Simply put, China has three core strategic interests.
First 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 century, the coastal region prospers, while the interior of China — which begins about 100 miles from the coast and runs about 1,000 miles to the west – remains poor. Roughly 80 percent 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 difference of wealth 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 finally 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 looked for 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 used to finance the industrial effort, leaving little domestic capital to purchase the output. China must export to grow.
China’s second strategic concern is related tothe 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 safe access to global sea-lanes.
The third strategic interest is in maintaining control over buffer states. The population of the historic Han Chinese heartland is in the eastern third of the country, where enough 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 overcome and creates a defense in depth that puts any attacker at a grave disadvantage.
Today, China faces challenges on 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 demand. Meanwhile, China has been unable to 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 declining, and the poor interior requires subsidies that are difficult to provide when economic growth is slowing substantially.
In addition, two of China’s buffer regions are unstable. Elements within Tibet and Xinjiang resist Han 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 likely the most troubling. Outright war between India and China is impossible so long as both are separated by the Himalayas. Neither side could support 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 if large numbers of Indian troops entered Tibet.
China acts as if it were going to send large numbers of forces into Pakistan, but in the end, the Pakistanis have no interest in Chinese occupation — even if the occupation were directed against India. The Chinese likewise 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.
The key for China is maintaining interior stability. If this part of Han China becomes unstable, control of the buffers becomes impossible. Maintaining interior stability requires the transfer of resources, which in turn requires continued strong 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.
Maintaining those flows is a considerable challenge. The very model of choosing employment and market share instead of profitability wastes many 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 met 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 requires a different sort of work force, one with years more education and training than the average Chinese coastal inhabitant, or even worse, 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
China also faces a primarily military problem. China depends on the high seas to survive. The position of the South China Sea and the East China Sea make 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 force China to send its naval forces far away from the mainland to force an opening — and fight U.S. warships — and still be able to close off China’s exits.
China is still in the process of completing its first aircraft carrier; indeed, its navy is too small in size and quality to challenge 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, the Chinese response would have great difficulty.
Internal Security vs. World Power
The People’s Liberation Army (PLA) is primarily set up 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 not prepared for offensive operations. Using a force trained for security as a force for offensive operations leads either to defeat or very painful stalemates. The PLA was built to control China, not to project power outward, and strategies built around the potential need for power projection are risky at best.
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.
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. 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 helpful, and it is unclear whether China can maintain its unique position with the United States indefinitely. Other, cheaper alternatives are available. China’s official propaganda — designed to generate nationalist support inside the country — might be useful politically, but may strain relations with the United States. Chinese leaders feel they know how to walk the line between propaganda and real danger with the United States. It is still a delicate balance.
China may be a rising power 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 harmful, 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.