Watching the Dragon Rise │ Nguyen Quang Dy

Watching the Dragon Rise

Nguyen Quang Dy

Hanoi – What does China really want in the immediate future? At strategic level, it is so obvious in terms of Sino-US rivalry in the South China Sea (SCS). At economic and political level, however, it is less obvious as geo-political interests might be confused or compromised by economic interests and ideological orientations. For clarity, this question should be viewed in perspectives to make sense. The following are some humble comments as food for thoughts.

Keeping the US out of the SCS

In terms of strategic competition and rivalry between China and the US, the Chinese really want to keep the US out of the South China Sea, now considered their “sphere of influence” (similar to the Monroe Doctrine). Alternatively, the Chinese want to make a deal with the US to share power and interests along the line of “great power diplomacy” (G-2). But this option now seems unrealistic even when they play the North Korea card. Now that the Trump administration has adopted the new National Defense Strategy (NDS 2018) and relied on the Four-Power Pact (or “Squad”) of America-Japan-India-Australia partnership as collective counterweight, China is expected to get more serious in dealing with this new development.

Now, any US military presence and activity in the South China Sea, such as FONOP patrols near the small islands occupied by China in the U-shaped zone, would be considered violation of China’s rights and “core interests” and even acts of aggression. China may declare an ADIZ in parts of the zone (as it did in the East China Sea). As a question of principle, China neither recognizes the UN Convention on the Law of the Sea (UNCLOS) and the PCA’s rulings over disputes in the South China Sea, nor accepts multilateral negotiations with ASEAN as a bloc over regional disputes or a Code of Conduct. In fact, China keeps polarizing ASEAN (as its “divide and rule” policy) to weaken its unity as a regional bloc.

Changing Facts in the SCS

To turn the South China Sea into its own lake is China’s long-term objective. To this end, China keeps “changing facts on the ground” (with “salami-slicing” tactics) and then making it a “fait accompli” after militarizing these artificial islands as new military bases. Apart from the Paracel islands that they have occupied (since 1974), they have over the past few years intensified their efforts to militarize those islands in the Spratlys that they have occupied (since 1988), turning them into military bases with modern airfields, radar & missile installations, and naval facilities. New aerial pictures show they are near completion for actions.

Scarborough Shoal (claimed by the Philippines) is the only feature in the Spratlys that the Chinese have occupied (since 1912) and yet to be militarized. The Chinese seized this shoal after a long standoff when the US failed to challenge them. Now, this is the US’s “last red line” that the Chinese have not decided to cross, though President Duterte has decided to lean on China (instead of the US). Once China could turn Scarborough Shoal into another military base to threaten US bases in the Philippines, it would be the “tipping point”. This is an indication that the Chinese consistently follow the “salami-slicing” tactics.

Bullying & Polarizing Neighbors   

Like it or not, Vietnam is the toughest neighbor standing in the way of China’s ambition in the South China Sea as a crucial step to expedite the grand strategy of the “Maritime Silk Road” and “One belt, One road” as part of the “China dream”. As China’s next door neighbor and a fellow socialist state, Vietnam shares China’s ideological model as well as historical enmity. But China keeps bullying Vietnam, thus pushing it closer to the US. This is an unintended consequence that neither China nor Vietnam had planned in the first place.

The HD 981 standoff (May 2014) was the first major turning point, pushing Vietnam closer to the US for strategic hedging in a delicate balancing game with the two competing superpowers. The Repsol drilling crisis (July 2017) was another critical turning point, pushing Vietnam even closer to the US, culminating in the coming visit of the USS Carl Vinson and the Strike Group to Da Nang (March 5-9, 2018). China keeps polarizing not only ASEAN but also Indochina, bullying Vietnam while courting its next door neighbors Cambodia and Laos. As ASEAN is polarized, Indochina is divided by China’s “game of thrones”.

Economic & Trading Perspectives

Vietnam has come under China’s growing pressure and influence economically and politically, to give China most-favored nation deals in major projects, including the controversial Formosa Steel plant and bauxite mining concessions. These projects have become timed bombs as they are potential environmental disasters.

Many China-invested projects have been positioned in strategic locations around the country. Now, the cross-border economic cooperation model of “two states, one zone” is raising new fear of China’s “soft border” designs to change facts on the ground. Financially, Jack Ma’s Alibaba is expected to make a business invasion soon to capture the potential online payment market, while the cross-border illegal trading is still running wild, making up nearly $20 billion in trade deficit every year. These are economic realities that China may use as strangleholds to choke or checkmate Vietnam.

The Chinese government is also exploring how artificial intelligence (AI) and big data can be used to monitor social media and citizens for “social-reliability rating”. Chinese strategic thinking about “political warfare” believes an enemy’s political, social, economic institutions and the media should be targeted even before war starts.

China has been developing not only cyber capabilities but also using “soft power” for economic, social, cultural, media initiatives. Every year, the Chinese government spends some $7 billion on news media and broadcast outlets overseas. In 2017, Chinese box-office receipts registered $8.6 billion. The giant firm Dalien Wanda has invested some $10 billion in entertainment assets in the US, Europe, and Australia… Kong: Skull Island (directed by Jordan Vogt-Roberts) is an American production invested by Wanda. Other Internet and financial giants (such as Alibaba, Tencent, and China Film Group) have invested billions of dollars in US film ventures.

Chances of a Trade War

Peter Navarro is perhaps the most vocal trade hawk in the Trump administration. As a fierce critic of China, he has encouraged the president to carry out his campaign promises and take aggressive actions on trade. But administration officials remain deeply divided over exactly what Trump should decide on the aluminum and steel tariffs. Gary Cohn, H.R. McMaster and Rex Tillerson have all expressed concerns about steep tariffs. James Mattis has also raised concern about some of the Commerce Department’s recommendations, and the negative impact of such a move on key allies regarding the recommended options.

In September 2017, White House chief of staff John Kelly merged Navarro’s Office of Trade and Manufacturing Policy with the National Economic Council, requiring Navarro to report to NEC Director Gary Cohn. The move kept Navarro out of some high-level meetings on trade, and forced him to work under Gary Cohn (with whom he has disagreed). But now, the White House wants to promote Navarro as “assistant to the president for trade policy”.

The new title would ensure that he has a seat at the table for pivotal meetings on trade, and access to the daily senior staff briefings. One administration official said Trump, who likes Navarro, ordered the change, while another said John Kelly has agreed to implement it. If this is true, the Chinese may have reasons to be concerned about a possible trade war.

Cultural & Ethnic Sinicization

China has stepped up efforts to influence the political systems of other countries. New reports and investigations have raised growing concern in Australia, New Zealand, and the United States, amid signs that these Chinese efforts (or “Charm Offensive”) might lead to new debates and backlashes. In Australia, China has conducted wide-ranging influence operations, using campus organizations to monitor Chinese college students, business associations, and diplomats to supervise Chinese-language media. In the US, more than 100 universities are in partnership with the Chinese government through Confucius Institutes.

Recently, US officials, lawmakers, and academics have focused their attention on resisting these Chinese influence on campuses. As FBI has been watching and investigating some Confucius Institutes, the US intelligence community has warned about their potential spying activities. In Vietnam, apart from Confucius Institutes, thousands of Chinese nationals including workers, traders, and others, have migrated to Vietnam every year for business or settlement. As most of them are there to stay, they may eventually change the demographic nature of local community and in the process become a long-term security risk and danger.

NQD. March 01, 2018    

Recommended readings:

  1. China Doesn’t Want Confrontation in the South China Sea, James Holmes (professor at Naval War College), National interest, January 29, 2018.
  2. Can Vietnam’s Military Stand Up to China in the South China Sea? Derek Grossman (RAND Senior Defense Analyst), Asia Policy vol. 13, no. 1, January 2018.
  3. Why a South China Sea Diplomatic Breakthrough Is Unlikely: How to Respond to Beijing’s Continued Military Buildup, Gregory Poling, Foreign Affairs, January 25, 2018.
  4. Promotion would give Navarro deeper influence over trade policy, Andrew Restuccia, Politico, February 25, 2018.
  5. Waking up to China’s infiltration of American colleges, Josh Rogin, Washington Post Opinions, February 18, 2018
  6. Will China Weaponize Social Media? Kent Harrington, Project syndicate, February 5, 2018
  7. Trump’s coming hard line on China, Ely Ratner (CFR Senior Fellow, former deputy national security advisor to Vice President Joe Biden), Lowy, November 21, 2017.
  8. The Paradox of Xi’s Power, Minxin Pei (Director of the Keck Center for International and Strategic Studies at Claremont McKenna College), Project Syndicate, October 27, 2017.
  9. China vs America: Managing the Next Clash of Civilizations, Graham Allison (former director of Belfer Center, Harvard), Foreign Affairs, September-October 2017.
  10. China’s Crown Theorist:The Rise of Wang Huning, Ryan Mitchell, Foreign Affairs, December 4, 2017.
  11. China’s Influence Game Down Under, Charles Edel (Senior Fellow at the United States Studies Centre, Sydney University), American Interest, November 13, 2017.
  12. Australia and New Zealand Face China’s Influence, Joshua Kurlantzick (CFR Senior Fellow for Southeast Asia), Council on Foreign Relations, December 13, 2017.


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