14 June 2020, NIICE Commentary 5317
Dr. Satoru Nagao
While the world faces the fallout from the COVID-19 pandemic, China has undertaken a large number of aggressive military operations throughout the Indo-Pacific region. In the East China Sea, Beijing has increased its military and paramilitary activities around the Senkaku Islands of Japan and pursued Japanese fishing boats inside of Japan’s territorial sea. In Taiwan, a Chinese Coast Guard ship shot in the air and rammed a Taiwan Coast Guard ship from the rear. As for Hong Kong, China passed a national security law to crack down on the democratic movement supported by most of the residents. In the South China Sea, China’s activities are very frequent. In April 2020 it sank a Vietnamese fishing boat. On disputed islands that it built, it has recently established new districts and two research facilities in an attempt to legitimize its claim, and it has fortified them by deploying new military aircraft. A Chinese survey ship escorted by Coast Guard ships also entered Vietnam’s and Malaysia’s exclusive economic zones to further military research. Moreover, China dispatched an aircraft carrier battle group around Japan, Taiwan, and the South China Sea to hold exercises and intimidate these countries. In yet another incident, a Chinese fleet dispatched to near Hawaii targeted a US military plane with a laser in international airspace. In the Indian Ocean, China sent twelve drones to collect information that can be used for Beijing’s submarine activities. In the Indochina border area, 5,000 Chinese troops entered the Indian side and clashed with Indian forces, resulting in casualties. All of this has taken place during the COVID-19 crisis.
Furthermore, the novel coronavirus originated in China, and Beijing concealed information that ultimately led to its rapid global spread. The United States is very frustrated with China, and since the pandemic will undoubtedly affect the outcome of the US presidential election in November, US-China relations are becoming increasingly tense, and other countries must adapt to the new circumstances. For Nepal, India, and Japan, this situation raises three questions: What changes should they expect from an escalation in the US-China tensions? What problems will they face? And how should they respond?
What changes should the three countries expect from the escalation? It is essential for all of them to know which side is likely to win. The United States is now the world’s only superpower, a status it acquired by defeating rivals such as Germany, Japan, and the Soviet Union. Can we learn a lesson from the history? Japan has an unfortunate and tragic history of war with the US, yet precisely for that reason, it can confidently tell the world not to underestimate the US policy toward China. During the 1920’s, the US developed a set of hypothetical war scenarios for engaging other countries, a common practice in scenario planning. Before World War II, the US plan for confrontation with Japan was known as “Plan Orange.” Though it was not precisely executed, it did indicate a general strategic direction. It had a plan for confrontation with Germany called the “Black plan.” When the color-coded plans were declassified in 1974, it emerged that the United States had also had a war plan for confronting Great Britain and Canada, known as the “Red plan,” indicating that the US prepares for all scenarios, even unlikely ones. Therefore, the Japanese take seriously the US frustration with China and believe that Washington has a plan for confronting Beijing.
Additional evidence suggests that the recent US actions are part of a long-term strategy. An example is the US-China technology war and Washington’s ban on products made by Huawei and ZTE. This process started during the Obama administration, which in 2012 published the Investigative Report on the US National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE. After its publication, the US government began to ban federal agencies from purchasing from the two Chinese telecom companies. Washington has merely begun to implement this long-term strategy more aggressively.
If the US has a plan, why has it recently stepped up its efforts against China? The first reason is that Beijing’s activities are very challenging, and the second is that now is the best time for the US pressure on China. According to UNESCO Institute for Statistics figures published in 2018, the United States invests USD 476 billion in research and development, compared with China’s USD 370 billion. This means the United States still has a financial advantage in developing new technology. Similarly, the International Monetary Fund’s World Economic Outlook Database for 2018 shows that the US economy is larger than China’s, with US GDP at USD 19.39 trillion, compared with China’s USD 12.24 trillion. The United States is also stronger militarily, with a USD 603 billion defense budget, compared with China’s USD 150 billion, according to the Military Balance 2018, published by the International Institute for Strategic Studies in London. Based on current technology, economic strength, and the military balance, it looks like the US would beat China in a competition. Nepal, India, and Japan should not forget these US advantages as they plan for the future.
What kind of strategy will Washington choose? Militarily, it will choose a strategy of balancing, but economically, it will impoverish China. The US decision to adopt a balancing strategy was a result of China’s pattern of expansion in the South China Sea in recent decades. Consider the history. In the 1950s, just after the French withdrawal from Indochina, China occupied half of the Paracel Islands. In 1974, after the US withdrawal from South Vietnam, it occupied the rest. After the Soviet Union decreased its military presence in Vietnam, China occupied six reefs in the Spratly Islands in 1988 and in 1995, it occupied Mischief Reef after the withdrawal of US troops from the Philippines. To dissuade China from continuing its military expansion, the United States must prioritize maintaining a military balance with China.
Washington has an interest in preventing Beijing from gaining the wealth it needs to rapidly modernize its military. Moreover, China’s wealth enables it to expand its influence by investing a great deal of money in small countries and leading them into debt. Countries with significant Chinese investment (and debt) are also hesitant to criticize Beijing, even when it violates international rules. For this reason, the United States will use trade wars, economic sanctions, or other means in an attempt to weaken China economically.
What problems will Nepal, India, and Japan face as a result of this new policy? Washington has asked its allies to increase their defense spending and shoulder more of the security burden. It will also impose sanctions against government officials and companies that trade with China. How should Nepal, India, and Japan respond? In the long run, all three will need to cooperate with the United States because Washington will emerge victorious in its confrontation with Beijing. In the short run, however, these countries must adapt to the emerging reality.
First, they should improve their defense capabilities. Japan is acquiring limited offensive capabilities and will import more than 100 F-35s from the United States. For India to provide security in the Indian Ocean region is not only the US interest but an Indian interest as well. India can also increase its defense capabilities in the India-China border area by using American-made equipment, such as that employed by the Indian Army’s 17 Corp and its airmobile capability of the Indian Air Force. Nepal has a long-standing reputation as a provider of strong soldiers, the Gurkhas, to other military forces. Now is the time for Nepal to expand the Gurkha presence in armed forces of the US side countries.
Second, Nepal, India, and Japan should not be economically dependent on China. In the short term, they can maintain their cooperation with Beijing, but in the long run, they must reduce their economic dependence to avoid becoming passengers on a sinking ship. Japan has already started to reduce its dependence on Beijing. In April 2020, Japan earmarked USD 2.2 billion of its record economic stimulus package to help local manufacturers shift production out of China, and indeed, many Japanese companies have relocated their Chinese factories to Southeast Asia or South Asia. As a result, the number of Japanese citizens living in China is decreasing and has gone from 150,399 in 2012 to 120,076 in 2018. The number of Japanese living in the United States, on the other hand, has increased, from 410,973 in 2012 to 446,925 in 2018.
When the COVID-19 crisis ends, many companies will relocate their factories from China, and South Asian countries, including Nepal and India, could be realistic destinations. Nepal, India, and Japan should cooperate with the United States militarily and economically to help them come out ahead in these difficult times
