Articles:
China Takes More Belligerent Stance

We are well accustomed to being rather bewildered by Chinese official statements. Although they have become more sophisticated in the past decade, very often they are still reminiscent of the era of Chairman Mao, of “paper tigers” and “running dogs”. But the closest thing to an understanding of Chinese policy in international affairs, perhaps even a cliché, has been the idea that China is following a dictum of Deng Xiaoping, their great leader of the 1980s, itself borrowed from an ancient Chinese saying: “keep a low profile and hide your claws”, he said, while focusing on building up your strength. That was a good description of Chinese policy in the 1990s and for much of this decade. But recent very loud noises from Beijing suggest it is out of date.

            The loudest noises have come in the past few days, in response to the latest American package of arms sales to Taiwan. Such sales, mandated anyway (at least in principle) by a 1979 act of Congress, always elicit a hostile reaction from China, but this time the reaction has been louder and more aggressive: not just a ritual suspension of military-to-military contacts, which has happened in the past, but also threatened sanctions against American companies, which bode ill for agreement on sanctions against Iran over that country´s nuclear-weapons programme.

            This would not raise many questions if it were not part of a pattern. The pattern can be said to have begun with China´s very tough line at the Copenhagen conference on climate change, at which it vetoed any specific promises by developing countries to cut greenhouse gas emissions, in favour of much more general and softer pledges. There, China formed the nucleus of an alliance with Brazil, India and South Africa. With those other emerging countries included, China´s position looked understandable, even reasonable, and fairly well aligned with the interests of other emerging economies. Until, that is, cyberwar broke out.

            The third confrontation between China and other countries has arisen in cyberspace. It became well-known when Google announced, last month, that it was considering quitting China because of cyberattacks on its servers and e-mail service by (allegedly) Chinese hackers. But what became clear, thanks to Google´s worldwide fame and its closeness to the American government, is that Chinese cyberwar is much wider than just an attack on Google. At least 30 American companies have been targeted, as, just as significantly, has the Indian prime minister´s office and other departments of the Indian government.

            From an Indian point of view, this represents simply an escalation of existing tensions. China has been building up its troop numbers along its disputed borders with India, and has been reacting increasingly rudely to any Indian statements about or visits to the disputed Indian state of Arunachel Pradesh, which sits between India and Tibet.

            How can we explain this apparently more belligerent policy from China? Does it represent a change of approach by the Chinese leadership? Part of the answer is that it does not: the recent cases of Chinese hostility can just be seen as a coincidence. For along with China´s policy of keeping a low international profile for the past two decades there has been a consistent extra principle: that if an issue relates to clear and strong Chinese domestic concerns, especially concerns of internal stability or of unity, then China has always fiercely rebutted any foreign criticism or attempts at interference. Sovereignty is all. Most of the recent cases fit into this pattern: Taiwan is a very hot-button domestic issue; Copenhagen and climate change raised questions of domestic policy and economic sustainability, and cyber-hacking and censorship are matters both of domestic political control and of official military and governmental initiative. In other words, hacking Google and others is sensitive, because it is being done as official Chinese government policy.

            This answer is, however, only a partial one. It explains the Chinese stance, but not the fierceness of it. And it does not explain the country´s increasingly provocative approach to India. A further possible explanation, which might explain the extraordinary noisiness, and the anti-Indian efforts, could be that China now feels strong and confident. It has survived the global economic crisis, has seen its economic growth rebound strongly and has seen both America and Europe look weakened by the crisis. So naturally it feels confident and willing to take a more assertive stance in international affairs.

            This interpretation is tempting for any American or European who feels weak and self-critical about our regions´ own power and prospects. Perhaps it is true. But I wonder. For if you look more closely at the Chinese economy, their position starts to look much less strong. Their reviving GDP growth has been bought by a huge increase in money supply and bank lending, which is bound to lead to inflation—and in fact is already doing so.  Their economy looks strong, but if its strength is to be sustained it needs to find a new model, a new source of growth, now that reliance on exports to America and Europe looks like a thing of the past. So change is needed, which may well mean a sharp change of economic policy, along with a shocking revaluation of the Chinese currency, in order to bring inflation back under control.

            Once you start to see China´s domestic economic weakness, the new noisiness and aggression of its foreign policy starts to become explicable. This is a distraction, a diversionary tactic, aimed at rallying nationalistic domestic support at a time when painful economic policy-change is needed. That is a more comfortable explanation for the West than simple Chinese confidence and assertiveness. But the consequences could be far from comfortable: more Chinese nationalism, more Chinese protectionism, less Chinese co-operation. At least until some sort of new balance has been achieved in the world economy.