Influence of South China Sea and Crimea on “One Belt, One Road” (OBOR)

&the US/Australia response

Lecture at

Beijing International Studies University14 March, 2016

ByJeff Schubert

Head/Director "International Centre for Eurasian Research"

School of Public Policy, RANEPA, Moscow

www.shanghai-ifc.orgwww.russianeconomicreform.ru

www.jeffschubert.com

Introduction (1) The basic causes of Russia actions in Crimea and China’s actions in the South China Sea are very similar:• national security!• US is seen as big threat

“Pivots” are now fashionable:• the US military has been trying to do a “pivot” to the Asia-Pacific region

away from Middle-East• Russia is doing a “pivot” to the East away from Europe • China’s “One Belt, One Road” (OBOR) initiative has aspects of a “pivot” in

a western direction

The “pivots” are driven by economic and national security concerns:• but, the main driver of US “pivot” is desire to remain top-dog

Introduction (2)

Much discussion about China’s island building activity in the South China Sea has referred to the “Thucydides Trap” and the possibility of conflict with the US:

• while not exactly the same, the recent activities of Russia in Crimea (and Eastern Ukraine) have many similarities to such a “Thucydides Trap” in relation to NATO

• (Note: There are significant differences between Russian action in Crimea and Syria)

Australia (following US actions) could find itself in military conflict with China if the recommendations of its “security establishment” dominate thinking in Australia:

• security concerns nearly always seem to trump economic issues (in any country)

Thucydides Trap (1)This refers to events about 2,500 years ago when the Peloponnesian War occurred and was written about by a Greek named Thucydides:

• basic story is that the growing power of as Athens caused great concern to Sparta which had for some time been the most powerful state – and the end result was devastating war!

Rivalry between Germany and Britain in the lead up to the First World War is another case often cited

The essential idea of the “Thucydides Trap” is:

• that a rising power (in terms of GDP and military capacity) will always want more influence over the world around it, while the existing dominant power will resent this and seek to prevent it happening

Thucydides Trap (2)

Graham Allison at the Harvard Belfer Center has examined 16 cases of “ruling” and “rising” powers over the last 500 years and says that in 12 cases “the result was war”

Allison wrote in regard to the US and China:

• what strategists need most at the moment is not a new strategy, but a long pause for reflection.

• if the tectonic shift caused by China’s rise poses a challenge of genuinely Thucydidean proportions, declarations about “rebalancing,” or revitalizing “engage and hedge,” amount to little more than aspirin treating cancer

• future historians will compare such assertions to the reveries of British, German, and Russian leaders as they sleepwalked into 1914

• managing this relationship without war will demand sustained attention, week by week, at the highest level in both countries

General Attitudes to China (1) Stephen Hadley, former US National Security Adviser has recently written that conflict between China and the US might not occur because:

• there are no conflicting territorial claims; US has not tried to prevent China’s emergence; and there was US support for China’s diplomatic entry on to the world stage

• several factors in US-China relations are more prominent than between major powers in the past: interdependent in trade, economically and financially gives them an incentive to resolve disputes without the resort to military conflict

• the biggest reason to be cautiously optimistic that these two countries can break the traditional pattern is because it is in their interests to do so

But then Hadley adds:

• but to reach this new model, China must reconcile itself to a continued active US role in the Asia-Pacific

• US military presence in Asia has been a stabilising force, reassuring China’s neighbours that they need not feel threatened by China’s rising economic and military power

General Attitudes to China (2) Australia academics, Michael Heazle and Andrew O’Neil, call it “hubris” that China might want to change things:

• “no regional economy has benefited more from the Asia-Pacific’s liberal, rules-based order, made possible by US primacy, than China. But in an odd and hubristic twist, Beijing now seems keen to risk the stability of the status quo with its increasingly assertive behaviour in the South China Sea.”

John Lee (Australian academic) and Paul Dibb (ex-Australian defence official) say concessions should not be made to China because:

• China may soon be approaching the zenith of its power as its economy encounters serious structural impediments and demographic barriers to growth. Worsening domestic problems will take up an increasing share of economic resources and national wealth. China’s leadership will struggle to keep a lid on growing popular discontent

• planning for an era of Chinese dominance in the region—or even its emergence as an American strategic peer in Asia—would be premature

Crimea / Russia (1) While Russia is not a “rising” power is the way that Allison would define it, Russia has recovered a considerable amount of the power (particularly military) that it lost in the years following the collapse of the USSR:

• despite the more recent economic difficulties (mostly associated with the collapse in oil prices), many Russians (particularly in the ruling power elite) now see Russia as a “rising” power

• Russia’s policies are based on long-standing threat perceptions, historical grievances, and more recent humiliations (eg collapse of USSR etc)

• Putin is a Russian nationalist who wants to restore the greatness of Russia after what he sees as humiliation under some of his predecessors

Now think about China !! “rising power”; “historical grievances” and “humiliations”; “nationalist” leadership

Crimea / Russia (2) 1994 Budapest Memorandum on Security Assurances, signed by the US, UK, and Russia:• provided guarantees on Ukrainian territorial integrity in exchange for Ukraine

relinquishing its nuclear arsenal

There are conflicting claims on whether assurances were ever given to Russia that NATO would not expand, but many in Russia believe that this was the case:

• this had important implication for Russia because it had proved easy for Napoleon and Hitler to cross the flat land area to Russia’s west

• Czech Republic, Hungary and Poland joined NATO in 1999, and Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia in 2004

• at its 2008 summit, NATO considered admitting Georgia and Ukraine and issued a statement declaring, “These countries will become members of NATO.”

In 2008, the EU unveiled its Eastern Partnership economic initiative: • many Russian policy makers regarded this as a indirect step to further NATO

expansion, with the inclusion of Ukraine

Crimea / Russia (3)The Maidan Square protests in Kiev in early 2014 eventually led to President Yanukovych fleeing Ukraine

Ukrainian parliament took various steps that demonstrated strong anti-Russian sentiment:

• first it alarmed many Russian-speaking Ukrainians by seeking to repeal the 2012 language law allowing Ukrainian regions to make Russian a second official language

• then, the parliament secretariat registered draft legislation which would have reinstated the goal of joining NATO as Ukrainian national strategy

Ukraine is significant to Russia, but Crimea is critical:

• Sevastopol and is home to Russia’s Black Sea Fleet. The warm water port, natural harbour and existing infrastructure make it one of Russia’s most important naval bases

Crimea / Russia (4)Moscow feared that the 2010 Kharkiv Agreements, which had extended the Russian Navy’s lease of Sevastopol as a base for 25 years:

• in March 2014, three former Ukrainian Presidents called on the new government to renounce the Kharkiv Agreements

Putin said: • “We have already heard declarations from Kiev about Ukraine soon joining NATO.

What would this have meant for Crimea and Sevastopol in the future? It would have meant that NATO’s navy would be right there in this city of Russia’s military glory, and this would create not an illusory but a perfectly real threat to the whole of southern Russia.”

Sir Tony Brenton (former UK ambassador to Russia) later said the “securocrats” around Putin were:

• “intensely focused on Russian security to the exclusion, probably to the disadvantage in the long term, of developing relations in other ways with the West”

Security in South China Sea for China China will have security fears about the South China Sea (and the US military “pivot” to Asia) that are similar to Russian fears about Crimea (and NATO expansion):

Paul Dibb (ex-Australian Defence official): • historically, land powers such as Russia (and the ex-USSR) and Germany have

repeatedly failed to secure maritime power. The best maritime strategy for a continental power such as China is what is called access-denial capability to its maritime approaches, which is precisely what China is undertaking.

• and like the former Soviet Union, China has limited geographical access to open seas, which can easily be constrained by superior Western detection and tracking capabilities

Bates Gill (Australian academic): • “China’s geo-strategic position is not particularly advantageous. Not only due to

the fact that four of its closest neighbors South Korea, Japan, the Philippines and Thailand, are US treaty allies, but also because its sea-borne import and export routes are vulnerable to attack or disruption”. China has territorial disputes with the Philippines, Vietnam, Taiwan, Malaysia and Brunei

Comparisons of Crimea and South China SeaSummary (1)

Russia has a long history of being invaded from the western side (Hitler and Napoleon): • China has its own history of being invaded and / or bullied by foreign powers

Geography means that Sevastopol is really the only possible home port for Russia’s Black Sea Fleet and it could not be allowed to fall into the hands of NATO: • South China Sea is strategically critical for China

Most of Russia smaller and less powerful neighbors are afraid of it, and those that are not would like to be part of NATO and this reinforced Russia’s fears:• most of China’s smaller and less powerful neighbors are afraid of it, and seek

closer military relations with the US; and to the extent that this occurs (plus the so-called US pivot to the Asia-Pacific), it will reinforce China’s fears

Comparisons of Crimea and South China SeaSummary (2)

As Russia’s power recovered (after the terrible 1990s) its leaders did not feel that it was getting due respect:• Chinese leaders do not feel that China is getting the respect due to it (for

example, in international financial institutions)

The conflict between Russia and Ukraine arose in spite of close economic ties, although the economic consequences will have been worse than expected• effect of China’s economic ties for South China Sea ??

A 2015 UK House of Lords report concluded that the EU “sleepwalked” into the Crimea crisis, partly because it “had not taken into account the exceptional nature of Ukraine and its unique position in the shared neighborhood”: • is there an element of “sleepwalking” in the US expecting China to accept all

of the present order ??

Russia’s East “Pivot”

Russia has a natural orientation toward the “West”:

• most of population is in western Russia• most of its history/culture is with “West”

Crimea (and Ukraine) have forced Russian to look to the “East” (especially China):

• energy exports• financing• international political support

Results have been disappointing for Russia:

• China thinks that Russia needs China, more than China needs Russia• Russian aspect of “OBOR” is not most important part of “OBOR” for China

“One Belt, One Road”

China’s reasons for “One Belt, One Road” (OBOR):

• develop western regions of China• secure trade routes for energy imports• provide markets for China’s infrastructure building companies

(eg rail) and other products• secure China’s western “flank”, particularly because of South

China Sea national security issues on eastern “flank”• China be seen as a “leader” on world issues

The future of Russian eastern “pivot” and China’s “One Belt, One Road”

Russia and China as east-west partners?

In short/medium term they will be very good partners:

• they are useful to each other• both are some difficult relations with US

Longer term conflicts may arise:

• countries of Central Asia (eg Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, Turkmenistan) were in former-USSR and Russia not want to give up political or economic influence

• China want increased economic (and eventual political) influence over Central Asia and countries on OBOR

Australian (US) Views on South China Sea Security Establishment “Concerns / Attitudes” (1)

Alan Dupont (Australian academic):

• Australia’s defence strategy has been based on two premises: it does not have the population or res ources to defend itself against a major security threat on our own. So it makes strategic sense to align itself with a great-power protector, preferably one that shares its values and interests

• Its chosen protectors — Britain and the US — shared not only its values and most of its interests, but (by and large) they were able to keep the regional peace because they were the preponderant military powers except for the decade of Japanese expansionism that ended in 1945

John Lee (Australian academic) and Paul Dibb (Australian ex-Defence official):

• it is in Australia's crucial strategic interests for Southeast Asia to avoid being dominated by China geopolitically or becoming a Chinese security domain

• Southeast Asia forms a strategic shield to Australia's vulnerable northern approaches

Australian (US) Views on South China Sea Security Establishment “Concerns / Attitudes” (2)

In 2014, ten Chinese soldiers together with 10 American and 10 Australian soldiers took part in an Australian survival exercise “learning from indigenous people how to find food, water and shelter in the outback (ie desert)”.

This tiny bit of military co-operation with little relevance to strategic issues became an excuse for excessive (even desperate) claims aimed at bolstering the Australia-US alliance:

• Dennis Richardson (Secretary of Australian Defence Department, and former Secretary of Foreign Affairs) said the exercise gave the lie to claims that Australia could not be close friends with both China and the US

• Rory Medcalf (Australian academic and member of the panel which wrote Australia’s recent Defence White Paper) said the exercise challenged the “simplistic” notion that the closer Australia got to its US ally, or indeed to Japan, the more strained and mistrustful its relationship would become with China. “It also undercuts the nonsensical view, that the alliance diminishes Australia’s chances of doing constructive things with Asian partners.”

Australian (US) Views on South China SeaSecurity Establishment “Recommendations” (1)

John Lee (Australian academic) and Paul Dibb (Australian ex-Defence official): • US should not move to one side in Asia to make strategic space for China • Australia should develop the military forces necessary to contribute to any US-Allied

conflict in the region, or where Australia needs to help resist Chinese military adventurism

• Australia could make a contribution by having the capability to blockade the straits of Southeast Asia in the event of a serious war in Northeast Asia involving the United States

• Australia needs to place high priority on strengthening its defence relations with Southeast Asian countries

Peter Jennings (Australian Strategic Policy Institute and ex-Defence official, and chair of panel which wrote the recent Defence White Paper):

• critically important for US allies, including Australia, to support the Americans and Australia’s other allies in the region by sending military units

Australian (US) Views on South China SeaSecurity Establishment “Recommendations” (2)

Ben Schreer (Australian academic) and Tim Huxley (International Institute for Strategic Studies):

• participating in joint regional patrols would send signal to China• Australia should also support the Philippines in its arbitration case against China

and encourage ASEAN to take a united position against China’s bullying• signal to China that much closer strategic relations with Japan are on the cards

as well

Ben Schreer and Tim Huxley:

• Australia should signal to China that it would even be prepared to accept economic costs

• would require explaining to the Australian public why the preservation of a rules-based order is of greater importance than economic trade with China

Security vis-à-vis Business (1)

As we have seen, many in the Australian “defence / security establishment” (securocrats) strongly advocate that their “recommendations” on security take precedence over Australia’s economic and business interests:

• (their concept of) rules-based international order is of greater importance than Australia’s economic relations with China

• Australia should support the US and other “allies” in the region by sending military units to help them in a conflict with China

• Australia should have a navy (submarines) powerful enough to blockade the straits of Southeast Asia in the event of a serious war in Northeast Asia involving the United States (and China)

In my view, while some of their “concerns / attitudes” are justified, all three of these “recommendations” are extremist!

Security vis-à-vis Business (2) The great majority of Australian (and US) businesspeople (and officials dealing with economic issues) will say little about this issue because:

• they will generally not be people who have read history books or have any real grasp about such more contemporary issues as Russia/Crimea

• they will generally be people who are much more comfortable in dealing with current events than about possibilities or probabilities to which numbers cannot be attached

• many will feel that it is not the place of business to engage in such debates, particularly if it may upset some customers or shareholders

• many will fear upsetting the Australian (or US) Government

Instead, business-people and economists they will “put their heads in the sand” and hope that the issue goes away, ignoring the words of Leon Trotsky: • “You may not be interested in war, but war is interested in you.”

Likely Australian Response to US-China conflict (1) Australia (like the US) has never been “invaded”: • this lack of experience with an invading power (such as experienced by both Russia

and China) makes to hard for most Australians (and Americans) to appreciate the sensitivities of China (and Russia)

Hugh White (an Australian academic and ex-Defence official who generally argues that the US must concede some space to China) commented on Prime Minister Turnbull’s late 2015 visit to the US:

• from everything Turnbull wrote and said about the issue before he became Prime Minister, one would have judged that he agrees with every word that Graham Allison wrote about the Thucydides Trap

• but that is very far from the impression from what Turnbull said in Washington • there he only spoke of what China has to do to avoid the Thucydides Trap

Of course, Turnbull would not be the first leader to be persuaded (scared into) by “securocrats” to adopt a flawed policy

Likely Australian Response to US-China conflict (2)

Australia’s new Defence White Paper, released on 25 February, says:

• the US 'will remain the pre-eminent global military power and will continue to be Australia's most important strategic partner'

• ‘the levels of security and stability we seek in the Indo-Pacific would not be achievable without the United States‘

• warns of 'challenges to the stability of the rules-based global order, including competition between countries and major powers trying to promote their interests outside of the established rules‘

• the term 'rules-based' is repeated 56 times

• 'future operations could include contributing to security in North Asia and helping to protect the extensive sea lines of communication that support Australian trade‘

• 'Australia is particularly concerned by the unprecedented pace and scale of China's land reclamation activities'

Conclusion President Xi Jinping, during his 2015 visit to the US, said that “there is no such thing as the so-called Thucydides Trap. But should major countries time and time again make the mistakes of strategic miscalculation, they might create such traps for themselves”:• Xi is unlikely to have in mind any change in China’s strategically critical

South China Sea policies (ie what China has to do)• Xi is really sending a warning to the US

So, the stage is set for eventual China-US conflict:• it may be this year, or 5 years time, or even more!• and, we do not know what circumstance will light the fuse!

Modern economic inter-dependence will be trumped by security concerns on all sides• Australia, to its own economic cost, would likely support the US