China's Strategic Dilemmas

Confronted with irreconcilable objectives, China is putting on a brave face as it deals with a serious dilemma

By: Bilahari Kausikan

Bilahari Kausikan (above) is former Permanent Secretary of the Singapore Foreign Ministry and presently Chairman of the Middle East Institute, National University of Singapore. He delivered this as the keynote address to the Royal Australian Air Force Air and Space Power Conference in Canberra on March 22. While it is considerably longer than most of our submissions, we reprint it here in full because of its importance.

The war in Ukraine has lasted a month. Russian President Vladimir Putin badly miscalculated and Xi Jinping followed him into a strategic dead-end with no easy exit.

We will never know exactly what Putin told Xi Jinping when they met before the opening of the Beijing Winter Olympics on 4th February and declared that their partnership had “no limits.” That Putin waited until the Olympics ended before invading Ukraine, argues for a degree of foreknowledge on China’s part.

But Beijing nevertheless seems taken aback by the scale of Russia’s attack, the resoluteness of Ukrainian resistance, and by the tough and united Western response to the invasion. Putin may well have misled Xi because he misled himself.

The key strategic issue for Beijing is its competition with the US. The war in Ukraine has sharpened the line between them. Beijing wants to stabilize relations with Europe as far as possible to focus on dealing with the US. But its refusal to criticize Russian aggression complicates China’s relations with Europe and will continue to do so as long as Russia does not withdraw from Ukraine.

China is putting on a brave face, but is in a serious dilemma. It is confronted with three mutually irreconcilable objectives.

First, China does not want to become collateral damage from sanctions directed at Russia. The Ukraine war has disrupted an already fragile global economy. China’s growth was already slowing for a variety of reasons and Beijing is grappling with complex economic issues. It does not need additional problems. With the 20th Party Congress in the autumn, maintaining stability is China’s watchword. Ukraine is the antithesis of stability.

Second, China has always been neuralgic about preserving respect for sovereignty, territorial integrity and non-interference as key norms of international relations. The reasons for this can be summarized in three words: Tibet, Xinjiang and Taiwan. The Russian invasion of Ukraine was a direct challenge to these norms.

Third, and most crucially, China wants to preserve its partnership with Russia. The Sino-Russia relationship was never as idyllic as Moscow and Beijing liked to portray. But whatever difficulties China may face because of the invasion of Ukraine, China will not break with Russia. Beijing has no other partner anywhere in the world with Russia’s strategic weight who shares China’s distrust of the current global order.

Which other country is prepared to go as far as Putin’s Russia to work with China to create a less Western-oriented multipolar order? Reclaiming what China believes is its rightful place in such a world lies at the heart of Xi Jinping’s ‘China Dream’.

Beijing has indicated that it is prepared to play a role in brokering a ceasefire or a settlement in Ukraine. A quick negotiated end to the fighting would be in China’s interest. But are Beijing’s calls for negotiations significant except as a sign of China trying to adjust position? Will China really use whatever leverage it may have impartially? Talks between Russia and Ukraine are difficult enough without another interlocutor who is not neutral.

Having failed to secure a swift victory, Putin must secure a decisive victory. Putin’s right to rule rests on the claim that he had restored Russia’s strength and the world’s respect for Russia’s strength. But the perception of Russia’s strength and respect for its strength are among the casualties of Putin’s war in Ukraine. Now that he has been denied a quick victory and questions have arisen about the competence of Russia’s military, Putin cannot afford to look weak or accept any compromise that leaves him vulnerable to looking weak. Only Putin knows what ‘not looking weak’ means in practice.

I am among those who think that the West mishandled relations with post-Soviet Russia in the 1990s. But that is now moot. Not only does it not justify aggression, but that may no longer be the relevant issue. The botched Russian invasion has changed the stakes. What is now at hazard for Putin is his legitimacy. President Zelensky has made clear that Ukraine would not seek NATO membership and is reportedly discussing neutralization. But the ferocity of the Russian offensive continues unabated.

What outcome in Ukraine would be acceptable to Putin, Ukraine, and the West? What does China mean when it says that Russia’s legitimate security interests must be considered? How far would China be prepared to push Putin to accept a compromise?

At present, I do not think anyone – China included -- has clear answers to these questions and only events will bring clarity. But I doubt Beijing will be prepared to go so far as to fundamentally jeopardize its relations with Russia or do anything that would undermine Putin’s grip on power.

Still, despite their shared distrust of the current global order, China is far more integrated into it than Russia, and has benefited more from it than Russia. The ‘China Dream’ is certainly revanchist and assertively so, but to call China ‘revisionist’ or a ‘systemic competitor’ is an overstatement. China has no strong incentive to kick over the table and seek radical revisions, at least not to the economic aspects of the existing order. Beijing may want to dominate the global system but not overthrow it.

Under its ‘Dual Circulation’ approach announced in 2020, China aims to become more self-reliant in key technologies and depend more on domestic household consumption to drive growth. Sanctions against Russia will lead Beijing to try and accelerate its drive for self-reliance and internally driven growth. But this is all far easier said than done and will not show significant results for a long time, if ever.

As the name suggests, Dual Circulation has two aspects and the other is still reliance on overseas markets. China is Russia’s most important economic partner. But the Russian economy is only about the size of the South Korean economy. The US, Japan and the EU markets are far more important to China than Russia and will remain so for the foreseeable future.

Being subject to sanctions of an unprecedented scope, and with about half its reserves frozen, Russia has nowhere to turn to except China. Russia will almost certainly become even more dependent on China, but will this be a liability or an asset for Beijing?

The US and Europe will not cut China any slack in implementing sanctions against Russia. China will certainly protect its own interests, as for example in its decision to deny Russian airlines spare parts. I doubt China is eager to throw good money after bad to support the ruble. Nevertheless, with the majority of China’s one billion internet users still cheering Russia, and despite the risks of non-compliance with Western sanctions, I also doubt that Beijing can entirely refuse to help Russia. To turn its back on Russia risks raising inconvenient questions among its own people about the Party’s judgment in placing “no limits” on China’s relationship with Russia.

Such questions already have been asked by a few Chinese intellectuals. They certainly do not represent mainstream views and will be ruthlessly suppressed. But the implications for the Party and Xi personally, should such views seep into the wider public will be a serious concern. To prevent this, the Chinese leadership must maintain some semblance of solidarity with Moscow and for that semblance to be credible, it has to be tangible. On Russia, political and strategic considerations pull Beijing in different directions from economic considerations. In a Party Congress year, we should not assume economic considerations will prevail.

There is no easy way for China to reconcile its objectives. Beijing will have to walk a fine and precarious line, and that line has got even finer and more precarious now that the US has revealed that Russia asked China for military and economic assistance and warned that agreeing will have serious consequences for US-China relations.

China’s Ukraine dilemmas come on the back of other foreign policy errors. The most prominent mistake was the premature abandonment of Deng Xiaoping’s sage approach of ‘hiding strength and biding time.’ China has become more assertive, if not downright aggressive, in pursuing its strategic interests in the East and South China Seas and in the Himalayas, and more mercantilist in its economic engagements with foreign countries. After the global financial crisis of 2008, Chinese leaders seem to have swallowed too much of their own propaganda about China’s system being superior and that the West in general and the US in particular, being in absolute and terminal decline.

China’s history and political culture have instilled in Chinese leaders the conviction that strong central authority is essential to good government. This perhaps leads them to underestimate the resolve and resilience of decentralized Western systems. Their underestimation of the West was no doubt reinforced by the chaotic Trump presidency and the bumbling initial Western response to the Covid-19 pandemic.

Strength and ambitions, once revealed, cannot be easily concealed again. Trade and investments and glib talk about ‘a community of common destiny’ cannot erase anxieties about China. Nobody will ever shun China – it is an economic and geopolitical fact that cannot be ignored -- but I am hard-pressed to think of any country, including some who are very dependent on China, that are without concerns about one aspect or another of Chinese behaviour.

The concerns are not all the same for every country, and are not held with the same intensity by every country, but they exist and are reshaping the security architecture of the Indo-Pacific. To some – I think a fairly large – extent, the Quad and AUKUS were as much the result of China’s mistakes as successes for American diplomacy. Concern with Chinese behavior is driving some European countries to try and play some sort of security role in the Indo-Pacific.

Russian aggression and China’s reluctance to criticize Russian aggression, has also catalyzed some broader geopolitical trends that were largely tentative and inchoate before the invasion. It has revitalized the idea of ‘The West’ which after the Cold War was loosening and in some danger of entirely decomposing. Moreover, the idea of ‘The West’ that is reconstituting itself, is a robust idea.

Putin has succeeded where successive post-Cold War American presidents have failed: he has got Europe to take its own defense seriously. Overnight, Germany doubled its defense budget and weaned itself from its taboo on arms transfers. Even the determinedly neutral Swiss joined sanctions. There are still unanswered questions about Europe’s newfound resolve, long-term energy security among them. But they are unlikely to deflect Europe’s new trajectory.

Without external intervention, the sheer mass of Russia will probably eventually overwhelm Ukraine and force a surrender. But that will not be the end of the story. Whatever is imposed on Kyiv, the bitterness of a grinding and bloody war will prevent Moscow from taking Ukraine’s stability for granted. So long as Russian forces remain directly or indirectly in occupation of all or part of Ukraine, Europe, and the trans-Atlantic alliance will continue to cohere.

Equally importantly, Russian aggression and China’s support for it, has dispelled a dangerous Western illusion about the nature of post-Cold War international relations. One of the most foolish statements I have ever heard from a Western leader was then-Secretary of State John Kerry criticizing Russia’s 2014 annexation of Crimea as 19th century behavior in the 21st century.

There are many good reasons to criticize Russia’s annexation of Crimea, but this particular criticism assumed – probably unconsciously – that your rival ought to share your values and if they did not do so, this was somehow unnatural. But why should they? If they shared your values, they would not be your rival in the first place. Fortunately, I have not heard any Western leader make such silly statements this time.

This is an important shift of intellectual framework because a similar cast of mind has bedeviled American and European relations with China. From 1972 to the end of the Cold War, US-China relations were primarily based on clinical geopolitical calculations. This was healthy because US-China cooperation was without illusions. But after the end of the Cold War, and in particular, after China joined the WTO in 2001, the comforting but naive assumption that economic reform would inevitably lead to political reform increasingly began to contaminate Western approaches to China.

I do not think anyone was quite so deluded as to think that the Chinese system would become exactly like the West, but the expectation was that it would evolve in the same broad direction. The disillusionment after it became clear that this was not going to happen, played no small role in shifting US-China relations from a mode in which the primary theme was engagement to one where the primary theme is now rivalry and competition.

Assuming your rival shares your values or ought to share them, can only lead to unpleasant surprises. More generally, it would be prudent not to over-emphasize values in international relations. Framing strategic competition as between ‘Democracy’ and ‘Authoritarianism’ limits rather than expands support. Not everyone regards every aspect of Western-type democracy as universally attractive, nor is every aspect of Chinese authoritarianism universally abhorrent. Values are important but interests are even more important. They are certainly more stable.

China’s misjudgments began towards the end of Hu Jintao’s second term. Xi Jinping has doubled down on them. That these errors spanned the administrations of two very different leaders suggests that their root causes are systemic and not due to the folly or mistakes of any individual. It will not be easy for any Chinese leader, however powerful, to change course.

China is a communist country. Not any longer in its ideology, but certainly in its political structure. China is a Leninist state led by a Leninist-type vanguard party that legitimates its right to rule not by class-struggle, but by an ethno-nationalist historical narrative of humiliation, rejuvenation, and the attainment of the China Dream. Positioning the China Dream as the rectification of China’s humiliation at Western hands since the late 19th century, infuses the China Dream with strong elements of revanchism and entitlement. A prominent Chinese academic has even described China’s rise as “granted by nature.”

A Leninist vanguard party insists on control over every aspect of state and society; the Party’s interests must always take priority over all other interests. This attitude is the root cause of the Chinese behaviors that many countries find concerning. Its effects are accentuated by the revanchism and sense of entitlement of the Party’s legitimating narrative, as well as the traditional Chinese assumption of superiority that equates ‘community’ and ‘order’ with hierarchy with China at the apex. Little wonder that China’s dreams are often nightmares to others.

An authoritarian state does have some advantages. It is better placed to set goals and pursue them relentlessly over the long-term. A Deng Xiaoping capable of taking a cold hard look at his life’s work, decide it was at risk of failing, and radically change direction with minimal opposition, could not have succeeded in any Western democratic system.

But the ability to set and relentlessly pursue long-term goals is an advantage only if the goals are correct in the first place. Deng’s decision to reform and open up was correct. Mao Zedong’s Great Leap Forward and Cultural Revolution were enormous disasters, costing millions of lives. Indeed, it was the immensity of Mao’s mistakes that enabled Deng to so radically change course.

Deng introduced the principle of collective leadership to ensure that the excesses of Maoist China would not be repeated. By discarding term limits and concentrating power around himself, Xi has reintroduced something akin to a neo-Maoist single point of failure into the Chinese system. There is good reason to wonder about the quality of information being fed upwards to decision-makers.

China has insisted that the situations of Taiwan and Ukraine are not the same, and indeed they are different. Taiwan is a more important node in the global economy and more strategically important to the US and its allies in East Asia. I hope that the Chinese leadership carefully ponders why Putin so badly misjudged how easily Ukraine could be conquered and misjudged the international response to his attempt to do so.

China’s strategic dilemmas are real. Still, we should not assume that they will necessarily make China change course. China has no good options. But precisely because it has no good options, Beijing might well conclude that American, and more generally, Western, hostility is so implacable, that it is a sunk cost and that no basic adjustment of policy is necessary because it will not make any difference to how the West regards China. International opprobrium of China’s support for Russia’s aggression is in any case, at best a secondary consideration. The primary consideration for China’s leaders will be internal: can the Party admit to having made a mistake?

The coalescing of the West does not imply that a China that continues to tie itself to Russia can be isolated or ‘contained’ as the Soviet Union was contained. It has become common to describe US-China competition as ‘a new Cold War’. This is an intellectually lazy trope that fundamentally misrepresents the nature of the competition.

The US and the Soviet Union led two different systems which were connected only at their margins. The US-Soviet competition was over which system would prevail. The US and China are both vital components of one global system. Russia too is part of the same system, but a relatively minor part, except for energy. The US and China, and all other components of the global system, are connected by a web of supply chains of scope, of a density, and of complexity, never before seen in history.

These supply chains are what distinguish 21st century interdependence from earlier periods of interdependence. Disentangling them is no easy matter. Just as it is easier for China to talk about becoming more self-reliant than to do it, it is easier for the West to talk about diversifying supply-chains to become less dependent on China than to do it. The global web of supply chains is unlikely to bifurcate across all sectors, although partial bifurcation has already occurred in some sectors and more bifurcation is likely in sectors that have national security implications. But complete across-the-board separation into two systems is highly improbable.

The US and China will continue to compete within this single global system. Competition within a single system is fundamentally different from competition between systems. Competition within a single system is about occupying a position that will enable you to benefit from interdependence, while mitigating your own vulnerabilities and exploiting your rival’s vulnerabilities. It is about using interdependence as a tool of competition.

Competition within a system is not and cannot be about one system displacing another system. It cannot even be about any vital part of the system disrupting any other vital part of the system in any way that could fundamentally damage the entire system. In this kind of complex, non-binary competition, it is as impossible to ‘contain’ China as to contain yourself.

None of this means that the geopolitical and intellectual shifts catalyzed by the Russian invasion of Ukraine can be disregarded by China. Broad global geopolitical trends are moving in directions that Beijing will not find comforting. Ukraine has underscored the importance of regional balances and the vital role of US leadership in such regional balances.

Even if not every country was prepared to say so explicitly, anxieties about China had always made Asia more aware of this strategic reality than other regions. This strategic reality is now clear in Europe, and will eventually dawn on countries in the Middle East as well. No country may be without some reservations about the US, but nobody has any real strategic alternative because without the US as a backstop, there is no regional balance to China or Russia or for that matter, Iran.

At the same time, the nature of US leadership is in the midst of a long-term redefinition. Russia is a dangerous adversary; China is a formidable competitor, but neither poses an existential threat to the US in the way the Soviet Union posed an existential threat. Competition within a single system cannot be existential because it takes place within a common framework; it is not about changing the framework. Whatever we may think of them, it would be absurd to harbor the same kinds of hopes or fears about the Chinese system or the Russian system as those who once hoped or feared that communism would replace capitalism. Without an existential threat, there is no reason why Americans should any longer bear any burden or pay any price to uphold international order.

This is the thread that links the Clinton administration through the Obama and Trump administrations to the Biden administration. With the George W. Bush administration as an exception forced by 9/11, the chief priorities of all the other administrations were domestic. This is not the ‘retreat’ from the world or neo-isolationism that some have portrayed, but a recalibration of the terms of America’s engagement with the world.

More than fifty years ago, as part of the process of disentangling itself from intervention in Vietnam, the 1969 Guam Doctrine heralded the US moving from direct intervention in Asia to being the offshore balancer. The US has been remarkably consistent in the offshore balancer role ever since. I believe a similar shift in the American strategic posture is underway in the Middle East as a response to mistakes in Iraq and Afghanistan. Sooner or later this change of posture will take place in Europe too, delayed but not diverted by the Russian invasion of Ukraine.

An offshore balancer is not in retreat, but demands more of its allies, partners, and friends in terms of sharing the burdens of upholding order. The Biden administration has engaged and consulted allies, partners, and friends more than its predecessor. This is all for the good. But the US does not consult you merely for the pleasure of your company, but to ascertain what you are prepared to do with it to meet strategic and regional challenges. It is a more polite form of Trump’s transactionalism.

As AUKUS has demonstrated, Biden is prepared to go to unprecedented lengths to provide tools to allies who are prepared to step up. The last time the US shared nuclear submarine propulsion technology with an ally was more than sixty years ago.

In Southeast Asia, ASEAN has not sufficiently internalized these new realities and the hard fact that while the US under Biden will still be polite to those not prepared to step up, it will not take them seriously either. That Thailand, a formal US ally, was bypassed twice in 2021 by Secretary of Defense Austin and Vice-President Harris ought to have been a salutary lesson for all ASEAN members.

ASEAN need not – indeed should not – do everything the US wants it to do any more than it should do everything China wants it to do. But unless ASEAN finds the strategic imagination and political will to define the parameters of what it is prepared to do and, equally important, what it is not prepared to do, with both the US and China, ASEAN will be marginalized. Just insisting on your ‘centrality’ does not make you ‘central’. Nor are you really ‘central’ just because others politely call you ‘central’. The US will place more emphasis on some of its bilateral relationships in Southeast Asia and it is already beginning to do so.

Finally, Ukraine has drawn attention to the nuclear dimension of regional balances. In a speech to the Munich Security Forum before the invasion of his country began, President Zelensky struck a tragically wistful note about Ukraine giving up the nuclear arsenal it inherited from the Soviet Union in return for empty promises. He was right. Would Russia have invaded if Ukraine had a nuclear deterrent? It is too late for Ukraine, but the lesson would not have been lost on others.

In Japan, former Prime Minister Abe Shinzo has suggested that Japan should allow the US to station nuclear weapons on its territory as it does with some NATO members in Europe. Japan has in fact been quietly preparing for several decades – with American acquiescence if not complicity – for contingencies that may require it to acquire an independent nuclear deterrent. In South Korea polls show strong support for the reintroduction of American nuclear weapons on its territory and the desirability of South Korea acquiring an independent nuclear deterrent has been openly debated.

For Japan and South Korea, the impetus was North Korea’s development of nuclear and ICBM capabilities and China’s modernization of its nuclear forces. As North Korea and China develop and improve their second-strike capabilities, questions will inevitably be asked about the credibility of America’s extended deterrence, just as similar questions were asked in Europe many decades ago after the Soviet Union acquired nuclear weapons. Japan and South Korea will eventually reach the same conclusions as Britain and France, if they have not already done so.

I do not think Japan or South Korea are eager to become nuclear weapon states. Such a decision will be politically very painful and internally divisive. But however reluctantly, the inherent logic of their circumstances will inexorably lead them in that direction. The alternative is the loosening of their alliances with the US and eventual subordination to China. Such an outcome will entail so a fundamental redefinition of Japanese and Korean national identities, that the nuclear option will be the less traumatic option.

I do not know how long it will take, but sooner or later, a six-way balance of mutually assured destruction between the US, China, Russia, the two Koreas, and Japan will be established in East Asia. The process of getting from where we now are, to where I think we must eventually land, will be fraught with tensions and even danger. But the end result will be stabilizing for the region.

Independent nuclear deterrents will keep Japan and South Korea within the US alliance system. With India and Pakistan in the equation, a multipolar nuclear regional balance will freeze the existing configuration of the Indo-Pacific, preventing its domination by any single major power. A multipolar Indo-Pacific maximizes maneuver space for ASEAN and other small countries.

This is not the kind of multipolarity that China favors. Nuclear weapons are great equalizers. In so far as the China Dream is a dream of hierarchy with China at the apex, a multipolar nuclear balance will force Beijing to temper – de facto if not de jure – such ambitions. This will make for healthier relationships between China and its neighbors.

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