “as the Tibet issue resonates deeply among European publics”); “discriminatory trade and investment practices…particularly the continuing widespread theft and pirating of intellectual property”; and, “the ballooning EU trade deficit with China”. “[F]or its part Beijing remains distressed by the EU’s continuing arms embargo [engendered by the 1989 Tiananmen massacre] and failure to grant China Market Economy Status.” (Shambaugh 2013, 89-90, 92)

-Beijing has been focusing on “individual member states, particularly the UK and Germany. The German-China commercial relationship has expanded dramatically…and Berlin is Beijing’s partner of choice in Europe.” (Shambaugh 2013, 90)

25. Is Taiwan a democracy?

-Yes. During the “1995-96 standoff over Taiwan’s election,” the U.S. “sent two aircraft-carrier groups into the region as a demonstration of force [after] China launched several missiles into Taiwanese waters in order to intimidate voters…” Taiwan was thus able to hold “its election without further threats.” Fair elections continue to be held in Taiwan. (Dyer 2014, 114)

-“It is a measure of the rapid advance in China’s air force and navy in the last two decades that, if a conflict did break out over Taiwan, it is now not at all clear that the U.S. would be able to intervene decisively in the Taiwan Strait.” (Dyer 2014, 114)

-China’s official position is that China has “sovereignty over Taiwan,” and “the PRC [People’s Republic of China] is the sole legitimate government of China.” http://www.china.org.cn/english/taiwan/7956.htm

26. Why is Tibet critical to the Chinese Communist Party?

-Tibet is deeply rooted in China’s “framework of national humiliation. One of the flip sides of modern China’s victim mentality is a ferocious defense of its sovereignty, which was impugned by foreign powers in the nineteenth century, the invaders who ‘carved up China like a melon.’…Control over Tibet is tightly linked to the urge to restore national pride. It is that mindset that can turn a dispute between Han Chinese and one of the country’s ethnic minorities into a struggle against imperialism. Since the early years of the republic, China’s leaders have been faced with the dilemma of trying to forge a modern, unified nation-state from the loose, saggy terrain of a multinational empire. The new national identity has leaned heavily on a strong sense of shared suffering, which Beijing has then imposed on all the country’s ethnic groups, even those whose historical connections to the Chinese state are full of nuance, complexity, and in some cases conflict. For Beijing to recognize deep political problems in Tibet or among other ethnic groups would be to undermine the narrative of China as a victim of outside interference.” (Dyer 2014, 169-70)

-Sudan notwithstanding, China “is particularly allergic to any move that endorses the breakup of multiethnic countries. Beijing fears that such campaigns could encourage similar demands from its own ethnic regions, such as Tibet and the heavily Muslim Uighur population in Xinjiang, as well as encouraging an independence push by Taiwan. When Kosovo declared independence from Serbia in 2008, China refused to recognize the new state.” (Dyer 2014, 218-9)

-“China’s defense of sovereignty has a lot of support at the UN from developing countries with colonial pasts. There is even sympathy among such big democracies as Brazil and India, on whom the humanitarian evangelism of the West often grates, and who were appalled by the aggressive unilateralism of the Iraq War.” Furthermore, “The Libya conflict in 2011 added to their mistrust. Like China and Russia, some of the governments were dismayed by the way the Libya operation in 2011 developed, when the U.S., U.K., and France quickly transformed UN approval for a humanitarian operation in the east of the country into a military campaign to oust Muammar Qaddafi….Many of the new swing powers [such as Brazil] agree on the need to respond to humanitarian crises, but they are loath to underwrite a new set of rules which could become a blank check for further U.S. unilateralism.” Yet “China’s rapidly expanding interests around the world are undermining its reluctance to get involved in crises.” (Dyer 2014, 206, 208, 213-4)

27. Why does China provide considerable political and economic support to North Korea?

-“Ever since Mao ordered his troops to fight in the Korean War [1950-53, in which several hundred thousand Chinese died in brutal fighting], China has seen North Korea as a sort of buffer…that keeps the U.S. military presence at a distance from its borders. The passage of time and the decrepitude of the Pyongyang regime have not changed that fundamental reality. During a period when China was looking to try and push back against U.S. influence in the region, the last thing Beijing wanted was the end of the North Korean regime and its replacement by an America-friendly, united Korea.” However, “By giving so much support to Pyongyang, Beijing was actually doing some of Washington’s own diplomatic work. South Korea’s unease about the American military presence [on its soil] has not ended, but the alliance between the two countries has been reinforced.” (Dyer 2014, 87, 88)

-“Nuclear-armed and miserably poor, the Stalinist regime in North Korea relies on Chinese aid to fend off complete collapse.” (“Regime implosion in the North is Beijing’s worst nightmare…”) North Korea “is also the one country in the region that might plausibly be called an ally of China.” (Dyer 2014, 85) (Shambaugh 2013, 101)

-“The booming economic relationship with South Korea pushed China to question its ties with Pyongyang. Tens of thousands of South Korean companies have invested in China…, and the flow of goods and people…have become one of the brightest constellations in the Asian manufacturing network.” “China is South Korea’s largest trading partner and destination for FDI….Transport ties are thick…” (Dyer 2014, 86, 100)

-“China’s strategy for building ties with South Korea has both an economic motive and a strategic dimension. In the early 1990s, Chinese strategists concluded that China would have little leverage in shaping the eventual outcome of the divided Korean Peninsula if it did not enjoy strong ties with South Korea. Improved ties would also offset any potential threat to China from the U.S.-South Korean alliance and presence of U.S. forces on the peninsula….[T]he bourgeoning relationship has greatly benefited both countries and become a central element in the evolving balance of power in Northeast Asia.” (Shambaugh 2013, 100-1)

28. True or False: Vietnam is a military dictatorship led by a communist party that is seeking closer ties with the US.

-True. “However much the Vietnamese detested French colonialism, and however many millions had died in the war with the U.S., these had in many ways been but passing episodes in a much longer history of defending the country’s sovereignty. In that longer story, the principal antagonist was China.” Indeed, “a significant slice of modern Vietnamese identity is rooted in the struggles to maintain autonomy from China.” (Dyer 2014, 102-3)

-“More than any other country in the world, Vietnam has a political system that looks very similar to China’s – an all-powerful party that is still run on Leninist principles but which has dumped Marx and embraced the market in a bid to modernize its economy and society. The Communist Party ties [between China and Vietnam] run deep….Vietnam also knows that China’s economy is one of the main potential growth engines that can drive its own prosperity. Huge public investments in the southwest of China are driving new road and rail links down into northern Vietnam, cementing the economic connections even further….[Yet,] Hanoi believes it can both integrate its economy with China and seek new friends to help restrain China.” (Dyer 2014, 103-4)

-Vietnam’s disputes with China in the South China Sea are critical because “Vietnam’s long-term economic plans talk about deriving 50 percent of its GDP from maritime activities, including fishing and exploiting natural resources…” (Dyer 2014, 104)

-The U.S. must demonstrate sound diplomacy when engaging with Vietnam as “One of the surest ways for the U.S. to turn a budding rivalry with China into a sullen hostility would be to make a big push to expand military ties rapidly with Vietnam. If the U.S. were to start stationing substantial military assets there, for instance, China would begin to think of this as a potential staging point for aggression against its territory.” (Dyer 2014, 108)

-Vietnam “has no interest in becoming a new U.S. client state in the region….Hanoi is still hugely sensitive about allowing a U.S. military presence in the country…Behind Vietnam’s fervent diplomacy is a fierce desire to avoid being pulled into a Chinese sphere of influence. Yet the Vietnamese regard the U.S. purely as a balancing power, not as an ally, or as a nation they want to see dominate the region, or as a partner in containing China. [For China’s neighbors like Vietnam, Burma and Australia,] the endgame is not to circumvent China and its booming economy, but to find ways to deal with China on their own terms.” (Dyer 2014, 108-9)

-“An example of China’s willingness to compromise is its 2004 maritime boundary agreement with Vietnam over the Gulf of Tonkin, where China is entitled to 46.77 percent of the Gulf and Vietnam 53.23 percent….Though China seeks dominance [in the region] do not assume it will be unreasonable.” (Robert D. Kaplan, Asia’s Cauldron: The South China Sea and the End of a Stable Pacific, Random House, New York: 2014, 42. Hereinafter referred to as “Kaplan 2014.”)

29. What percentage of Australia’s exports go to China?

-“[O]ne-quarter of Australia’s exports now go to China, its biggest market….Australia has been one of the biggest beneficiaries of China’s growth. The economy has grown every year for the last two decades, even during the financial crisis…a record that no other developed economy has matched over the same period….With the possible exception of South Korea, no country is now more dependent on the Chinese economy.” (Dyer 2014, 98)

-While many pundits have been “concerned that countries which depend on Chinese economic dynamism for their livelihood will start to bend to the political prerogatives of Beijing, [the] very opposite has happened. Trade with China has boomed, investment from China has boomed, the Australian economy has boomed, yet Australia has not only decided to maintain its ties with the U.S., it has actually strengthened them….Canberra sees that China’s military buildup could undermine the stability of the region’s economy and believes a robust American military presence is the best way to fend off that prospect, a bulwark against the worst instincts of a more powerful China.” (Dyer 2014, 99)

-In 2009, total “new U.S. investment in Australia was A$93.8 billion; by contrast only A$7.8 billion came from China.” (Levi 2014, 120)

30. What is the foundation of China-Russia diplomatic cooperation?

-“China and Russia…see eye-to-eye on a series of regional and global issues, and they have forged a geostrategic axis and voting bloc in the UN Security Council. The heart of this axis is anti-Americanism and anti-interventionism. Beijing and Moscow jointly vetoed Security Council resolutions on Syria in 2012 and regularly water down numerous U.S. diplomatic initiatives and sanctions on Iraq, North Korea, Sudan, and other sensitive international issues. What the two sides term ‘strategic coordination’ has become a diplomatic headache for Washington. It runs deeper than tactical opposition to the United States and their mutual strategic desire to reduce America’s preeminent role in world affairs; it is also philosophical: both share strong opposition to coercion and the use of force in international affairs, and both cherish state sovereignty as the most basic principle of diplomacy.” (Shambaugh 2013, 83)

-“Beijing caused real dismay in western diplomatic circles in March [2014] when it refused to join in condemning Russia’s annexation of Crimea.” http://www.theguardian.com/commentisfree/2014/may/25/observer-editorial-china-challenge-not-threat

-“If there had been doubt about whether postcommunist Russia and still-communist China could work together, the [2001 Treaty of Neighborliness and Friendly Cooperation] and more than fifty other bilateral agreements signed since 1991 put these doubts to rest. [And,] After intensive negotiations…the two sides concluded twin agreements formally demarcating the 4300-kilometer border….Trade has grown from a negligible $5 billion during most of the 1990s to $83.5 billion in 2011.” (Shambaugh 2013, 81)

-“Throughout the 1990s and 2000s, Moscow supplied China a wide variety of advanced arms and military technologies…and assistance to China’s space program.” (Shambaugh 2013, 82)

-Despite their common interests, China and Russia “have a long history filled with suspicions and latent animosity.” “A China that behaves more and more like an ambitious great power is likely to be seen by Russia as being as much a rival as a partner. Moscow is already worried about the political and economic inroads that Beijing is making into Central Asia, about Chinese migration into eastern Siberia, and about Chinese naval intentions in the northern-Pacific Arctic region….During the Cold War, Washington was so intent on opposing communism around the globe that it ignored the emerging split in the Sino-Soviet relationship throughout the 1960s, until Richard Nixon finally exploited the opportunity when he met Mao in 1972.” (Dyer 2014, 211-2) (Shambaugh 2013, 86)

31. What is the main impediment to stronger China-India relations?

-“The Tibet issue and the fact that the Dalai Lama and his government in exile reside in India is a…complicating factor [for Sino-Indian relations]. Competition for energy security and secure sea lines of communication (SLOCs) is increasingly sensitive….Perhaps the greatest impediment [to closer ties] remains China’s ‘all weather friend’ Pakistan. Beijing and Islamabad have maintained a close alignment (indeed an alliance) since the early 1950s. China has backed Pakistan on virtually all disputes with India over the decades, has been the principal supplier of military equipment to Pakistan, and has not been responsive to Delhi’s concerns on Kashmir and other sensitive issues.” (Shambaugh 2013, 103-4)

-In November 2009, “Chinese and Pakistani officials…launch[ed] a new high-level…project: manufacturing up to 250 JT-17 fighter jets in Pakistan….The project is significant…in what it says about the depth of ties between China and Pakistan.” “In fact Pakistan accounts for the bulk of China’s weapons sales worldwide…China clearly wants a strong Pakistani military – and in particular a strong Pakistani navy – as a strategic asset in West Asia. The cooperation also extends to Pakistan’s controversial nuclear weapons program. The infamous A. Q. Khan, father of the Pakistani A-bomb, openly acknowledged Chinese assistance in the form of weapons-grade uranium, technical drawings of nuclear weapons, and tons of uranium hexafluoride that Pakistani centrifuges could spin into yet more weapons-grade uranium.” (Nasr 2013, 239-40)

-“India remains intensely proud of its hard-won autonomy and history of neutrality. The last thing it wants to be is a full-fledged American ally, to play the sort of loyal lieutenant role that Britain does. Nevertheless, New Delhi remains deeply suspicious about the nature of a rising China, and its relationship with Beijing will be shaped by how China decides to pursue its interests in its Indian Ocean backyard. The ‘String of Pearls’ has had more resonance in India than in the U.S., because the idea anticipates India’s fear that China will attempt to encircle it. The prospect of a Chinese naval base on its eastern flank (Burma) or its southern tip (Sri Lanka) plays into those fears. And nothing could exacerbate India’s anxieties more than a permanent Chinese presence in Pakistan…If China makes a concerted push to establish a permanent presence in the Indian Ocean, India will be pushed closer to the U.S.” (Dyer 2014, 66)

32. Why does China support Iran?

-“From Beijing’s perspective, relations with Tehran meet several priorities. First, Iran is seen to be a major – if not the major – regional power in the Middle East. This fits into China’s desire to build a ‘multipolar world.’ Second, Iran is implacably opposed to the United States and keeps Washington preoccupied and away from China. Third, Iran has become China’s second-largest regional supplier of oil and the largest supplier of natural gas. Over the past ten years, 13 percent of China’s imported oil has come from Iran…By 2009, China was importing 70 percent of its oil, 45 percent of which was sourced from the Middle East.” “China is Iran’s largest trading partner (an estimated $25 billion in 2009)…” (Shambaugh 2013, 107)

-“[I]ran has the only major oil and gas reserves in the region that are outside Western multinational control. It presents Chinese state-controlled companies with a unique opportunity to build ‘upstream’ capabilities. China has signed on to develop the North Azadegan oil field and to explore for natural gas offshore in the North Pars field under the Persian Gulf.” (Nasr 2013, 243-4)

-“Diplomatically, Beijing maintains sound bilateral ties with all the nations in the [Middle East] region, including Israel.” “Despite the strains introduced by the 2012 Syria situation [as China vetoed UN resolutions on Syria] and China’s own suppression of Uighurs [who are largely Muslim], Beijing’s relations with the Middle East remain stable…” (Shambaugh 2013, 107-8)

33. True or False: Between 2000 and 2012, Turkish trade with China grew more than 2000 percent.

-True. By 2012, “Turkish trade with China grew [to] $25 billion…‘China export[ed] $23 billion to Turkey, [and Turkey] export[ed] only $2 billion to China…’” (China makes up for the imbalance with foreign direct investment which translates into Chinese companies opening in Turkey.) (Nasr 2013, 224)

-China sees Turkey as “a new market for Chinese goods…and a good place to invest. Turkey has a growing middle class and consumer market…Its transport corridor and commercial ties make it a convenient gateway to large European and Middle Eastern markets as well as smaller ones in the Balkans, the Caucasus, and Central Asia….A Chinese-Turkish partnership could rival the influence that Russia and Iran exert in Central Asia and the Caucasus….Turkey’s special economic relations with Europe, its [strong ties] with its neighbors, and its port, road, rail, and pipeline infrastructure all add up to this: if China is in Turkey, then it will automatically be in many other places too.” (Nasr 2013, 226-7)

-In 2012 China and Turkey “signed on to deals on a wide range of economic projects…The two countries agreed to build cars and consumer goods together, but also to invest massively in new infrastructure for Turkey – some of which would serve China’s larger geostrategic interests. China agreed to sell energy-hungry Turkey two nuclear power plants, build oil refineries, develop new port facilities,…and lay down a railway from Istanbul through eastern Turkey with plans to connect (likely through Iran, where China is also building railroads) to lines in China proper that reach all the way to coastal cities that are the hubs of Chinese industry and commerce.” (Nasr 2013, 224)

34. In what region of the world is China most popular?

-“Public opinion polling in Africa shows the most positive perceptions of China anywhere in the world.” (Shambaugh 2013, 111)

-“[N]early half of China’s worldwide aid disbursements go to Africa….Much of this aid is commendable (particularly in the areas of anti-malarial and public health work, tertiary education, and agricultural assistance)…Much of China’s aid comes in the form of hard infrastructure: roads, rails, buildings, stadiums, etc. Even though these do have a positive impact on the recipient country in the end, they are normally built entirely with imported Chinese labor by Chinese construction companies with contracts from the Chinese government.” (Shambaugh 2013, 110)

-“[C]hina’s official foreign aid expenditures in 2009 was…$2.08 billion.” [This places China] not even among the top ten international donor nations….By contrast, the United States remains the world’s largest donor state, providing $31 billion in aid in 2010.” However, China’s aid “figures are comparable to relatively modest industrial countries.” (Shambaugh 2013, 204, 206)

-“Everywhere you go in the world, the beliefs about the scale of Chinese investments are greatly out of line with reality. Highly informed people in Africa are convinced that China is the top investor in the continent – in reality it is No. 4.” (The Montreal Gazette, 21 March 2014, A17)

-China’s posture toward Africa reflects a “heavy commercial presence oriented around the import of raw materials and energy supplies in exchange for exports of a range of manufactured goods…, and stepped-up developmental aid assistance….Oil comprises 80 percent of African exports to China (Angola accounts for 37 percent of China’s oil imports alone)….” (Shambaugh 2013, 109-110)

-“At the heart of most of China’s new economic relationships is one institution: China Development Bank. In the space of just a few years, it has become one of the most influential banks in the world….[I]ts objective is to support the overall economic goals of the government….Africa gets most of the attention in China’s overseas investments, but CDB has also made a big splash in Latin America….[T]he Chinese are mostly interested in using their loans to get access to energy and natural resources” such as oil-for loans deals with Venezuela. “Whatever China’s motives, the money it makes available gives governments new options and reduces the leverage of the Washington-based banks.” “Indeed, as a result of Beijing’s backing, Chavez went so far as to pull out of the World Bank and IMF formally in 2010.” “Little of this is aid: the borrowing countries have to repay the loans, which are at international interest rates.” (Dyer 2014, 258-62)

35. True or False: Both China and the US supported the creation of South Sudan as an independent country.

-True. In Sudan in 2005 a peace agreement was signed ending its civil war. “Given its huge oil investments in the country, China was delighted by the end of the civil war, but the relief was short-lived. Around three-quarters of Sudan’s oil reserves are in the south of the country, and according to the 2005 peace agreement, the south would be given a chance in 2011 to vote on independence.” (The independence vote was held and passed with overwhelming support.) Essentially, China was put into a situation where it had to support the South’s drive for independence. (Dyer 2014, 215)

-“Noninterference is a luxury that great powers sometimes cannot afford….China’s economy is now fed by iron-ore mines in Peru, copper mines in Congo’s Katanga Province, and oil fields in South Sudan. This web of interests is gradually drawing a reluctant China into the life of countries whose affairs it was once completely unconcerned about…” (Dyer 2014, 215-6)

36. True or False: China holds permanent observer status in the Organization of American States (OAS).

-True. China is active “in a range of organizations in [Latin America]. In 2008 China became a full member of the Inter-American Development Bank, it joined the Caribbean Development Bank in 1997, and it has held permanent observer status in the…OAS since 2004.” (Shambaugh 2013, 114-5)

-“Commerce is by far the most important dimension of China’s presence in Latin America. Trade has been growing almost exponentially, reaching $242 billion in 2011. This is a dramatic increase of more than twenty times since 2000…China is now the No. 1 trading partner of many Latin nations, having supplanted the United States. Brazil dominates regional trade with China, accounting for almost 40 percent of the total….[B]ut Latin America still accounts for only about 4 percent of China’s total foreign trade….[And] The trade is dominated by Chinese purchases of raw materials and agricultural commodities…[while] Latin countries purchase a range of manufactured goods…Large Chinese exports of textiles, footwear, and other low-end consumer goods have hit several Latin economies hard” and has impaired China’s image in Latin America. (Shambaugh 2013, 116-7)

-Like China’s “ties in Africa and the Middle East, the Latin American region represents China’s solidarity with developing countries as well as its desire to foster a multipolar world…Brazil is a key actor in both respects for Beijing…The rise to power of leftist governments in Argentina, Bolivia, Brazil, Chile, Ecuador, Nicaragua, Paraguay, and Venezuela in recent years also helped cement Beijing’s ties to the region.” (Shambaugh 2013, 113-4)

-Washington views Latin America “as its ‘backyard’ and keeps a close eye on China’s multidimensional thrust into the region. Beijing is aware of this and has gone out of its way not to establish [any kind of] military presence in the region or draw too close to certain regimes. [It] has not been directly involved in supporting insurgencies, socialist movements, or far-left-leaning governments [and it] has maintained a very low level of arms sales in the region…” (Shambaugh 2013, 119)

-“Beijing has gone out of its way not to…put itself in America’s strategic headlights in Latin America or the Middle East…This may change over time as China’s global footprint deepens…[In recent years, when] sensitive global issues arise, more and more the two governments find themselves on opposite sides or straining to find some middle ground that preserves the façade of cooperation. Libya, Syria, North Korea, and Iran are all recent cases in point.” (Shambaugh 2013, 76)

-“To some Chinese…the U.S. operates a double standard by working so hard to prevent China from exerting the same sort of influence that it enjoys in its own backyard.” (It is interesting to note that many states in Latin America “have tried to push back against Washington in just the same way that Asians are doing today against China.”) (Dyer 2014, 97)

37. What is the main driving force of the Shanghai Cooperation Organization?

-Central Asia “is not only a source of valuable energy for China, but owing to its cultural and ethnic ties to the Turkic Muslim minority living in China’s westernmost provinces, it is also of security and geostrategic interest to China. Beijing has sought to tightly integrate Central Asia into its economic orbit [as it hopes to eventually do with the Middle East]. This has also meant allying with Iran and Russia – the other key players in [Central Asia] – to limit American presence in the region. The Chinese-founded…Shanghai Cooperation Organization (SCO) – a rival to American power wrapped as a counterweight to NATO and the Gulf Cooperation Council (GCC) – reflects this approach.” (Nasr 2013, 235-6)

38. Is China currently a part of the Trans-Pacific Partnership (TPP)?

-“It is hard to make the case that the U.S. is pushing regional trade integration when” China, India and many ASEAN members are not part of the TPP process. The U.S. will need to supplement the TPP so that it “does not give the impression that it is dividing up the region.” (Dyer 2014, 128)

-“As well as the Trans-Pacific Partnership,…the U.S. is also negotiating a trade agreement with the European Union which would unite into one economic zone 40 percent of the world’s GDP. The two negotiations have a powerful theme in common: they are partly designed to take on Chinese state capitalism. The agendas of both agreements cover subjects like intellectual-property protection, generous financial subsidies, protection of foreign investment, and labor rights – precisely the areas that are becoming so contentious because of China’s model of doing business….If Washington can get enough of the most important economies in the world to sign up for this sort of trade agreement, it can effectively set standards for the way international trade is conducted that China would find very hard to overturn.” (Dyer 2014, 271)

-“China is pursuing a different path through an initiative called the Regional Comprehensive Economic Partnership (RCEP). The goals are much less ambitious: a modest reduction in tariffs on some industries…[The RCEP] seeks to lower barriers only within Asia…If the Chinese approach ends up prevailing, U.S. companies could find themselves at a big disadvantage in some of the world’s fastest-growing markets.” (Dyer 2014, 128)

-“As of June 2011 China has successfully signed [bilateral investment treaties] with 127 nations (notably missing from the list is the United States, although negotiations are under way).” (Shambaugh 2013, 176) http://www.forbes.com/sites/kenrapoza/2014/04/05/u-s-financial-service-firms-push-for-bilateral-treaty-with-china/

-“[President-elect Donald] Trump’s announcement [in late November 2016] that on his first day in office he will ‘withdraw from’ the Trans-Pacific Partnership, the huge and not-yet-ratified trade and investment deal between the Americas and Asia (but not with China), was one of the least surprising things he has done. The letters TPP have become a little more than an easily-spat curse among protectionist Republicans and Democrats, seen widely as a corporate sop that offers little to working people.”

   “Politically, walking away from the deal is almost cost-free for Americans. Economically, the United States was projected to gain only slightly in growth and jobs as a result of the deal, as was Canada. On the other hand, the people of Japan and Southeast Asian countries such as Vietnam and Malaysia were gambling their futures on it: The TPP promised to improve the lives of hundreds of millions of people in the eastern hemisphere by clearing a tariff-clogged pathway between the world’s largest economies. Without it, they are solely dependent on China.”

   “The response has been almost immediate: Days after the U.S. election, countries lept into action to make deals with China. Vietnam, Malaysia, Chile and Peru announced last week that they would turn away from the U.S.-led deal and instead work on joining China’s 16-country trade bloc, the Regional Comprehensive Economic Partnership – a less stringent pact that affects three billion people. Australia announced plans to tighten its pacts with China, Japan, India and Southeast Asia (but not the U.S.).”

   “And Beijing is preparing to step into the vacuum with an unprecedented bid to build a world economy around itself. China’s ‘One Belt, One Road’ infrastructure-investment strategy resembles nothing so much as the Marshall Plan pursued by the United States after the Second World War. Chinese-led institutions, including the newly created Infrastructure Investment Bank, have pledged to spend $1.2-trillion in 60 countries to create railway lines, oil and gas pipelines, highways and major ports to link China with central and Southeast Asia, Russia, parts of Europe, and potentially much of Africa.” http://www.theglobeandmail.com/opinion/thanks-to-trump-china-is-poised-to-dominate/article33053674/  (26 Nov. 2016)

Jeffrey Rudolph, a Montreal college professor, was the Quebec representative of the East Timor Alert Network and presented a paper on its behalf at the United Nations. He was awarded the prestigious Cheryl Rosa Teresa Doran Prize upon graduation from McGill University’s faculty of law; has worked at one of the world’s largest public accounting firms; and, has taught at McGill University. He has prepared widely-distributed quizzes on Israel-Palestine, Iran, Hamas, Terrorism, Saudi Arabia, US Inequality, the US Christian Right, Hezbollah, the Israeli Ultra-Orthodox, Qatar, and China. These quizzes are available at, https://detailedpoliticalquizzes.wordpress.com/

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