By Keith B. Richburg,
BEIJING — Beijing’s Communist rulers plan to boost military spending by 11 percent this year, passing the $100 billion mark for the first time and renewing questions about China’s long-term intentions.
The new spending plan comes as China’s neighbors are unnerved by the country’s growing assertiveness in pressing territorial claims and as the Obama administration has announced a strategic “pivot” to the Asia-Pacific region.
The new defense spending plans, outlined at the start of the annual session of China’s largely rubber-stamp legislature, would bring China’s official military budget to 670 billion yuan. That would be the equivalent of $106 billion at the current exchange rate of 6.3 renminbi to the dollar. That amounts to an increase of $10.6 billion over 2011.
Defense analysts outside of China say the real outlay on defense could be considerably higher, when other areas, such as spending on outer space, are included.
The People’s Liberation Army has seen years of double-digit budget increases, which have helped transform China’s military into a force now capable of projecting power throughout the region and, increasingly, to faraway conflict zones such as the Somali coast, where pirates have harassed Chinese vessels and crews.
China has also embarked on a program to build and acquire more sophisticated, modern weaponry, including a new home-built J-20 stealth fighter jet, which made a test flight last year, and China’s first aircraft carrier, a refurbished, unfinished Soviet-era vessel purchased in 1998 from Ukraine.
The defense budget for 2011 was $91.5 billion, which was a 12.7 percent increase over the 2010 budget of $78 billion.
Li Zhaoxing, the spokesman for China’s legislature, known as the National People’s Congress, deflected a reporter’s questions about the need for the large increase in military spending. He said that “China is committed to the path of peaceful development” and “follows a defense policy that is peaceful in nature.”
Li said that China’s defense spending as a share of its gross domestic product was 1.28 percent in 2011 and that the military budgets of countries such as the United States and the United Kingdom exceeded 2 percent of GDP. However, some outside sources, such as the Stockholm International Peace Research Institute, put China’s actual military spending as a percentage of GDP at higher than 2 percent. Most outside analysts use a broader view of defense spending and include such areas as space activities.
Some analysts have projected that by 2015, China’s military spending will surpass that of all 12 of its Asia-Pacific neighbors.
That kind of spending is causing jitters in the region, particularly as China has become increasingly assertive over long-standing territorial claims. In the oil-rich South China Sea, China is involved in a dispute over a small island chain also claimed by the Philippines, Vietnam, Malaysia and Brunei.
Relations between China and Japan soured after a 2010 incident involving a Chinese fishing boat captain who rammed a Japanese patrol boat in waters around islands — called Senkaku by Japan and Diaoyu by China — also claimed by both sides.
China and India are also involved in a long-running border dispute involving Arunachal Pradesh, which China refers to as Southern Tibet.
Several regional countries, including India, Indonesia and Vietnam, have begun increasing their military capabilities in response to China’s increased military spending and growing assertiveness. Some longtime U.S. allies, such as the Philippines, have appealed for a stronger American presence in the region.
Researcher Zhang Jie contributed to this report.
U.S.-China Competition in Asia: Legacies Help America
Asia Pacific Bulletin, No. 147
Washington, DC: East-West Center in Washington
Publication Date: February 1, 2012
Prof. Robert Sutter, Elliot School of International Affairs, George Washington University offers another perspective on US-China competition. He is of the view that the US could use its non-government channels or contacts to manage the emerging power shift. Undoubtedly, it is a US centric view as he believes that the US has an edge over China in this regard. But does China really lack such non-governmental contacts? Hardly. Unless we ignore the vast Chinese diaspora in the region. The diaspora network should not be underestimated. The full report can be accessed from the East West Center.
Ernest Bower’s omission of the East Asia Summit (EAS) in his testimony “China‘s activities in Southeast Asia and its implication for US interests” is interesting. Given the fact that the United States was recently admitted into the EAS at a much publicized summit in Bali last November, ignoring the EAS is almost like not noticing the gorilla in the room. Is there something more to it? Is it a signal that there could be a change of mind in the US regrading the EAS. Anita Prakash in her article asked ” Will the US commit long term to the East Asia summit?” As 2012 is an election year, the attendance of the US President at the East Asia summit in Phnom Penh is uncertain. It is interesting to speculate that a change of mind could be underway in the US to ignore the EAS to let it “wither on the vine”.
Ernest Bower, Senior Adviser & Director of the Southeast Asia Program, testified before the U.S.-China Economic & Security Review Commission yesterday 4th February 2012. The main thrust of the briefing are:
Over the last 15 years through its expanding trade, investment, tourism and cultural ties, China has transformed its image from an ideological and security threat to an engaged and interested partner. In addition, China maintains a continued presence through its cooperation with ASEAN, Free Trade Agreements, aid and other forms of engagement. According to Ernest Bower, the US, despite having a longer and much established presence through trade, investment, aid as well as security presence, doesn’t appear to have a strategy whereas the China appears to be pursuing its own “Monroe Doctrine” to carve the region as its sphere of influence.
As such he recommends a multi-pronged and clarified US strategy towards ASEAN. This would include focusing on trade and investment, strengthening its existing treaty alliances, building on the ASEAN Regional Forum (ARF), joining new partnerships such as the Trans Pacific Partnership (TPP) and developing new and privileged relationships with selected members of ASEAN.
I find two main problems with Bower’s testimony. The first and most glaring is the absence of the mention of the East Asia Summit (EAS). This omission is indeed puzzling particularly as the US recently joined the EAS in the much publicized EAS Summit in Bali last November. It is also strange because within ASEAN, there is an acceptance that the EAS would guide the strategic features of the regional architecture.
The other problem relates to his assertion that the ASEAN members are guided by a perspective of balancing between the US and China. This is the opposite of bandwagoning, the other IR theory that explains how states seek to manage the power asymmetry that arises out of the policies and actions of major powers. However neither theory explains ASEAN’s strategies satisfactorily. The failure of these theories is partly due to ASEAN’s politically heterogeneous nature. As such, the most sensible option for ASEAN is to employ a mix of strategies that would satisfy its members.
Bandwagoning strategies are in fact the building blocks of ASEAN’s DNA which finds expression in its diplomatic instruments such as the Treaty of Amity and Cooperation (TAC), Zone of Peace, Freedom and Neutrality (ZOPFAN) and the Southeast Asian Nuclear Weapons-Free Zone (SEANWFZ). However rather than using these instruments to balance or bandwagon with the major powers or as a wall to shield itself from them, ASEAN believes that the best strategy is to deal with the major powers on an equal basis so as to allow them to pursue their legitimate strategies in an orderly manner and thus encourage an orderly major power relationship.
By Ernest Z. Bower, Center for Strategic and International Studies
Feb 3, 2012
Over the past two weeks, U.S. defense secretary Leon Panetta and his key officers, including Admiral Robert F. Willard, commander of U.S. Pacific Command, have actively explained details of President Barack Obama’s January 5 announcement about the new defense budget and its implications for the Asia Pacific. Southeast Asian counterparts want to clearly understand U.S. intentions so they can calibrate China’s response and be able to translate joint plans with the United States into their domestic political discourse.
As the United States takes steps to fulfill Obama’s promise of a policy “pivot” toward Asia, U.S. policymakers should invest ample time briefing colleagues throughout the Asia-Pacific region regarding U.S. intentions. In so doing, it will be vital to point out that the enhanced U.S. presence in the region is part of a comprehensive strategy that includes robust economic and political engagement. In other words, the United States must be clear that its Asia-Pacific strategy is not a security-dominated approach but instead a broad and long-term commitment. The United States is reemphasizing long-standing security and economic commitments to the region and adding new political focus.
Balance Is Key
Balance is the most important ingredient in this recipe. If Asian countries are not convinced that the United States intends to step up its game in terms of economic competitiveness, they will not embrace the security aspect of the “pivot.” Specific actions in this regard are important and include the following: continued progress and leader-level focus on trade, specifically the Trans-Pacific Partnership (TPP) negotiations; talking to Americans about the contribution of Asian trade to U.S. economic recovery and long-term growth; welcoming investment from Asia; demonstrating a willingness to table economic and financial issues at the East Asia Summit (EAS); and organizing presidential- and/or cabinet-level business missions by U.S. CEOs to the region. Understanding these linkages and broadening the talking points of senior U.S. officials is important and should become a mantra supported by actions.
Reassure on China
Southeast Asia needs the United States to be clear about its intentions. It needs to understand that the U.S. endgame is to have good relations with China. An effective and sustainable grand strategy for the United States should aim to convince China that it can meet its energy, food, and water security goals and expand its economic might within regional security and trade frameworks.
The region is anxious because it does not know what China wants. It does not know how China will define itself in the coming decades. Economic power and growth are welcome, but using that new muscle to try to define sovereignty in disputed regions such as the South China Sea, China-India border, and elsewhere has raised alarm among China’s neighbors. Looking ahead to this year’s Chinese leadership transition, even the best China experts cannot say for sure which elements will define the country’s new posture in 2013 and beyond.
Paradoxically, while Southeast Asia’s uncertainty about China has motivated countries to encourage a more proactive U.S. role in the region, it also heightens Southeast Asian concerns that U.S. reengagement not be construed as trying to contain or oppose China.
Southeast Asia is now convinced that the United States is not in a spiraling economic decline: signs of recovery have encouraged leaders and policymakers that the U.S. model continues to work and produce results. On the other hand, fear of a U.S.–China condominium, or “G-2,” has also been put to rest. The United States and China have normalized and stabilized relations, but they are clearly not yet aligned on a preponderance of global issues. What no one in Southeast Asia wants is direct competition in a nouveau Cold War between the United States and China. Fortunately, both Beijing and Washington seem to agree on that point.
Rotations, Not Bases
Straight talk and following through on what is said is tactically the winning formula for the United States. Strategically, the United States must continue to deepen its relationships around Asia. It has to listen to and understand what traditional and new partners want and need. That posture is being reflected in the new defense approach in Asia. Admiral Willard has said that the focus is on “rotations, not bases,” signifying a lighter but likely more omnipresent footprint for the United States in Asia.
That is a smart and sustainable approach if executed well and consistently. Asia will likely see a new U.S. presence “inside the horizon” in the next decades—sharing facilities, emphasizing interoperability, conducting joint exercises, and, importantly, providing public goods such as humanitarian assistance and disaster relief. Expect this effort not only to include treaty allies such as Australia, the Philippines, and Japan, but to expand to Singapore, Malaysia, Vietnam, and possibly Indonesia in the future.
The end goal is to engage China in these efforts. A significant benchmark would be to see China accept the invitation that has been tabled several times in the past to participate in regional exercises such as Cobra Gold. Building trust and expanding relationships with China’s military is a long-term goal for the United States. Doing so will put our partners in Southeast Asia at ease and provide a possible double dividend of peace and prosperity in the world’s most dynamic region.
© 2012 by the Center for Strategic and International Studies. All rights reserved.
4 February 2012
Beijing seems to be doubling down in the South China Sea. Why? In large part it’s to secure access to potential deep sea hydrocarbons like oil and natural gas – many describe the South China Sea as the next Persian Gulf, given the possible richness of resources that supposedly lay beneath the seabed. And while there are significant differences between the two regions that complicate such a comparison – including the ease of access to fossil fuel resources and the cost of developing them – it’s a useful analogue for understanding why China views the region as critical to its core interests.
But Beijing may in fact be overestimating the strategic significance of the region’s oil and natural gas – and taking unnecessary risks that could undermine its peaceful rise.
China’s voracious appetite for energy to feed its continued economic development will become increasingly important as the state continues its transition into an industrial powerhouse. In 2009, China just barely overtook the United States as the largest consumer of energy in the world; by 2025, its energy consumption is projected to eclipse the United States by nearly 50 percent. In order to secure access to the energy resources it needs to fuel its economy, Beijing is developing a broad range of energy sources, including investments in solar technology and hydroelectric development. Yet conventional fossil fuels, China is betting, are likely to remain dominant.
As a result, Beijing is developing a robust portfolio of fossil fuel resources from a variety of locations, including the Middle East, Central Asia and the South China Sea, in an effort to reduce its vulnerability from any one source. Middle East oil must transit through the Strait of Malacca, which, as Beijing is acutely aware, poses a strategic vulnerability should any state choose to compromise the sea lines of communications by blocking the strait. Beijing’s investment in a vast infrastructure of overland energy pipelines from Central Asia means oil must cross volatile transit states like Burma and Pakistan and is delivered to western China where Beijing’s influence waxes and wanes. Consequently, Beijing is eying the South China Sea as a safer way to ensure access to the energy its needs to thrive.
Yet Beijing’s plan may be flawed. Estimates vary widely as to the size of the hydrocarbon reserves beneath the sea floor. The U.S. Geological Survey calculates that there may be roughly 28 billion barrels of oil – enough to feed global oil consumption for about 11 months according to 2009 statistics. The Chinese government, meanwhile, estimates that the South China Sea region contains nearly 200 billion barrels of oil, or enough to meet global oil consumption for more than 6.5 years. Analysts tend to agree that China’s estimates are wildly optimistic. These disparate estimates need to be resolved, yet recent efforts to survey fossil fuels reserves by states like Vietnam have been stalled by the China Maritime Safety Administration, which has taken to cutting survey cables of vessels chartered to provide better information.
Moreover, Beijing’s bet that fossil fuels will remain the dominant energy source seems to ignore developments in energy technology and the broader energy market. Indeed, the once-single energy source transportation sector, which accounts for about 60 percent of oil consumption in OECD countries, is now being diversified by electric vehicles as well as serious research and development of second-generation liquid biofuels derived from feedstock like algae that can displace the demand for oil.
However, serious research and development of second-generation liquid biofuels derived from feedstock like algae that can displace the demand for oil. Indeed, the scaling up of alternative fuels will alter the strategic value of whatever resources lie beneath the South China Sea floor as they reach price parity with conventional fossil fuels. Experts contend that if production continues apace, these alternative fuels may be commercially available and at price parity with petroleum in a decade.
What is more, not all oil is created equal, at least as far as cost is concerned. Some analysts project that the price of a barrel of oil from deep water wells could be as much as four times that of a barrel produced from conventional reserves like those in the Middle East. Thus the cost of extracting South China Sea oil could be much more expensive than fuels derived from algae, other biomass or even dirtier sources like coal and natural gas, making deep-seabed oil less strategically important than those other sources.
Whether those hydrocarbon resources in the South China Sea are strategically important or not, the perception in Beijing seems to be that they are vital. It’s no surprise, then, that China has taken an increasingly zero-sum approach to securing access to those resources, becoming more aggressive with neighbors that it suspects are trying to exploit oil and natural gas on their own. In that light, even Beijing’s push for joint development could be taken as an effort to slow roll other countries’ efforts while its own Chinese National Offshore Oil Company gets the edge in developing those resources first.
But Beijing’s efforts could all be for naught if energy trends continue to develop as projected, and especially if the South China Sea turns up dry (so to speak). As a result, China’s continued assertiveness in the South China Sea could compromise its claim to a peaceful rise and reinforce the call from countries like Vietnam and the Philippines for the United States to step up its military presence in the region.
Perhaps the most important step the United States can take in the near term to diffuse tensions in the region is to promote the message that those energy resources aren’t as valuable as Beijing believes. At the same time, the United States should encourage Southeast Asian countries to lead a multilateral effort through partnerships like the Asia-Pacific Economic Cooperation to survey fossil fuel resources, putting to bed once and for all the uncertainty around how much oil and natural gas really lies beneath the ocean floor. Maybe then Beijing will realize that its bet in the South China Sea is one it can’t afford to make.
Will Rogers is a research associate at the Center for a New American Security, a non-partisan national security and defense policy research institution in Washington, DC, where he studies the intersection of natural resources and national security policy.