The China Puzzle for the world

China’s ambitions, China’s constraints, and how the world deals with it will determine the future of the world.

China’s rise has been incredible. However, recent developments suggest that China is increasingly feeling hemmed in by Western powers. It continues to stake claim on Taiwan and has several disputes both in The South China Sea and with India along the long border.

The world has been concerned about where this is going. However, there are recent developments that suggest that much of this may never actually happen. There are several reasons. China’s spectacular growth has moderated heavily during the last decade and is now showing signs of considerable slowdown. It now looks increasingly unlikely that it will ever catch up with the United States. On the contrary, the heavily indebted country may now be entering a long period of slow growth facing the headwinds from the distortions introduced during the breakneck growth phase. The demographic cliff that China is facing adds further to this narrative.

Will China’s Naval Build-Up End US Navy's Hegemony?

 

The challenge from China to the USA, at least in its own backyard is real. However, with all its resources, it is unlikely to be able to either take Taiwan or chase away the United States and its allies. Of course, it may be emphasized that China is now very well defended and no one will be able to threaten it. The US and its allies control a large set of islands that completely block China’s access to the ocean. Should China try to take over Taiwan, the price is likely to be crippling for China (and the world).

The vulnerability of China’s energy supplies

This particular video delves deeper into how vulnerable the supply lines of the Malacca Straits is to blockades in the event of a war. China has spent the last couple of decades building supply infrastructure to bypass all this, namely through large networks with energy producers in Central Asia and Russia. While this infrastructure is substantial and effective, it will still depend on terminals of its Eastern coast for much of its supply. Apart from the western pipelines it has built a pipeline through Myanmar that bypasses Malacca and in the future could build a pipeline to supplement the road infrastructure it has built to connect to Gwadhar port in Pakistan.

What are the major territorial disputes that China has?

China has a longstanding dispute along its long border with India. It had annexed large parts of Aksai Chin in 1962 and claims Arunachal Pradesh. Things have changed significantly during the last 60 years. India annexed Sikkim in 1975 and occupied The Siachen Glacier in 1984. Since then, India has fortified its infrastructure in Ladakh, Arunachal and Sikkim. India’s economy has also grown impressively during the last 30-35 years (though not spectacularly like in the case of China). Further, India has favorable demography while China is facing a Cliff. The outlook for the Indian economy is actually very good both in the medium term and in the long run. On the other hand, China’s ally Pakistan is facing an increasingly challenging economy. It’s gone from bad to worse during the last 20 years and is increasingly looking vulnerable. Pakistan’s ability to distract India has diminished greatly.

The South China Sea is rich in marine resources and offshore oil and gas resources. While staking claim China is encroaching on the claims of every ASEAN country – Vietnam, Thailand, Philippines, to name a few. It will not be able to roll over them easily, or at all. The economies are interdependent but that cuts both ways – neither side can simply do as they please without serious consequences. Further, The USA has long standing military arrangements with Japan, Korea and Philippines.

What is the China-India Border Dispute About?

The boundary between China and India represents the longest contested border on the planet. Confrontations between the two sides have turned deadly in recent years, as China becomes increasingly aggressive in the region. Indian authors accuse China of using piecemeal territorial claims to expand its territory. Chellaney has cited the incorporation of Aksai Chin into China in a stealthy step-by-step process between 1952 and 1964 as an example of salami slicing.

Its recent aggression against India, he terms a "new dangerous phase", where China brazenly seized border areas under another country's control backed by tens of thousands of troops stationed in the rear. Tazikistan's Pamir Mountains, Mount Everest on Nepal–China border, Bhutan's eastern region which shares a border only with India are cited as more such examples.

Here’s the key point here. Although in terms of military strategy Tibet, Ladakh, and Arunachal are vital, they are all economically unviable regions and need to be subsidized. India heavily subsidizes its border regions and there is no reason to believe otherwise in case of China. Tibet land mass is about 10X what India has and the population in Tibet is also 2-3 times the combined population of Arunachal and Ladakh. As the economy hits speed-breaks, and The South China Sea face-off requires higher and higher commitment, it is going to test China’s resolve here. Even more so because the prize, a little more slice of land isn’t really worth anything economically.

The following video details what the LAC is all about.

LAC (Line of Actual Control) between India and China - Geography & major points of dispute on LAC

This is a very good account of the disputes between India and China (in Hindi).

The Indian Ocean

The Indian Ocean is where China gets severely compromised. Whereas India has open seas in all directions, it’s Andaman & Nicobar Islands archipelago controls the entry to the Malacca region. Indeed, as India builds up its navy, it is in a position to directly impact China which is already heavily compromised in the region.

Indonesia could be Asia's Most Strategic Country

Indonesia finds itself in the very centre of all this. It’s a vast country stretching across very vast areas (both land and sea). There are four major trade choke points that Indonesia directly influences and all of them are vital for the Indian Ocean – South China Sea – Pacific Ocean trade. These are Malacca Straits, Sunda Straits, Lombok Strait, Ombai Strait. Indonesia is a rising economy but is also very hard to manage, given its spread. It’s geographical position has already made it very important and this criticality will only increase. It could become a ground for big powers and it will probably need to navigate the future very carefully

The above set of videos highlight the delicate balance in the region. It’s a balance that will be seriously disturbed, should any of the actors try to be too adventurous. In a way, it’s good for the world. However, because of differential economic performances the balance could get disturbed on its own in the coming decades.