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The State of the World: Assessing China's Strategy

March 6, 2012 | 0016 GMT

By George Friedman

Simply put, China has three core strategic interests.

Paramount among them is the maintenance of domestic

security. Historically, when China involves itself in global

trade, as it did in the 19th and early 20th centuries, the

coastal region prospers, while the interior of China -- which

begins about 160 kilometers (100 miles) from the coast and

runs about 1,600 kilometers to the west -- languishes. Roughly two-thirds of all Chinese citizens currently have

household incomes lower than the average household income in Bolivia. Most of China's poor are located west of

the richer coastal region. This disparity of wealth time and again has exposed tensions between the interests of

the coast and those of the interior. After a failed rising in Shanghai in 1927, Mao Zedong exploited these tensions

by undertaking the Long March into the interior, raising a peasant army and ultimately conquering the coastal

region. He shut China off from the international trading system, leaving China more united and equal, but

extremely poor.

The current government has sought a more wealth-friendly means of achieving stability: buying popular loyalty

with mass employment. Plans for industrial expansion are implemented with little thought to markets or margins;

instead, maximum employment is the driving goal. Private savings are harnessed to finance the industrial effort,

leaving little domestic capital to purchase the output. China must export accordingly.

China's second strategic concern derives from the first. China's industrial base by design produces more than its

domestic economy can consume, so China must export goods to the rest of the world while importing raw

materials. The Chinese therefore must do everything possible to ensure international demand for their exports.

This includes a range of activities, from investing money in the economies of consumer countries to establishing

unfettered access to global sea-lanes.

The third strategic interest is in maintaining control over buffer states. The population of the historical Han

Chinese heartland is clustered in the eastern third of the country, where ample precipitation distinguishes it from

the much more dry and arid central and western thirds. China's physical security therefore depends on controlling

the four non-Han Chinese buffer states that surround it: Manchuria, Inner Mongolia, Xinjiang and Tibet. Securing

these regions means China can insulate itself from Russia to the north, any attack from the western steppes, and

any attack from India or Southeast Asia.

Controlling the buffer states provides China geographical barriers -- jungles, mountains, steppes and the Siberian

wasteland -- that are difficult to surmount and creates a defense in depth that puts any attacker at a gravedisadvantage.

Challenged Interests

Today, China faces challenges to all three of these interests.

The economic downturn in Europe and the United States, China's two main customers, has exposed Chinese

exports to increased competition and decreased appetite. Meanwhile, China has been unable to appropriately

increase domestic demand and guarantee access to global sea-lanes independent of what the U.S. Navy is

willing to allow.

Those same economic stresses also challenge China domestically. The wealthier coast depends on trade that is

now faltering, and the impoverished interior requires subsidies that are difficult to provide when economic growth

is slowing substantially.

In addition, two of China's buffer regions are in flux. Elements within Tibet and Xinjiang adamantly resist Han

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Chinese occupation. China understands that the loss of these regions could pose severe threats to China's

security, particularly if such losses would draw India north of the Himalayas or create a radical Islamic regime in

Xinjiang.

The situation in Tibet is potentially the most troubling. Outright war between India and China -- anything beyond

minor skirmishes -- is impossible so long as both are separated by the Himalayas. Neither side could logistically

sustain large-scale multi-divisional warfare in that terrain. But China and India could threaten one another if they

were to cross the Himalayas and establish a military presence on the either side of the mountain chain. For India,

the threat would emerge if Chinese forces entered Pakistan in large numbers. For China, the threat would occur iflarge numbers of Indian troops entered Tibet.

China therefore constantly postures as if it were going to send large numbers of forces into Pakistan, but in the

end, the Pakistanis have no interest in de facto Chinese occupation -- even if the occupation were directed

against India. Likewise, the Chinese are not interested in undertaking security operations in Pakistan. The Indians

have little interest in sending forces into Tibet in the event of a Tibetan revolution. For India, an independent Tibet

without Chinese forces would be interesting, but a Tibet where the Indians would have to commit significant

forces would not be. As much as the Tibetans represent a problem for China, the problem is manageable.

Tibetan insurgents might receive some minimal encouragement and support from India, but not to a degree that

would threaten Chinese control.

So long as the internal problems in Han China are manageable, so is Chinese domination of the buffer states,

albeit with some effort and some damage to China's reputation abroad.

The key for China is maintaining interior stability. If this portion of Han China destabilizes, control of the buffers

becomes impossible. Maintaining interior stability requires the transfer of resources, which in turn requires the

continued robust growth of the Chinese coastal economy to generate the capital to transfer inland. Should

exports stop flowing out and raw materials in, incomes in the interior would quickly fall to politically explosive

levels. (China today is far from revolution, but social tensions are increasing, and China must use its security

apparatus and the People's Liberation Army to control these tensions.)

Maintaining those flows is a considerable challenge. The very model of employment and market share over

profitability misallocates scores of resources and breaks the normally self-regulating link between supply and

demand. One of the more disruptive results is inflation, which alternatively raises the costs of subsidizing the

interior while eroding China's competitiveness with other low-cost global exporters.

For the Chinese, this represents a strategic challenge, a challenge that can only be countered by increasing the

profitability on Chinese economic activity. This is nearly impossible for low value-added producers. The solution is

to begin manufacturing higher value-added products (fewer shoes, more cars), but this necessitates a different

sort of work force, one with years more education and training than the average Chinese coastal inhabitant, much

less someone from the interior. It also requires direct competition with the well-established economies of Japan,

Germany and the United States. This is the strategic battleground that China must attack if it is to maintain its

stability.

A Military Component

Besides the issues with its economic model, China also faces a primarily military problem. China depends on the

high seas to survive. The configuration of the South China Sea and the East China Sea render China relatively

easy to blockade. The East China Sea is enclosed on a line from Korea to Japan to Taiwan, with a string of

islands between Japan and Taiwan. The South China Sea is even more enclosed on a line from Taiwan to the

Philippines, and from Indonesia to Singapore. Beijing's single greatest strategic concern is that the United States

would impose a blockade on China, not by positioning its 7th Fleet inside the two island barriers but outside them.

From there, the United States could compel China to send its naval forces far away from the mainland to force an

opening -- and encounter U.S. warships -- and still be able to close off China's exits.

That China does not have a navy capable of challenging the United States compounds the problem. China is still

in the process of completing its first aircraft carrier; indeed, its navy is insufficient in size and quality to challenge




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the United States. But naval hardware is not China's greatest challenge. The United States commissioned its first

aircraft carrier in 1922 and has been refining both carrier aviation and battle group tactics ever since. Developing

admirals and staffs capable of commanding carrier battle groups takes generations. Since the Chinese have

never had a carrier battle group in the first place, they have never had an admiral commanding a carrier battle

group.

China understands this problem and has chosen a different strategy to deter a U.S. naval blockade: anti-ship

missiles capable of engaging and perhaps penetrating U.S. carrier defensive systems, along with a substantial

submarine presence. The United States has no desire to engage the Chinese at all, but were this to change, theChinese response would be fraught with difficulty.

While China has a robust land-based missile system, a land-based missile system is inherently vulnerable to

strikes by cruise missiles, aircraft, unmanned aerial vehicles currently in development and other types of attack.

China's ability to fight a sustained battle is limited. Moreover, a missile strategy works only with an effective

reconnaissance capability. You cannot destroy a ship if you do not know where it is. This in turn necessitates

space-based systems able to identify U.S. ships and a tightly integrated fire-control system. That raises the

question of whether the United States has an anti-satellite capability. We would assume that it does, and if the

United States used it, it would leave China blind.

China is therefore supplementing this strategy by acquiring port access in countries in the Indian Ocean andoutside the South China Sea box. Beijing has plans to build ports in Myanmar, which is flirting with ending its

international isolation, and Pakistan. Beijing already has financed and developed port access to Gwadar in

Pakistan, Colombo and Hambantota in Sri Lanka, Chittagong in Bangladesh, and it has hopes for a deepwater

port at Sittwe, Myanmar. In order for this strategy to work, China needs transportation infrastructure linking China

to the ports. This means extensive rail and road systems. The difficulty of building this in Myanmar, for example,

should not be underestimated.

But more important, China needs to maintain political relationships that will allow it to access the ports. Pakistan

and Myanmar, for example, have a degree of instability, and China cannot assume that cooperative governments

will always be in place in such countries. In Myanmar's case, recent political openings could result in Naypyidaw's

falling out of China's sphere of influence. Building a port and roads and finding that a coup or an election has

created an anti-Chinese government is a possibility. Given that this is one of China's fundamental strategic

interests, Beijing cannot simply assume that building a port will give it unrestricted access to the port. Add to this

that roads and rail lines are easily sabotaged by guerrilla forces or destroyed by air or missile attacks.

In order for the ports on the Indian Ocean to prove useful, Beijing must be confident in its ability to control the

political situation in the host country for a long time. That sort of extended control can only be guaranteed by

having overwhelming power available to force access to the ports and the transportation system. It is important to

bear in mind that since the Communists took power, China has undertaken offensive military operations

infrequently -- and to undesirable results. Its invasion of Tibet was successful, but it was met with minimal

effective resistance. Its intervention in Korea did achieve a stalemate but at horrendous cost to the Chinese, whoendured the losses but became very cautious in the future. In 1979, China attacked Vietnam but suffered a

significant defeat. China has managed to project an image of itself as a competent military force, but in reality it

has had little experience in force projection, and that experience has not been pleasant.

Internal Security vs. Power Projection

The reason for this inexperience stems from internal security. The People's Liberation Army (PLA) is primarily

configured as a domestic security force -- a necessity because of China's history of internal tensions. It is not a

question of whether China is currently experiencing such tensions; it is a question of possibility. Prudent strategic

planning requires building forces to deal with worst-case situations. Having been designed for internal security,

the PLA is doctrinally and logistically disinclined toward offensive operations. Using a force trained for security as

a force for offensive operations leads either to defeat or very painful stalemates. And given the size of China's

potential internal issues and the challenge of occupying a country like Myanmar, let alone Pakistan, building a

secondary force of sufficient capability might not outstrip China's available manpower but would certainly outstrip

its command and logistical capabilities. The PLA was built to control China, not to project power outward, and




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strategies built around the potential need for power projection are risky at best.

It should be noted that since the 1980s the Chinese have been attempting to transfer internal security

responsibilities to the People's Armed Police, the border forces and other internal security forces that have been

expanded and trained to deal with social instability. But despite this restructuring, there remain enormous

limitations on China's ability to project military power on a scale sufficient to challenge the United States directly.

There is a disjuncture between the perception of China as a regional power and the reality. China can control its

interior, but its ability to control its neighbors through military force is limited. Indeed, the fear of a Chinese

invasion of Taiwan is unfounded. It cannot mount an amphibious assault at that distance, let alone sustain

extended combat logistically. One option China does have is surrogate guerrilla warfare in places like the

Philippines or Indonesia. The problem with such warfare is that China needs to open sea-lanes, and guerrillas --

even guerrillas armed with anti-ship missiles or mines -- can at best close them.

Political Solution

China therefore faces a significant strategic problem. China must base its national security strategy on what the

United States is capable of doing, not on what Beijing seems to want at the moment. China cannot counter the

United States at sea, and its strategy of building ports in the Indian Ocean suffers from the fact that its costs are

huge and the political conditions for access uncertain. The demands of creating a force capable of guaranteeingaccess runs counter to the security requirements inside China itself.

As long as the United States is the world's dominant naval power, China's strategy must be the political

neutralization of the United States. But Beijing must make certain that Washington does not feel so pressured

that it chooses blockade as an option. Therefore, China must present itself as an essential part of U.S. economic

life. But the United States does not necessarily see China's economic activity as beneficial, and it is unclear

whether China can maintain its unique position with the United States indefinitely. Other, cheaper alternatives are

available. China's official rhetoric and hard-line stances, designed to generate nationalist support inside the

country, might be useful politically, but they strain relations with the United States. They do not strain relations to

the point of risking military conflict, but given China's weakness, any strain is dangerous. The Chinese feel they

know how to walk the line between rhetoric and real danger with the United States. It is still a delicate balance.

There is a perception that China is a rising regional and even global power. It may be rising, but it is still far from

solving its fundamental strategic problems and further yet from challenging the United States. The tensions within

China's strategy are certainly debilitating, if not fatal. All of its options have serious weaknesses. China's real

strategy must be to avoid having to make risky strategic choices. China has been fortunate for the past 30 years

being able to avoid such decisions, but Beijing utterly lacks the tools required to reshape that environment.

Considering how much of China's world is in play right now -- Sudanese energy disputes and Myanmar's political

experimentation leap to mind -- this is essentially a policy of blind hope.


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