by Bill Bradley
The Chinese are strategic thinkers above all else. They’re able to decide on a long-term policy and follow it. For thirty years, the Chinese have said that their first priority was developing their own country, not seeking military conquest of their neighbors. They want to move people out of poverty. They want to raise the country’s living standard. They want to amass wealth. In order to do that, given their 1.3 billion people and limited natural resources, they need to influence events outside China without resorting to military aggression.
Just a few examples of how China’s strategic thinking translates into action: They intend to build three high-speed rail lines to the west. The first line will go southwest from China to Singapore. The next will go through Central Asia to Turkey and then to London (a modern version of the ancient silk route), and the last will go across Russia to Moscow and on to Berlin. These projects will cost billions of dollars and take decades to complete. When finished, they will also give China access to the natural resources of Central Asia, Siberia, and Southeast Asia.7 Meanwhile, in the United States, we can’t even finish the rail line from Dulles International airport to downtown Washington, DC.
Another example of China’s long view is its aim to dominate its neighbors through the management of water resources. China needs electricity, and hydropower is one of the best renewable energy sources. The Chinese government intends to build several giant dam projects in addition to the one at Three Gorges. The strategic implications arise because they will build the dams on rivers that flow into India and Southeast Asia. By controlling the headwaters of the Brahmaputra, Irrawaddy, and Mekong, they will have leverage over countries whose economic welfare depends on those rivers. So, from within their own country and in a way that improves their own economy, they are establishing themselves as the regional hegemon.
Yet another example of farsightedness is what China is planning in the vicinity of the United States: They trade more than ever with Brazil and Venezuela, and they have suggested to Colombia that they help finance the construction of a rail line between the country’s Pacific and Caribbean coasts. Such a route will be an alternate to the Panama Canal, which itself is being widened to accept larger container ships. We have known about this widening of the Panama Canal for a decade, but Norfolk, Virginia, is still the only Atlantic port in the United States large enough to accept the new container ships that will transit it. Meanwhile, China has acted. Li Ka-shing, the wealthiest man in Hong Kong, has built a giant port in the Bahamas that can accept the new ships. The port will offload cargo for transport to American ports that can accommodate only the smaller container ships. The Chinese building of ports doesn’t stop in North America. They have built a port in Gwadar, Pakistan, which has given them their first listening post on the Indian Ocean, close to the oil routes of the Persian Gulf. In addition, they are building or upgrading ports for governments in Burma, Bangladesh, and Sri Lanka.
China is even active in the North Atlantic. Last summer, Huang Nubo, one of the richest Chinese real-estate tycoons, offered to buy three hundred square kilometers of Iceland. When he was asked why he needed such a vast tract of land, he said that he wanted to build a resort. Iceland, a non–EU sovereign country between Europe and America, will have a much larger role to play in a world where the warming of the planet will make hundreds of thousands of its acres usable. It will also be a transit point in Asian-Atlantic trade using a new polar shipping route. The Icelandic government said no to the investment.
The Chinese are locking up resources—oil, minerals, agriculture—all over the world, from Africa to South America to Australia. They even showed up in my small hometown on the Mississippi in search of iron ore and a port from which they could export the smelted pellets. You can gauge the magnitude of their effort by looking at Western Australia. There’s such a shortage of labor for the region’s iron, coal, and gold mines that companies pay heavy-machinery operators as much as $220,000 per year.8 Every morning at 4:45 a.m. at the Perth airport, hundreds of workers appear at a labor exchange and offer their services to the highest bidder. Planeloads of workers dressed in yellow mine uniforms disembark after two weeks in the mines and another group of similarly clad miners boards the planes for the next two-week shift.9 Chinese demand has created the boom.
A final example of China’s strategic thinking relates to its long-term economic aspirations. China has long been a cheap labor country, but in 2007, the 17th Congress of the Communist Party affirmed its intent to develop the nation’s high-tech sector. China has often required foreign companies in some industries that locate in China to take a Chinese partner. It has ratcheted up the pressure on the high-tech companies to transfer technology to these joint ventures. Reverse engineering and other forms of appropriation then allow wholly owned Chinese companies to compete with those foreign companies on international markets. According to the German Engineering Federation, nearly two thirds of German machine-building companies suffer piracy of products and trademarks, resulting in €6.4 billion in lost revenues, with China being responsible for 80 percent of those losses.10
Everything China learns from their foreign partners moves them up the value chain to higher-paying jobs. With more than 6 million college graduates a year (up from 1 million a decade ago), China needs higher-paying jobs, so it is building advanced industries such as aviation, high-speed rail, sophisticated telecommunications, and oceanographic and space exploration. It allocated $19 billion in a multiyear grant for nanotechnology in its 2009 stimulus package (total U.S. spending on nanotechnology by government, venture capital, and the private sector is $6 billion). In 2011, China became the world’s largest energy user and has tripled its patent filings in the last five years, growing a remarkable 56 percent in 2010 alone. It even offers gold-plated salaries to star foreign researchers to come and work in China. The aim is to steadily produce world-class economic players across industries and globally. Sany, a Chinese machinery group that produces everything from mobile cranes to excavators, has grown 50 percent per year ever since its founding seventeen years ago, with revenues in 2009 of $4.5 billion. After years of partnership with German companies in China, Sany in 2010 launched a production facility in Germany, competing in terms of price and quality with one of Germany’s cherished industries on its own turf. In 2012, global German machinery sales dropped 23 percent, to €178 billion, while the Chinese machinery industry sales rose 12 percent, to €300 billion. Germany is no longer number one in machinery.11
While China has been busy enhancing its national power for generations to come, the United States has been engaged in two wealth-sapping wars. We have poured our treasure into the desert sands. The predominant press and policy attention of the last decade has been focused on the Middle East. While we have endless debates about promoting democracy, getting reluctant countries to the negotiating table, winning hearts and minds, defining and redefining what is a strategic interest, the Chinese have been laying the groundwork for economic dominance in the twenty-first century, and they are doing it without firing a shot. A Chinese official once asked me, “Why are you Americans so interested in all those small countries?”
The front page of the New York Times on October 29, 2011 had two stories side-by-side that illustrated our relative positions in the world. The headline on the China story read, “China Is Asked for Investment In Euro Rescue.” It described European government officials imploring the Chinese to buy bonds in the new euro bailout fund. The Chinese predicated any investment on strong conditions, such as getting Europe’s support for recognizing China as a market economy in the World Trade Organization—which would essentially make it harder to level trade sanctions against China. The story confirmed that China is using its strong export trade economy, vast currency reserves, and large market to play a global power game. Right next to this story was a headline that read, “Western Companies See Prospects for Business in Libya.” While China increasingly calls the shots in a new global economy, we pick over the bones of our latest military adv
enture in the Middle East.
On September 4, 1989, Deng Xiaoping offered seven guidelines culled from China’s history to direct its future: “Observe calmly, secure our own position, cope with affairs calmly, hide our capacities and bide our time, be good at maintaining a low profile, never claim leadership, and seize the opportunity to make a difference.”12 China is methodically following Deng’s strategy, to secure its advantage in sector after sector, country after country.
The challenge in Chinese martial arts is to change movements continuously in order to overcome an opponent with skill, rather than brute force. The I Ching tells a leader to be modest and rule by example rather than by fear or diktat. The Chinese seem to have applied these approaches in their relations with the world. We don’t have a clue how to play their game. They’re all about subtle strategy that leads to dominance. We’re all about tactics that lead to destruction. We see our defense in terms of global power projection. They see theirs in terms of cyberpower and other assymetric security strategies that can disable the war-fighting capabilities of any would-be invader. Our approach is very expensive; theirs is much cheaper. While we’re busy defeating ourselves by our braggadocio, impatience, and desire to lead like a general on a white horse parading before the applauding crowd, the Chinese ruling elite engage in a three-year, comprehensive debate about the role that China wants to play in the world. While 40 million Americans watch American Idol, 100 million Chinese are watching a twelve-part series of hour-long TV programs on The Rise and Fall of Nations.
China’s game plan is there in its history—all we have to do is read it. The ancient Chinese Empire sought to enrich others so it could enrich itself more. The goal is incompatible with traditional notions of war. We invade Afghanistan, and the Chinese buy up one of the world’s great mining tracts there. We fight the Taliban to create democracy, but the Indians build the Afghani Parliament building. We wage a war in Iraq to kill a dictator and bring freedom to the Iraqis, and the oil companies of other nations get large oil concessions. When President Obama puts troops in Australia, the Chinese shrug; they know that they can get the mineral resources of Australia for China (which is all they really want) with economic power, because Australia finds such deals are in its interests too. The Chinese don’t do press releases; they just steadily advance their position.
The real irony is that if we understood how to play the game, we could enhance the power of our own country. What is required to secure our future is skill at paradoxical thinking—that is, China simultaneously can be our greatest ally in creating a better world and our most formidable rival. As F. Scott Fitzgerald wrote, “The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function.” Instead of racketing around the world like some stereotype of a warrior king, we need to find the quiet center of our ideals and lead from there. We need to make change our friend and the development of our own country our number-one objective. In such a world, as the possibility of Chinese purchases of $1.2 trillion in U.S. infrastructure bonds illustrates, there is no reason that the United States and China could not be the best of partners, even cooperating to ameliorate global problems, such as climate change or poverty.
The pressure we should bring on China is for them to follow international norms on intellectual property and state subsidies, to say nothing of the rule of law. China is in transition from a relationship-based society, which is inherently corrupt and inefficient, to a society based on rules that in China’s future will be necessary to deal with everything from governance of foreign investment to structuring of a national healthcare system to management of scarce resources. The current endemic lawlessness and official corruption were caught by a friend of mine who recently wrote from Beijing, “A country where people can’t trust what they eat, the trains they ride, or the products they buy, can’t secure a stable future.” Chinese leaders are acutely aware of those problems and confront them daily. They also often protest international rules such as the accounting and governance requirements of the New York Stock Exchange or the maritime treaties of the 1860s, but when they agree to join a part of the international system, we have to hold them accountable for abiding by the rules of that system. If we believe they have violated provisions of the WTO, we should use the organization’s dispute-settlement mechanism to make our case. That’s what it means to have an international system that works. Disagreements will be inevitable. Resolving them with a minimum of chest-thumping will serve all parties.
When certain Chinese officials claim that the South China Sea is a core interest of China’s, along with Tibet and Taiwan, some Americans conclude that the comment represents national policy. It is as though every Congressman’s utterance were to be taken as national policy. In fact, a phalanx of Chinese generals, diplomats, and academics has said that it is not national policy.13 China is prepared to negotiate its territorial claims in the South China Sea; the only question relates to whether the negotiation will be multilateral or bilateral. Their claims to Tibet and Taiwan are non-negotiable. The real danger zone in Asia is the East China Sea, the body of water that separates China from its longtime Asian rival Japan. A miscalculation there by either side could lead to a military conflict fueled by intense nationalism in both countries.
As for espionage, we should be realistic, not emotional. Blocking Chinese espionage is not war, any more than is our spying on them. The intelligence craft has been a part of international life from time immemorial. When someone waxes indignant about it, I recall the classic line in Casablanca: “I am shocked—shocked—to find that gambling is going on in here!” Yet Chinese espionage has taken on a new form and risen to a new level. We need to be aware of the nature and breadth of hacking efforts coming out of China and take appropriate countermeasures. Our companies, particularly in the high-tech area, are under persistent, withering attack. Many of them have called on the government for help. Economic security and national security are no longer separate domains. As the secretary of defense’s 2010 annual report to Congress states somewhat breathlessly, “The heavy use of outsourcing of computer and consumer electronic production to China, not only by American but also Japanese, Taiwanese, German and South Korean firms has helped create a Chinese cyber threat that now compromises the security of the Western world.” Joel Brenner writes about the nature of cyber war in his book, America the Vulnerable: Inside the New Threat Matrix of Digital Espionage, Crime and Warfare, noting that “the objective in warfare would not be killing or occupying territory, but rather paralyzing the enemy’s military and financial computer networks and its telecommunications. How? By taking out the enemy’s power system. Control, not bloodshed, would be the goal. . . .”14 It is unlikely that this possibility will ever become reality with China, but it is better to be prepared than caught by surprise. Money spent on cyberdefense would be money well spent.
In addition, we have to understand the effects of our own actions on China. U.S. ships and airplanes mounting intelligence-gathering operations in international waters at least twelve miles from China’s coast fall under the accepted category of espionage. Using that intelligence to execute simulated attacks on Chinese targets in order to assess Chinese defenses and responses in a potential military situation amounts to more than espionage and is needlessly provocative. Imagine how the Congress would react if it learned that the Chinese were just twelve miles off the coast of California running simulated attacks on our mainland. We have to ask ourselves whether the military information we get about a country with which there are no imminent hostilities is worth the political cost. These events, which are known to Chinese authorities, along with the wide television coverage in China given to United States-Japanese-South Korean live ammunition joint naval exercises, send the message to the Chinese people that America sees China as the enemy. If this impression hardens, there inevitably will be a Chinese reaction.15 Is that any way to build a common future? It is to be hoped that those on both sides o
f the U.S.-China relationship will find cooperation more advisable than conflict. To miss the win/win potential of our relatioship would be a tragedy.
Adjusting to the reality of Chinese economic power may prove difficult, given our current assumptions about how to operate in the world. For example, when the Palestinians applied for admission to UNESCO, the education and cultural arm of the United Nations, a law passed in another era required a cutoff of U.S. support for UNESCO. The premise of the law was that thanks to our economic clout (we supply more than a fifth of UNESCO’s budget), we could prevent UNESCO from admitting the Palestinians. The threat failed and the Palestinians took their place in the organization. In a world with growing Chinese power, such action, like a clumsy martial arts move, could backfire. China could simply fill the void anytime we backed out, enhancing its soft power and making us look like the spoiled child who picks up his marbles and goes home when he doesn’t get his way. The time has come for us to wake up and start playing the geopolitical game of the twenty-first century, not the one of the last half of the twentieth.
