While the world’s attention has been fixated on the current Israel-Hamas crisis in the Middle East, the ingrained US-Sino rivalry and the tensions in the Indo Pacific, Taiwan and the South China Sea have been engulfed by the bulk of the global attention. Realities on the ground with dangerous flare ups and risky manouvres by Beijing have caused deeper risks of miscalculations that will trigger a new conflict front.
The visit by Foreign Minister Wang Yi to the US is meant to pave the way for a deeper dialogue and in laying the foundation for the upcoming APEC meeting between Xi and Biden.
Upcoming Taiwan presidential election with the increasing odds of DPP candidate William Lai winning the election have further cornered Beijing’s options, worsened by the growing internal turmoil with the dismissal of top officials in the past few months, and with the new scramble to control the impact of the sudden passing away of former Premier Li Keqiang.
Beijing also intends to maintain its dominance in key flashpoints including South China Sea, as evidenced by the recent hard power intimidation on Philippines’ vessels and the dangerous manouvres by its fighter jet that nearly collided with Washington’s B-52 bomber plane, flying within 3 metres of the B-52. This adds on to the various near collision and unsafe manouvres by Chinese planes that have ratcheted tensions.
The Pentagon’s top Indo Pacific official Ely Ratner, stated that coercive and risky behaviours from Chinese pilots against US jets and assets over the South China and East seas are substantially more in volume in the past two years as compared to the entire decade before that.
Military to military communications that have been cut off by Beijing remain an area of urgency for both sides, but Washington has the moral upper hand as it has the record of pushing Beijing to resume normal and responsible military engagement and responsibilities where Beijing is now forced to bear the blame should any miscalculations occur. Overtures have been intensive from the US in the most recent months with subsequent visits by different high ranking officials, from Blinken to Raimondo and Yellen. This is complemented by other non official individuals including Gates and most recently California Governor Gavin Newsom in trying to provide a more holistic message and different channels of engagement.
All these will not change the eventual power equation, however. As part of the latest National Defense Strategy, The US has a laser focus on China as the “pacing challenge,” as part of the latest National Defense Strategy that is capable of competing with America in terms of military might, economic power and international influence.
Continuation of Deeper Power Rivalry
Beijing already enjoys numerical advantage in certain segments of hard power, including a large standing army of more than one million soldiers and having the largest navy in the world in terms of ship volume. The US remains supreme in proven hard power capacity and lethality, with far superior technology and capabilities in integrated second and third strike capacities, with ability to project and enforce power dominance in all corners of the world and especially the ability to summon capable and integrated joint capacities of numerous allies from across the world. All these remain decades, if not centuries ahead for Beijing to fully match and possess similar capabilities.
Biden has reiterated his ironclad defence commitment to Manila, which has faced intimidating behaviours from Beijing in cutting floating barriers and the collision incident.
Biden’s statement on the South China Sea was his strongest since Beijing-Manila tensions in the sea in recent times, in highlighting that Chinese vessels had acted dangerously and unlawfully when the collisions happened.The defence treaty with Manila comes close to being triggered, and Beijing is testing the limits and responses by Washington in anticipating a larger security policy response in a future Taiwan conflict.
Further provocations such as these will only increase risks of miscalculations in responses, or an outright accidental collision with US military assets which will create a new front of containment measures and further economic and technological retaliations, both of which will be at Beijing’s loss.
Beijing is cognisant that while it hopes for the new distraction for Washington in the Middle East crisis to further create new openings for itself to double down on the dominance in South China Sea and Taiwan and other influence seeking activities in other parts of the world, Beijing’s current economic and internal turmoil will require the best of goodwill and restraint in Washington’s part in its trade, technology and economic structures and policy responses.
Washington will further pile pressure on Beijing in doing more to push current allies in the Middle East, especially Iran to refrain from escalatory pushback that will trigger a full blown and widened conflict. Beijing is also caught in the nexus of the best returns from further capitalising on this new conflict opening to elevate its narrative on the West being the source of the ingrained injustice and the hypocrisy in responses in defending the rules based order as compared to the crisis in Ukraine, and in taking this from a positive perspective in creating new junctures of repairing ties and further receiving trust and goodwill from both sides.
Salvaging Dwindling Leverage of China’s Card
Wang Yi’s trip to the US is meant to balance these two, while paving the way for a deeper conciliation in the upcoming APEC Summit in San Francisco in which Xi and Biden are projected to meet.
Biden will most likely confront Xi on the fentanyl epidemic that is raging across the country, in which Xi will most likely deny responsibility again for the more than 70,000 Americans killed by the opioid crisis last year. For anybody to know that narcotics can be a huge factor in geopolitics and eventual security considerations, it is the Chinese.
The visit is overshadowed by the looming dilemma in the Middle East crisis, and the growing uncertainties in cost benefit calculations of choosing a clearer side with the Global South, regional Middle East allies, Moscow and in building on the long efforts in being seen as the viable and respected alternative solution to the Middle East in replacing the Western dominated sphere, or in breaking away from the growing pro Palestinian movements throughout the world. By choosing the latter, Beijing risks its position and influence in the Global South and the Muslim that it has so painstakingly built over the years.
The preceding visit by Australian Prime Minister Anthony Albanese further creates a consolidation of joint common efforts to strengthen the bulwark of democracy and freedom and the system of joint and interoperable security with Aukus at the epicentre of Washington-Canberra security assurance.
Biden has warned Albanese on the risks of dealing with China in his next visit to China, and further reassured the sanctity of American strength and commitment to peace, stability and the defence of democracy and freedom and the rules based order in all parts of the world, in which crises in Europe and the Middle East will not dent Washington’s resolve. From providing a counterweight to Beijing’s BRI to downright showing defiance deterrence in the South China Sea and Taiwan, Washington’s aim is to send an unequivocal message both to Beijing and allies alike that its unyielding resolve in its entrenched and steadfast cause of freedom and a rules based order is unwavering.
While Beijing will hope to have leverage on its ties with Tehran to build greater credence on its cards with Washington and in playing a role in reining in the current Israel-Hamas conflict from veering into a proxy war and the potentiality of WWIII, Beijing is also cognisant that it will be on its gains if it can play its role and prevent a direct US-Iran open conflict and confrontation, as this will impact on the price and supply of oil that Beijing is in desperate need of.
Still, opposing stances and views on Tehran by both sides remain the biggest stumbling block, and economic and supply chain security is not the only parameter at play.
While both Beijing and Washington go into next month’s APEC with a still stark difference in military and economic perspectives and understanding, Washington now can boast of handling the post pandemic recovery and weathering the global economic conditions after Covid in a much better fashion than Beijing.
Li Keqiang’s Legacy
Former Premier Li Keqiang’s passing away also carries some risks of the expansion of his legacy and popularity of his unique approach that might harm Xi’s sphere of influence. He was a bright pragmatist who was not entirely bound by ideology, cutting a lonely figure in the previous, seven-man Politburo Standing Committee, the country’s most powerful decision-making body.
The late Li remains a pragmatic and realistic individual in assessing the state of the economy and used to argue that the local GDP figures were unreliable as a way of judging economic health, and used three other indicators to analyse growth: railway cargo volume, electricity consumption and bank loan disbursements.
He also spoke about the damage which Xi’s signature zero-Covid approach was doing to the economy, and to ordinary Chinese.
Before Li stepped down in March this year, he was the last figure linked to the Hu-era and its way of doing things, seemingly at odds with Xi’s new tight grip on all aspects of leadership as compared to Hu’s collective leadership approach.
The death of former Premier Li Keqiang on Friday served as a reminder of the decline of the pro-market reformist section of the Chinese Communist Party, as Xi tightens his hands on economic control.
Beijing’s recent clampdown heightens risks to economic stability. Li has committed to market oriented reforms in structural ways and transitioning into a high growth economy, before Xi’s economic clampdown based on ideology and control created frictions and different focus models.
With the reformers’ presence diminished, Xi’s administration has further clamped down on the economic sector, reining in tech giants including Alibaba and imposing new regulations and policies on the economic and education sector.
Private businesses and also households have now increased fears of higher regulations and tightened control by the government.
Despite Xi’s efforts in the clampdown, structural problems exist in China’s systemic economic prospect. The real estate sector, which remains a vital driver in local economies, continues to slump and worsened by the Country Garden debt crisis and continuous decline of Evergrande.
The ever continuing demographic crisis with the ageing problem continues to plague existing efforts to revive the economy. Efforts to raise the retirement age to widen the labour pool have faced public pushback.
The recent IMF forecast for this month shows China’s real GDP growth slowing from 5% this year to 4.2% in 2024 and the 3% range in 2027 and beyond.
This decline further exacerbates the inequality problem that has long been a key target of the late Li. China’s income inequality continues to widen in 2022. The average disposable income per capita in the top 20% of urban households was recorded to be 6.3 times that of the bottom 20%. This is the widest gap since 1985.Li has also stated in 2020 that there were still 600 million people in China living on 1,000 yuan a month.
Although Wang Yi has tried to tout the need of an in depth dialogue and the importance of comprehensive review of ties, the ingrained distrust and mistrust remain too entangled for any party to salvage without imposing costs on the other. It remains the level and limit of compromises and sacrifices that can be tolerated at the internal public level and acceptance without infringing on regime security of both sides, and at the expense of global influence and dominance among allies, neutrals and foes alike.