‘Deeper’ Chinese Motivations in the South China Sea

Xinhua/Lan Hongguang

buy viagra online utah Mainstream media points to oil as the primary motivator for Chinese assertiveness in the South China Sea. While oil is certainly a compelling interest, it by no means represents the only one. According to U.S. estimates, the South China Sea contains 11 billion barrels of oil, or a fraction of one percent of the world’s reserves. Supposing China acquires the entire South China Sea resource today, explores, and develops it in a few years, and pumps the sea dry in a decade and a half, China’s annual revenues at today’s prices would be about $22 billion a year, or 0.3% of GDP. The scale of resources at stake suggests that oil is not the sole motivation driving China to adopt policies that risk provoking war with its neighbors and the United States. Indeed, when the price of oil took a nosedive in 2014, China’s assertiveness in the South China Sea increased. What deeper Chinese motivations might be at play?

http://morganspropertyadvisors.com/rural-valuations/ Academics suggest that China’s growing aggression is driven in part by considerations for domestic politics and in part by the need to assert greater power on the international stage. The first idea is that mounting economic challenges and corruption are encouraging the Chinese government to divert away domestic attention. This follows the “diversionary war” thesis, which suggests that a government facing domestic discontent resort to foreign aggression in order to unite the people and bolster its legitimacy. The second idea is that as China’s economy has grown, so too have its interests in asserting power. This follows from the “offensive realism” theory, which suggests that China’s economic miracle means it can now abandon former leader Deng Xiaoping’s axiom: “hide your strength, bide your time.”

How do these ways of thinking inform our analysis of the South China Sea? Since political interests are driving much of China’s foreign policy in the South China Sea, it would be useful to examine Chinese political trends in forecasting its future behavior. The single most significant change affecting Chinese politics today is economic, where growth is declining and debt is mounting. Chinese officials acknowledge that China’s export and debt-driven growth model is unsustainable and are attempting to rebalance the Chinese economy towards domestic consumption. The political repercussions of this economic transition almost certainly impact Chinese foreign policy in the South China Sea.

According to the diversionary war thesis, economic turmoil creates incentives for officials to channel domestic frustration into foreign aggression. This is particularly applicable to China because the Chinese government has a lot at stake when it comes to economic performance. After reforms in the late 1970s largely swept away Marxist principles, the Communist Party relied increasingly on China’s economic miracle for its legitimacy. Now that the era of unprecedented growth is waning, the Chinese government is inclined to promote nationalism and diversion through external means, and the South China Sea is an obvious target. The second, offensive realism approach leads to an opposite conclusion. Since China is entering a major and uncertain economic transition, it is reverting to an old strategy: “hide your strength, bide your time” while tinkering with the economy. The impact of China’s economic transition in the short-term therefore depends on a balance between two opposing tendencies.

A “diversionary war” outcome is less likely than a “hide your strength, bide your time” approach. China’s economic change does not rise to the level of threatening social instability, while the transition’s time scale is well-suited for biding time. China’s economy is still growing—it is only growing at a lower rate, and even at such lower rates, Chinese economic growth still outperforms all industrialized Western countries. The lower rates may reflect a short-term blip rather than a long-term trend, since the Chinese economy is in transition, which bolsters the time-biding theory. Meanwhile, the severity of economic turmoil depends on how long the economic transition takes, whether it is successful, and at what cost. Yet even in a scenario in which the economic transition comes at high social costs in terms of unemployment and financial market turbulence, the Chinese government would not necessarily have to resort to a diversionary war because it has massive and effective infrastructure prepared for addressing social unrest. Even if the Chinese government were pressured to engage in a diversionary war, it could choose to do so somewhere other than the South China Sea. A more likely alternative is the East China Sea, where a confrontation with Japan would easily harness widespread anti-Japanese sentiment and promote nationalism.

In short, besides obvious commercial interests in oil, political interests are driving much of China’s behavior in the South China Sea. The effects of these interests are changing as China enters a phase of economic rebalancing. The offensive realism effects of China’s economic rebalancing likely outweigh its diversionary war effects, so while we might anticipate a ramping up of Chinese rhetoric, we can expect its actual willingness to engage in military conflict to diminish during the course of its economic transition.