128. Analyses view the exclusive economic zone as part of either a “salami-slicing” strategy, whereby Beijing employs incremental actions to gradually change the regional status quo in China’s favor, or as part of a “cabbage strategy,” where control over disputed islands is consolidated—like the leaves of a cabbage—in successive layers of occupation and protection. Ronald O’Rourke, “Maritime Territorial and Exclusive Economic Zone (EEZ) Disputes Involving China: Issues for Congress,” Congressional Research Service, August 5, 2014.
129. James Hardy, “China Expands Runway, Harbor at Woody Island,” IHS Jane’s 360, August 29, 2014; Shannon Tiezzi, “China Discovers Gas Field in the South China Sea,” Diplomat, September 16, 2014.
130. Extending from the coast of mainland China through the South China Sea, the Strait of Malacca, across the Indian Ocean, and eventually on to the Arabian Sea and Persian Gulf, these geopolitical way markers would advance Chinese forward deployment and power projection capabilities along crucial sea lines of communication.
131. John J. Mearsheimer, “Can China Rise Peacefully?,” National Interest, October 25, 2014.
132. Ibid.; Patrick M. Cronin, “The Strategic Significance of the South China Sea,” (paper submitted for the CSIS “Managing Tensions in the South China Sea” conference, Washington, D.C., June 5–6, 2013).
133. Cronin, “The Strategic Significance of the South China Sea.”
134. Pierre Tran, “Vietnam Has Much at Stake in S. China Sea,” Defense News, March 28, 2015; Minnie Chan, “Southern Air Defence Zone ‘Crucial for China in Long Term,’ PLA Expert Says,” South China Morning Post, February 22, 2014; “Announcement of the Aircraft Identification Rules for the East China Sea—Air Defense Identification Zone of the PRC,” Xinhua News Agency, November 23, 2013.
135. Glaser, “China’s Coercive Economic Diplomacy.”
136. “China Attempts to Raise Electricity Price, Vietnam under Hard Pressure,” Vietnam Breaking News, March 16, 2011; “Inside the China-Philippines Fight in the South China Sea,” International Herald Tribune, May 15, 2012; James Reilly, “China’s Unilateral Sanctions,” Washington Quarterly, Fall 2012, 121–133; “Philippines Feels the Economic Cost of Standing Up to China,” Christian Science Monitor, May 15, 2012; “South China Sea: China, Vietnam Clash over Oil Exploration, Fishing,” International Business Times, December 6, 2012.
137. Anders S. Corr and Priscilla A. Tacujan, “Chinese Political and Economic Influence in the Philippines: Implications for Alliances and the South China Sea Dispute,” Journal of Political Risk 1, no. 3 (July 2013).
138. “Vietnam Weighs Sea Rights against China Business,” Bloomberg Business, May 28, 2014.
139. Association of Southeast Asian Nations External Trade Statistics, http://www.asean.org/resources/2012-02-10-08-47-55/asean-statistics/item/external-trade-statistics-3; “Chinese Ambassador—China Values President Sang’s Visit,” Asia News Monitor, June 19, 2013; “Indonesia Expresses Interest in New Shanghai Free Trade Zone,” Asia News Monitor, October 8, 2013; “Indonesia Signs Investment MOU with China’s Anhui Province,” Xinhua News Agency, April 24, 2013; Bao Chang, “China Playing a Rising Role in ASEAN Business,” China Daily (Asia), October 11, 2013; Yantoultra Ngui, “China Elevates Malaysia Ties, Aims to Triple Trade by 2017,” Reuters, October 4, 2013.
140. Author interview with Bonnie Glaser, August 2014.
141. In Vietnam, imports from China doubled in value between 2009 and 2013. Chinese goods accounted for 28 percent of imports and are expected to account for more than half by 2020. Tran, “Vietnam Has Much at Stake in S. China Sea.”
142. Ibid.
143. Madhu Sudan Ravindran, “China’s Potential for Economic Coercion in the South China Sea Disputes: A Comparative Study of the Philippines and Vietnam,” Journal of Current Southeast Asian Affairs, March 2012, 119.
144. Christopher Johnson, comments at Asia Forecast 2014, CSIS, January 29, 2014; Fareed Zakaria, “Southeast Asia Ponders What Is Going On in China,” Washington Post, October 24, 2013.
145. Reilly, “China’s Economic Statecraft”; Milton Osborne, “New Numbers on China’s Cambodia Aid,” Interpreter, Lowy Institute for International Policy, September 19, 2012.
146. Glaser, “China’s Coercive Economic Diplomacy.”
147. Ravindran, “China’s Potential for Economic Coercion in the South China Sea Disputes,” 118.
148. Reilly, “China’s Economic Statecraft.”
149. Paul Mooney, “South East Asia Faces Renewed Unity Test as South China Sea Tensions Spike,” Reuters, May 9, 2014.
150. Andrew Higgins and David E. Sanger, “3 European Powers Say They Will Join China-Led Bank,” New York Times, March 17, 2015; “China’s $50 Billion Asia Bank Snubs Japan, India,” Bloomberg Business, May 12, 2014.
151. “Now that the United States has lost the battle, it has softened its position, saying that it will encourage the World Bank and the Asian Development Bank to cooperate with the new bank, provided projects meet certain standards. Yet the shift to a more constructive position was viewed as late, and the repercussions of what many considered poor handling by Washington were on display at the Boao Forum for Asia.” Jane Perlez, “Stampede to Join China’s Development Bank Stuns Even Its Founder,” New York Times, April 2, 2015; also see Gabriel Wildau, “China Backs Up Silk Road Ambitions with $62bn Capital Injection,” Financial Times, April 20, 2015.
152. “China-Led Asia Infrastructure Bank Gains Support from 21 Countries,” Reuters, September 28, 2014; “Canberra Set to Sign for China-Led Bank,” Australian, October 13, 2014.
153. Jane Perlez, “U.S. Opposing China’s Answer to World Bank,” New York Times, October 9, 2014.
154. Reilly, “China’s Economic Statecraft.”
155. Ibid.
156. Ibid.
157. Ibid.
158. China’s geographic vulnerabilities have not escaped the notice of U.S. war planners. A 2015 Department of Defense report to Congress on China mapped out choke points for Chinese energy imports, a move likely to have caught attention in Beijing. While the U.S. Navy retains uncontested supremacy over the open ocean, resource constraints—and the risks posed by China’s increasing anti-ship capabilities in its near seas—make it likely that U.S. forces would concentrate on blocking the choke points in the event of hostilities. Office of the Secretary of Defense, “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2015,” April 2015.
159. Jane Perlez, “China Looks to High-Speed Rail to Expand Reach,” New York Times, August 8, 2014.
160. Ibid.
161. “China, Laos Ready to Launch Negotiations on Railway Cooperation,” Xinhua News Agency, April 8, 2014; David Eimer, “China’s 120mph Railway Arriving in Laos,” Telegraph, January 14, 2014.
162. Eimer, “China’s 120 mph Railway Arriving in Laos.” For China, a strong relationship with Laos would also prove a conduit for developing greater access to shorter land trade routes to Southeast Asia.
163. Geoff Wade makes this point capably in Perlez, “China Looks to High-Speed Rail to Expand Reach.” Additionally, China has been struggling to build a similar cross-continental railway in South America, where long-held fears that America may one day try to restrict China’s access to the Panama Canal have prompted it to start working with its South American partners on a series of “dry canals” across the region. While China has promised hundreds of billions of dollars to countries involved in the projects, a combination of environmental concerns, red tape, and unease over the future of the Chinese economy after its stock market plunged in August 2015 have all caused delays in the projects. See Simon Romero, “China’s Ambitious Rail Projects Crash Into Harsh Realities in Latin America,” New York Times, October 3, 2015.
164. The latter bid was made alongside two local partners; China’s State Grid emerged with 40 percent ownership of total shares, marking the first time a Chinese grid company has won a franchise for operating national
power in a foreign country. Roel Landingin and Richard McGregor, “China State Grid Group Wins Philippine Auction,” Financial Times, December 12, 2007; “State Grid Invested Transmission Networks in the Philippines,” Invest in China website, Investment Promotion Agency, Ministry of Commerce, Beijing, February 16, 2009.
165. “Philippine National Grid Denies Claims China Could Shut off Power,” South China Morning Post, March 26, 2014.
166. Wu Jiao and Zhang Yunbi, “Xi in Call for Building of New ‘Maritime Silk Road,’ ” China Daily, October 10, 2013. While the claim may be minor, it is definitely a claim: Beijing’s line includes waters that Indonesia claims. “The Natuna waters … are part of Riau Islands Province in Indonesia, located along the southern part of the strategic Strait of Malacca. They are part of the South China Sea” (Zachary Keck, “China’s Newest Maritime Dispute,” Diplomat, March 20, 2014). “With 80% of its oil imports traversing through the strait—and this [statistic] continues to increase—China has an obvious reason to be worried about the threat that piracy and maritime terrorism pose to the security of its oil supply” (Caroline Vavro, “Piracy, Terrorism and the Balance of Power in the Malacca Strait,” Canadian Naval Review 4, no. 1 [Spring 2008]: 16). Hu Jintao also warned at one point that certain major powers were attempting to control Malacca, but PRC has not asked to be involved in the security provisions for the Strait. As such, China’s diplomatic initiatives in the region (sometimes called its “maritime silk road” or its “string of pearls strategy”) matter; China’s development of ports, cultivation of diplomatic ties with littoral states along vital sea lanes, and so on, offer Beijing a means of being involved without being involved (see Shi Hongtao, “China’s ‘Malacca Dilemma.’ ” China Youth Daily, June 15, 2004).
167. Wildau, “China Backs Up Silk Road Ambitions with $62bn Capital Injection”; “The Grand Design of China’s New Trade Routes,” Stratfor Global Intelligence, June 24, 2015.
168. Gregory B. Poling, “Dynamic Equilibrium: Indonesia’s Blueprint for a 21st Century Asia Pacific,” CSIS, March 8, 2013.
169. “Indonesia Expresses Interest in New Shanghai Free Trade Zone”; “Indonesia Signs Investment MOU with China’s Anhui Province.”
170. Reilly, “China’s Economic Statecraft.”
171. Ibid.
172. Fareed Zakaria, “With an Absent United States, China Marches On,” Washington Post, July 2, 2015.
173. Ibid.
174. Glaser, “China’s Coercive Economic Diplomacy.” (According to Glaser, “Beijing has provided over $10 billion in aid to Cambodia. In 2011 alone the amount of foreign investment pledged to Phnom Penh by China was 10 times greater than that promised by the United States.”) In the latest available statistics from the Cambodia Investment Board, released in 2012, Chinese investment pledged in Cambodia has totaled $9.1 billion since 1994, including almost $1.2 billion in 2011—eight times more than the United States. See “Economic Overview of Cambodia,” Cambodia Investment Board, 2013 Guidebook, https://docs.google.com/viewer?url=https://dl.dropboxusercontent.com/u/17527828/cdc_guide_book2013/2014/03/2.ECONOMIC-OVERVIEW-OF-CAMBODIA_eng.pdf.
175. Andrew R. C. Marshall and Prak Chan Thul, “Insight: Cambodia’s $11 Billion Mystery,” Reuters, February 13, 2013.
176. “Myanmar: Earthquake 2011, List of All Commitments/Contributions and Pledges as of 19 December 2014,” Financial Tracking Service, United Nations Office for the Coordination of Humanitarian Affairs, March 2011, http://fts.unocha.org/reports/daily/ocha_R10_E16053_asof___1411251426.pdf.
177. “China Offers Humanitarian Aid of 500,000 USD to Quake-Hit Myanmar,” Xinhua, March 26, 2011; “China Provides Aid for Resettlement of Myanmar Homeless,” Xinhua, December 31, 2012.
178. “China Provides Aid for Resettlement of Myanmar Homeless.”
179. “Sino-Myanmar Gas Pipeline Becomes Fully Operational,” The Hindu, October 20, 2013.
180. Aung Shin, “Contested Sino-Myanmar Oil Pipeline Nears Completion,” Myanmar Times, November 17, 2013.
181. Sophie Song, “Myanmar Copper Mine Will Receive $997 Million from Chinese Investor Following Local Protests,” IBI Times, July 31, 2013.
182. “Authorities Open Fire on Myanmar Copper Mine Protesters,” Radio Free Asia, November 15, 2013; “Myanmar to Get Bigger Slice of Profits at China-Backed Copper Mine,” South China Morning Post, October 3, 2013.
183. Seamus Martov, “Myitsone Dam Project on Hold, but Far from Dead,” The Irrawaddy, November 6, 2013. See also, Thomas Fuller, “Resentment of China Spreading in Myanmar,” New York Times, May 19, 2014.
184. Zin Linn, “Burma: Will the Myitsone Dam Project Resume?,” Asia Correspondent, September 10, 2013.
185. Perlez, “China Looks to High-Speed Rail to Expand Reach.”
186. Paul Mooney, “ASEAN Faces Renewed Unity Test as South China Sea Tensions Spike,” Reuters, May 10, 2014.
187. Ely Ratner, “China Undeterred and Unapologetic,” War on the Rocks, June 24, 2014; Ely Ratner, “A Plan to Counter Chinese Aggression,” Wall Street Journal, June 10, 2014.
188. IMF, Direction of Trade Statistics, IMF e-Library, Myanmar, http://data.imf.org/?sk=253a4049-e94d-4228-b99d-561553731322&sId=1390030109571.
189. Leon T. Hadar, “U.S. Sanctions against Burma,” Trade Policy Analysis, Cato Institute, March 26, 1998; “China to Ignore U.S. Sanctions on Myanmar,” Al-Jazeera, July 16, 2003.
190. Perlez, “China Looks to High-Speed Rail to Expand Reach.”
191. “Li Raises Four-Point Proposal on Upgrading China-Vietnam Business Cooperation,” Xinhua News Agency, October 15, 2013.
192. Chun Han Wong, “Beijing, Singapore in Currency Pact,” Wall Street Journal, October 22, 2013.
193. “China’s ‘All-Weather’ Threat to India,” Diplomat, August 8, 2013.
194. Christina Wagner, “Soft Power and Foreign Policy: Emerging China and its Impact on India,” in Emerging China: Prospects for Partnership in Asia, ed. Sudhir T. Devare, Swaran Singh, and Reena Marwah (New Delhi: Routledge, 2012).
195. As Husain Haqqani, former Pakistani ambassador to the United States, once put it, “For China, Pakistan is a low-cost secondary deterrent to India,” while “for Pakistan, China is a high-value guarantor of security against India.” Ramananda Sengupta, “Evaluating a Rocky India-China-Pakistan Relationship,” February 2010, Al Jazeera Centre for Studies.
196. Jamal Afridi and Jayshree Bajoria, “China-Pakistan Relations,” Backgrounder, Council on Foreign Relations, July 6, 2010.
197. As if to telegraph just how delicately China treats its ongoing military cooperation with Pakistan, during a May 2013 visit by Chinese premier Li to Pakistan, China’s Xinhua state news agency said Beijing was looking for “pragmatic” military cooperation with Pakistan, “which is in the front line of the fight against international terrorism,” and reiterated that “the military exchanges are not directed against any third party and contribute to peace and stability in both the region and the whole world.” Nick Macfie, “China’s Li Offers to Help End Pakistan Energy Crisis,” Reuters, May 22, 2013.
198. Khurram Shahzad, “Pakistan Turns to China for Development Aid,” China Post, December 9, 2013.
199. Jane Perlez, “China Gives Pakistan 50 Fighter Jets,” New York Times.
200. See, e.g., James Crabtree and Victor Mallet, “India Confident of Overtaking China’s Growth Rate, Financial Times, May 17, 2015. See also James Gruber, “Why India Will Soon Outpace China,” Forbes, May 4, 2014. “First,” Gruber explains, “it’s highly probable that China’s GDP growth rate is slowing much more than the fraudulent figures put out by the government.… Second, credit tightening in China will almost certainly take years rather than months given the boom which preceded it.”
201. With plans to establish a new development bank, the BRICS grouping is widely seen as a counter to existing Western financial and political institutions such as the World Bank, the International Monetary Fund, and the G7. (See the “Financial and Monetary Policy” sectio
n of Chapter 3.)
202. “U.S. Relations with Pakistan,” U.S. Department of State, September 10, 2014, http://www.state.gov/r/pa/ei/bgn/3453.htm.
203. Rajshree Jetly, “Sino-Pakistan Strategic Entente: Implications for Regional Security,” Institute of South Asian Studies, National University of Singapore, Working Paper No. 143, February 14, 2012.
204. Susan B. Epstein and K. Alan Kronstadt, “Pakistan: U.S. Foreign Assistance,” Congressional Research Service, July 1, 2013.
205. Ibid.
206. Farhan Bokhari, “China’s Growing Influence on Pakistan Worries U.S.,” CBS News, December 19, 2010; Jane Perlez, “One Place Where the U.S. Can Rest Easy about China’s Influence?,” New York Times, November 4, 2013; Chris Buckley, “Behind the Chinese-Pakistani Nuclear Deal,” New York Times, November 27, 2013.
207. Rosheen Kabraji, “The China-Pakistan Alliance: Rhetoric and Limitations,” Asia Programme Paper ASP PP 2012/01, Chatham House, London, December 2012.
208. Ibid.
209. “Hagel in New Delhi on the U.S.-Strategic Partnership,” U.S. Department of State, August 9, 2014.
210. Ashley J. Tellis, “Kick-Starting the U.S.-Indian Strategic Partnership,” Carnegie Endowment, September 22, 2014.
211. Frank Jack Daniel and Rajesh Kumar Singh, “With Wary Eye on the U.S., China Courts India,” Reuters, May 21, 2013.
212. Saibal Dasgupta, “Thousand Links: China Ties Pak to Xinjiang Terror,” Times of India, March 8, 2012.
213. Raffaello Pantucci, “Break Up Time for Pakistan, China?,” Diplomat, June 7, 2012.
214. M. Aftab, “Pak-China Economic Corridor May Attract $70b Investment,” Khaleej Times, July 7, 2014.
215. Meena Menon, “Pakistan’s First Solar Power Project Launched,” The Hindu, May 9, 2014.
216. Aftab, “Pak-China Economic Corridor May Attract $70b Investment.”
217. Charles Clover and Lucy Hornby, “China’s Great Game: Road to a new empire,” Financial Times, October 12, 2015.
218. Jane Perlez, “Xi Jinping Heads to Pakistan, Bearing Billions in Infrastructure Aid,” New York Times, April 19, 2015; “China to Invest $50bn in Uplift Projects by 2017,” Daily Times, September 12, 2014; “China’s Ambitious Silk Road Vision,” Strategic Comments, International Institute for Strategic Studies, October 26, 2015.
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