Facing Reality: China’s Strategy

by George Friedman


China is the definition of dynamic. 

Until the 20th century, the regions of Tibet, Xinjiang, Manchuria and Inner Mongolia were not under the political control of the Chinese government. 

They have been or are heavily influenced by the power of others — Tibet by India, Xinjiang by Turkey, Inner Mongolia by Russia, and Manchuria by both Russia and Japan. 

These four buffer regions create security for China but also vulnerability in that they have resisted Chinese rule at various times. 

Han China, the China we think of as true China, which is found mostly along the coast, is surrounded by these regions and potential enemies and, historically, has been predisposed to dynastic and civil war.

Meanwhile, foreign powers have intruded on Han China through the Pacific, either through formal colonies (Britain, Portugal and Japan) or through informal economic pressure (the United States).



The internal pressures within Han China, the pressures from China’s neighbors and the pressures from the sea have historically kept China in a state or at the risk of fragmentation. 

The communists who forged modern China understood as much. 

Using Marxism as a political tool, the most significant outcome of the Chinese Communist Party’s victory in 1947 was the unification of China by force. 

One means of achieving that was enforcing Beijing’s will on the buffer areas, and another was isolating itself from much of the global trading system, eliminating the power of foreign nations along the coast. 

The result, of course, was poverty throughout much of the country.

And though Mao unified China at the cost of Chinese wealth, Deng Xiaoping sought to moderate isolation to decrease China’s poverty and prevent unrest. His strategy was economic. 

China’s advantage was a disciplined workforce operating at extremely low wages. 

Like the United States in the 1880s and Japan in the 1950s, Deng envisioned China using its cost advantage and discipline to compete with foreign countries by exporting goods. 

He believed that this time, through the strength of the Communist Party of China, foreign engagement would not mean fragmentation.

And he was right. 

China has retained its buffers, minimized internal tension in Han China and massively enriched itself. 

The strategic problem China now faces is whether economic growth, crucial to internal stability, can be reconciled with national unity by deflecting the pressures of foreign powers drawn in or repelled by China’s economic growth.

China’s Geopolitics

Rainfall is perhaps the most important geopolitical factor for China. 

In order to have sustained agricultural production, a minimum annual rainfall of 15 inches is necessary. 

But a substantial part of the country lacks that much rain and therefore lacks agriculture. 

The line of demarcation is called the 15-inch isohyet, which cuts modern China roughly in half. 

The line also compresses China’s population, 94 percent of which lives east of the 15-inch isohyet. 

That means about 1.3 billion people live on less than half of China’s land. 

That chunk of land must produce all of China’s domestically grown food. 

Among the 6 percent of the population living west of this line, most are Tibetans, Uyghurs, Inner Mongolians, etc. 

These are the most recently acquired regions and thus the most unstable regions over the past few years.



So China’s geopolitical problem is fairly unique. 

The acquisition of territory normally is accompanied by settlement by elements of the core population in order to bind the region to the core or to add resources. 

That wasn’t readily possible for China.

This compounded China’s vulnerability from the west. 

Foreign powers invading from this direction were one thing; poverty and attendant political instability were another. 

Hence why the communists under Mao used these regions to form a military force to overthrow the nationalists.

In fact, Mao sought to start an uprising in Shanghai in 1927 but failed.

Part of the reason for the failure was that the Chinese coastal region was the most prosperous, open as it had been to trade with Europe and the United States. 

The coastal region and the interior were fundamentally different both in their perspective of the world and the way they lived. 

The coast was cosmopolitan and integrated. 

The interior was poor and isolated.

So Mao took the long march to Yenan, in the interior, raised an army of poor peasants and over the course of about 20 years overthrew the existing regime and imposed communism. 

In a sense, the western peasants overthrew the cosmopolitan business class.



The distinction between coast and interior remains in place today. 

China has the world’s second largest GDP. 

But on a per capita basis, it ranks just 75th in the world. 

This explains much of China’s behavior, like keeping zombie companies afloat, developing the interior through the Belt and Road Initiative, and, at times, ruthlessly cracking down on opposition in the west.

China’s core geopolitical challenge is therefore economic:

1. It must generate sufficient wealth to prevent fragmentation and unrest between regions.

2. It cannot generate sufficient wealth domestically to do so.

3. So it must generate whatever GDP it can through exports.

4. It must have unrestricted access to global markets, particularly through the waters off its east 

coast. Anything that denies its access is an existential threat.

5. Chinese exports can undermine foreign economies. This can invite retaliation, economic or otherwise.

6. China must maintain control over the non-Han buffer areas in the face of internal unrest or foreign agitation.

China’s Strategy

1. China must at least maintain, if not increase, the quality of its exports. 

Ideally these would be products that could be manufactured in the poorer regions of the west to close the economic gap. 

However, the fact that many other countries are now engaged in low-wage production makes this more difficult. 

China must therefore compete in more advanced, higher-margin products, but doing so brings China into competition with industries in advanced economies that make up China’s main export markets. 

These countries in turn might react with tariffs and non-tariff barriers. 

China’s strategic imperative is to constantly balance between domestic requirements and foreign reactions, and to broaden the range of options available to it.

2. China must deal with military threats, particularly from the United States. 

The current cycle of tension began with U.S. tariffs on some Chinese products. 

Under these circumstances, Beijing had to reconsider its security in areas from Japan to the Indian Ocean. 

The danger was that the U.S. could decide to blockade Chinese ports, or close off chokepoints between the islands surrounding China, and thus block China’s access to the Pacific.

China must act under the assumption that an American threat is possible. 

One countermove is to widen the chokepoints into Chinese-controlled passages by, for example, seizing Taiwan or some other point. 

It’s a dangerous strategy, and if it fails it will leave China in an even more precarious economic and political situation. 

China must therefore try to force negotiation. 

Failing that, Beijing must search for other pressure points around the globe that could induce the U.S. to reduce its pressure on China.



3. A strategic alternative for China is to accept the U.S. threat in the South China Sea and find another route for distributing exports. 

The Belt and Road Initiative was considered for this purpose, but it suffers from several challenges, including the cost of land-based transportation and the sheer number of countries it would pass through (not to mention the poor security in many of these places). 

Chinese investment in countries to its west is used less to create such a passage than it is for building political coalitions based on investment.



4. Given the strategic difficulties facing China, Beijing must maintain control of its buffer regions, especially where an international threat might exist. 

In Tibet, China must maintain internal security and contain India. In Xinjiang, it has gone to extremes to maintain internal security and suppress dissent.

Conclusion

China is a defensive power, not an offensive one. 

Its fundamental strategic interest is to preserve the unity of Han China and to protect the country from intrusion via the strategic depth of its buffer regions and from internal opposition by a domestic-oriented military. 

Historically dangerous states such as Japan, Russia and Turkey are currently weak and not motivated to intrude. 

Therefore, the primary strategic interest of China is to prevent the United States from blocking its ocean outlets. 

All of this is driven by the need to maintain a robust economy in order to pacify Han China.

China maintains its economy by being the largest exporter in the world. 

Inasmuch as the United States is the world’s largest importer, an underlying tension exists. 

China needs access to U.S. markets without giving the U.S. equivalent access to Chinese markets. 

China must build up its domestic economy for national security reasons, but that economy is under pressure, and permitting U.S. firms to compete in China, beyond a certain limit, is unacceptable. 

This has created a military dimension in which China hopes to force the U.S. away from its ports and chokepoints and eliminate the possibility of a U.S. blockade. 

Beijing understands the possibility of a blockade is remote, but the consequences to China if the unlikely happens are too great to risk.

In other words, modern China needs to maintain Deng’s approach to economics but must achieve Mao’s outcome of a united China. 

China’s national strategy is odd in that China is a great power that must concentrate on economics — and it has been thrust into an economic and military confrontation with an important customer and major military power. 

China’s strategic goal must be to disengage from this position while preserving national unity.

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