December 3, 2013 6:47 pm
China must not copy the Kaiser’s errors
http://www.ft.com/cms/s/0/672d7028-5b83-11e3-a2ba-00144feabdc0.html
Beijing, in its dispute with Japan, risks repeating the errors of an earlier era that led to war
Will we sustain an open global economy while also managing tensions between a rising autocracy and democracies in relative economic decline? That was the question posed by the arrival of imperial Germany as Europe’s leading economic and military power in the late 19th century. It is the question posed today by the rise of communist China. Now, as then, mistrust is high and rising. Now, as then, actions of the rising power raise risks of conflict. We know how this story ended in 1914. How will the new one end, a century later?
China’s decision to create an “East China Sea air defence identification zone” that covers uninhabited islands currently under the control of Japan (called Senkaku by Japan and Diaoyu by China) is evidently provocative: the two countries’ air defence zones now overlap. Neither Japan nor South Korea recognises the new zone, which China seems prepared to defend. The US does not recognise the zone either, and is bound by treaty to support Japan in a conflict. Yet the state department has also indicated that it “expects” US commercial aircraft to comply with Chinese demands, in order to avoid the danger to innocent lives.
The signals, then, are mixed; as usual in such situations. But, as William Fallon, a former head of US Pacific Command, has noted, the Chinese zone raises the potential for an accidental conflict. What would happen if Chinese and Japanese military aircraft were to fire on one another? What would happen if Chinese military jets were to fire on a civilian aircraft or force it down? The mixed signals from the US may even increase the risks of conflict.
As we also know from the onset of the first world war, seemingly minor events can quickly escalate to catastrophic proportions. Europe never recovered from the disasters of that war, and the even worse one it spawned 25 years later. Today, with China under the leadership of Xi Jinping, an assertive nationalist, Japan under the leadership of Shinzo Abe, a no less assertive nationalist, and the US committed by treaty to defending Japan against attack, the risk of a ruinous conflict again exists. Such an event is far from inevitable. It is not even likely. But it is not impossible and it is more likely than it was a month ago.
Again, there are parallels with the rise of Germany. In the early 20th century, that nation launched a naval arms race with the UK. In 1911, Germany sent a gunboat to Morocco in response to French intervention in that country. The aim was, in part, to test relations between France and the UK. In the event, it cemented that alliance, just as China’s action is likely to cement the alliances between Japan and South Korea, on the one hand, and the US on the other. And, as was the case for the UK then, the US of today is increasingly troubled by the challenge presented by China’s desire to assert its rising regional power.
Why would the Chinese president take such a provocative action? Since he appears to be in an increasingly powerful position inside his country, Mr Xi presumably took this decision consciously, perhaps with a view to further such actions. Yet, to the disinterested observer, the gains from control over a few uninhabited rocks are vastly outweighed by the risks to his nation, which has just embarked on complex economic reforms, is deeply embedded in the world economy and is still a long way from its goal of becoming a high-income country.
This was just the question raised by Norman Angell, the English liberal, in his 1909 book The Great Illusion . Angell did not argue, as some allege, that war among the European great powers was inconceivable. He was not that foolish. He argued instead that a war would be fruitless, even for the victors. Absorbing conquered territory would add nothing useful to the welfare of their citizenry, other perhaps than allowing them and their leaders to prance in temporary glory. Never can a prediction have proved more true: the war, when it came, damaged all the main combatant nations catastrophically.
Today, again, one wonders why the Chinese leadership thinks asserting sovereignty over a few rocks worth the risk. Yes, China may get away with it this time and the next, and the time after that. But each throw of the dice renews the risks. What gains can justify the possible losses?
Military experts assume that in a head-on conflict China would lose. While its economy has grown dramatically, it is still smaller than that of the US, let alone of the US and Japan together. Above all, the US still controls the seas. If open conflict arrived, the US could cut off the world’s trade with China. It could also sequester a good part of China’s liquid foreign assets. The economic consequences would be devastating for the world, but they would, almost certainly, be worse for China than for the US and its allies.
China is, after all, an exceptionally open great power, with a higher ratio of trade to gross domestic product than the US or Japan. Being resource poor, China depends on imports of a host of vital raw materials. While advancing rapidly in its technological skills, the country is far more dependent on foreign knowhow and inward foreign direct investment than the rest of the world is on China’s skills. A conflict could force many western and Japanese companies to pull out and go somewhere viewed as safer. Its foreign currency reserves, equal to 40 per cent of GDP are, by definition, held abroad. Much, then, would be put at risk. (See charts.)
Evidently, as Angell would tell us, risking a conflict makes no sense for China. The mutual gains from rising trade and economic interdependence are orders of magnitude greater and, one would have thought, more persuasive than those from marginal territorial gains offshore. In the same way, no gain could justify the disaster of the first world war. Yet history, alas, also teaches us that frictions between status quo and revisionist powers may well lead to conflict, however ruinous the consequences. Indeed, Thucydides, the great ancient historian, argued that the calamitous Peloponnesian war was due to the alarm that the growing power of Athens inspired in Sparta.
Nationalist ambitions and resentment over past wrongs are all too human. But this game is just too risky. For the sake of the longer-term interests of the Chinese people, Mr Xi should think again – and halt.
December 5, 2013 3:17 pm
A painful lesson in how not to deal with China
Britain apparently has nothing to say on the rising tensions in the East China Sea
David Cameron could scarcely have crouched any lower during this week’s visit to China. For his compatriots, the British prime minister’s enthusiastic self-abasement was, well, embarrassing. It did not change anything. Before Mr Cameron had boarded his flight home China’s state-controlled media was characterising Britain as an insignificant relic, of passing interest to tourists and students.
In so far as it might have served a broader purpose, the trip instead offered an excruciating example of the muddle of high-mindedness, mercantilism and subservience that often describes European responses to China’s rise. A continent mired in economic troubles is desperate to sell more to the world’s second-largest economy. But how to reconcile this with upholding a broader set of European values and interests?
Mr Cameron’s visit coincided with a dangerous escalation in tensions in the East China Sea following Beijing’s attempt to grab control of the air space above the Japanese-administered Senkaku Islands. Its recent declaration of an expansive air defence identification zone marks another turn in a ratchet designed to wrest the islands, which China calls the Diaoyu, from Tokyo’s control.
Britain, though a permanent member of the UN Security Council, apparently has nothing to say on an issue that has significantly increased the risk of conflict in the region. After some grumbling, the government agreed to sign off on a joint EU statement criticising Beijing’s unilateral action, but Mr Cameron was determined the issue should not dilute the sales pitch of the 100-odd business leaders who arrived with him in Beijing.
The prime minister seemed equally reluctant to engage his hosts on human rights, and acquiesced when one of the journalists in his party was barred from attending a press event with Li Keqiang, the Chinese premier. Last year Beijing froze high-level contacts between the two countries after Mr Cameron met the Dalai Lama, the spiritual leader of Tibet. Nothing was to be allowed to spoil this trip.
It was left to Joe Biden, who flew in as Mr Cameron departed, to talk to Xi Jinping, the Chinese president, about serious matters such as military miscalculation in the East China Sea. Publicly, the US vice-president has walked a line between criticising China for raising tensions and restraining Japan from a precipitate response. Washington, though, must be well aware that the announcement of the air defence zone is as much a challenge to US power in the western Pacific as a provocation to Japan.
Britain is not alone among European nations in leaving burdensome matters about war and peace to the Americans while pursuing mercantilist approaches to China. When Mr Li visited Angela Merkel in Berlin this year the German chancellor sought to ingratiate herself by attacking EU plans to impose duties on imports of Chinese solar panels. German officials still look sheepish when reminded of the episode. The French are also apt to put business before geopolitics when they visit Beijing.
What marked out Mr Cameron’s trip was the egregious kowtowing. William Hague, the foreign secretary, had sought a more balanced approach – respectful of China, but self-respecting of Britain’s right to voice its opinions and promote its values. He was outgunned by the prime minister’s overeagerness for an audience with Mr Xi and the anxiety of George Osborne, the chancellor of the exchequer, to give a fillip to Britain’s flagging exports.
The curious thing is that governments know in their hearts that they gain little or nothing from such tactics. German business does well in China because it makes lots of things that the Chinese want to buy. Mr Cameron says that billions of pounds worth of deals were done as a result of his visit. The reality is that British companies will prosper only in so far as they have something to offer at the right price. Beijing, as I heard one senior European official remark this week, is not in the habit of rewarding weakness.
European governments now find themselves colluding in China’s divide-and-rule approach to the continent. By promising to advantage Germany or France, Beijing worries Britain and Italy and encourages smaller eastern European states to club together to start a separate dialogue. In theory, the EU has a “strategic partnership” with China. It is an empty shell. The last thing Beijing wants is an EU that speaks with one voice. Such a Europe might run ahead of itself.
Mr Cameron’s trip paid homage to a view that there is nothing much European governments can do in east Asia save serve as marketing managers for their domestic businesses. They have neither the diplomatic weight nor the military heft to make an impression in the region. Best leave the heavy lifting to the Americans.
This approach ignores Europe’s fundamental interests – strategic and commercial – in helping to shape the nature of China’s rise. One path sees an assertive Beijing heading for an unavoidable clash with its neighbours and with the US. Another imagines a China that, for all its determination to gain acceptance as a great power, recognises its interests are best served by agreeing
co-operative security arrangements.
co-operative security arrangements.
Europe should have something to say about this choice. It remains one of the world’s richest, most powerful regions. It also has plenty of painful experience of what can happen when a rising power disturbs the status quo. Mr Cameron in future would do best to leave the globetrotting to his foreign secretary.
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