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Wednesday, January 11, 2017

Andrew Korybko -- 2017 FORECAST: CHINA

Summary

China will have to confront the Three T’s of Trump, trade, and Taiwan, as well as the progressively unfolding and American-provoked New Cold War that it’s involved in with India, but Beijing could make positive geopolitical progress so long as its New Silk Road plans in Pakistan and ASEAN aren’t derailed by Hybrid War. 

The Three T’s

Right off the bat, China will be forced to confront the incoming Trump Administration’s hard-bargaining approach towards trade and Taiwan, with both variables being intertwined with one another in order to give the Manhattan dealmaker maximum leverage for his all-encompassing negotiations with Beijing. China is accustomed to the implicit ‘gentlemen’s agreement’ that has been in play ever since the end of the Cold War, whereby the US and China occasionally criticize the trading ties between their two countries but generally refrain from taking any dramatically substantial steps to decouple their economies. Trump wants to change that, however, and it fills China with dread since it might result in an unexpected shock to its economic system. What is meant by this is that Chinese production is still heavily influenced by American investments and capital, and that if Trump creates enticing incentives for American companies to return back to their country and close up shop in China (or perhaps relocate elsewhere such to as ASEAN or India), then it might cumulatively contribute to socio-political issues inside of the People’s Republic if this is done on a large enough scale and within a short period of time. 

China’s chief challenge is to sustain its macroeconomic growth and trickle down tangible benefits to its people, though this could be partially offset to an uncertain degree if unemployment spikes as a result of the US moving out capital-intensive industries and laying off untold numbers of workers. In such a scenario, Beijing would then become even more strategically dependent on the One Belt One Road vision than ever before, as it would have to redirect the restless unemployed masses into overseas construction projects, many of which are threatened by Hybrid War and entail monumental future risks (whether of a physical, financial, and/or strategic nature). No matter, China would still prefer not to have Trump “rock the boat”, which is what he’s threatening to do so long as he carries through on his campaign promises (which he’s expected to do). In order to strike a “better deal” with China, Trump wants to compel Beijing to adjust its monetary policies in order to make them “fairer” in relation to the US. This is a highly sensitive subject for China and Trump’s transitional team of advisors are well aware of that, which explains why they’ve upped the stakes by unexpectedly introducing Taiwan and the long-standing One China policy into the equation. 
In all actuality, Trump probably isn’t interested in revising the US’ stance towards Taiwan, but he understands how pivotal of an issue this is for China and therefore sought to make it a component of the grand deal which he hopes to seal with Beijing. It’s uncertain at this point how long the prospective negotiations could take between the US and China, or if they’d even succeed and not be ruined by either side pulling out of the talks (whether public or secret) for whatever their reason might be, so it’s extremely difficult to forecast the specifics of what will be in store for American-Chinese relations. However, it’s a safe bet to assume that neither side has an interest in fundamentally upsetting the grand strategic balance between them due to the complex economic interdependence that their predecessor administrations have weaved with one another, as the consequences of an acrimonious split could be mutually disastrous in the short and possibly even medium terms. That being said, the upcoming stage of bilateral relations is completely unprecedented and could result in an unforeseeable outcome despite both sides’ well-intentioned efforts to reach a “better deal”, which is why China has legitimate reasons to fret the Three T’s all across the next four to eight years. 

The Chinese-Indian New Cold War

This trend was touched upon when speaking about the most likely scenarios for South Asia, but at this moment it’s worthwhile to elaborate on it just a little bit more. The author first came to the conclusion that this outgrowth of the global New Cold War was occurring in November 2015 when analyzing the regime change crisis that was afflicting the Maldives at that time. Although ultimately resolved in favor of the government, it followed in the footsteps of Chinese-Indian proxy tensions over Nepal, and prior to that, over Sri Lanka, both of which were explained a bit more in the previously cited Oriental Review hyperlink. Furthermore, when analyzing South Asian affairs in 2015, one couldn’t exclude Myanmar and Pakistan, with the former being between both Asian giants while the latter is solidly on the side of the Chinese. This regional proxy rivalry for influence and strategic positioning was unprecedentedly intensified in 2016 after India made the historic decision to enter into a military-strategic partnership with the US via LEMOA and the “Major Defense Partner” designation (itself a euphemism for “Major Non-NATO Ally). 
Right around the time that the first agreement was signed, India Prime Minister and Hindutva nationalist-supremacist Modi began sabre-rattling over Pakistani Balochistan and then exploited a convenient militant attack in Uri less than one month later in order to provoke tensions with Pakistan to the point of war. Ever since then, India has been confidently moving in the direction of becoming a pro-American unipolar lackey, while China and Pakistan have stayed true to the opposite course of multipolarity. The interesting part of this proxy competition, however, is that China and India are very close trading partners with one another, similar in principle (but by no means extent) to China and the US, which puts both in an uncomfortable position during times of strategic trouble. Whereas China and the US might never go to war with one another, the situation with China and its South Asian neighbor is qualitatively different because of the existence of unresolved territorial disputes stemming from their brief 1962 border war with one another. Moreover, India has been taking aggressive moves over the past year to revive 24-39 World War II-era airfields in the disputed Himalayan territory of what it calls “Arunachal Pradesh” but China says is South Tibet, thus raising the stakes tremendously and setting into motion a destabilizing security dilemma. 
China will thus have to balance India’s bellicosity with its promising economic potential as the world’s second-most-populated nation, keeping in mind that New Delhi is nominally a BRICS “partner” and at least on paper committed to bettering relations with the multipolar world. This may not be reflected in practice when it comes to India’s military moves and rhetoric over the past year, but it doesn’t mean that the South Asian giant is forever doomed to remain the unipolar-aligned state that it’s shaping out to be. After all, there is a lot more that unites China and India than separates the two and puts them at odds with one another, but what’s needed is pragmatic and rational leadership in India which ignores the US’ temptations and puts aside its own emotional knee-jerk reactions in hashing out a comprehensive and mutually beneficial partnership with China. In essence, what’s needed in Chinese-Indian relations is the type of “deal-making” which is expected to characterize Chinese-American relations under Trump, though it’s unknown how long Beijing will have to wait for a more level-headed leader to come to power in New Delhi, as the present incumbent seems hell-bent on taking relations to their worst-ever stage in order to please his new Washington master. 

The Southern Silk Roads

The final tendency which China is forecasted to exhibit is its iron-clad resolve to move forward with its three Southern Silk Road projects. The China-Pakistani Economic Corridor (CPEC) was already discussed as part of the South Asia section of this analysis, while the other two in ASEAN were mentioned in regards to that part of the world. Still, it’s necessary to speak more on these three projects in order to convey their ultra-strategic significance and explain why China is so adamant to see them succeed. CPEC is already partially operational, while the ASEAN Silk Road through Laos-Thailand-Malaysia-Singapore is only in its first initial stages in the first-mentioned country, while the Myanmar Silk Road has yet to begin any sort of construction or prerequisite serious planning. Each of these projects complement one another in that they’re supposed to be Beijing’s alternative mainland routes to the Indian Ocean, from where the People’s Republic can trade more directly with the Mideast, East Africa, and even the EU (via the Suez Canal) without having to worry about the geopolitical blackmail that the US could exert upon it through the bottlenecked Strait of Malacca chokepoint and South China Sea proxy tensions. 
It’s of the utmost strategic importance to China that the ASEAN Silk Road and its Myanmar counterpart can enter into operation sometime in the 2020s, as the successful implementation of these two projects alongside CPEC would give Beijing multiple unrestricted and heavily reliable routes to the Indian Ocean. On the reverse side, however, this means that China’s strategic future is inordinately dependent on the US’ ability to wage Hybrid War on one, some, or all of these three New Silk Roads, the scenarios of which were briefly described in previous sections. In spite of the risks involved, China essentially has no choice but to go forward with each of these projects in the hopes that at least one of them will eventually pan out and provide the necessary outlet to India’s namesake body of water. Right now CPEC is impressively succeeding, but it must still deal with joint US-Indian intrigue in Pakistani Balochistan as well as Afghan-originating terrorism, among other threats. Concerning the ASEAN Silk Road, landlocked Laos is the weak link in the mainland chain of transit states, though Thailand has many more Hybrid War scenarios that could perhaps be more easily exploited to much more ‘effective’ ends. Finally, the yet-to-be-formalized Myanmar Silk Road holds enormous promise for China, but could preemptively disrupted through a renewed round of civil war in the fragile “federalizing” country. 
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