20110315 Even China could get sucked in

Even China could get sucked in

By Nathan Novak 李漢聲

The recent protests and upheaval in several North African states signaled not only the changing of the political guard in Tunisia and Egypt, but also popular discontent in Libya, which has spilled over into civil war. Also evident was the growing willingness and ability of China’s People’s Liberation Army Navy (PLAN) and People’s Liberation Army Air Force to intervene and evacuate Chinese nationals from unstable and violent political situations abroad.

These evacuations, coupled with the PLAN’s growing presence in the Indian Ocean, as well as its involvement in ongoing anti-piracy operations in and around the Gulf of Aden, have stirred debate among politicians, military analysts and international relations academics. A report by Gabe Collins and Andrew Erickson in last Thursday’s issue of China Brief (published by The Jamestown Foundation) reconsiders China’s military activities abroad and returns to the question: What are the implications of these Chinese overseas military activities?

As Collins and Erickson point out, the evacuations represent a continuing improvement in the Chinese military’s ability to operate far from home. Indeed, both the anti-piracy operations and the evacuations demonstrate Beijing’s willingness to conduct operations in international waters and foreign territories to protect Chinese nationals and national interests.

Although Beijing’s official spending on military, equipment, tactics and experience may be far behind that of other nations, particularly the US, and China’s willingness and capability to become involved in foreign wars may still be a hot topic both within and outside China, the possibility that Beijing may become embroiled in a foreign war in the near future certainly exists — and is probably on the rise. A stray bullet in Libya may very easily have ignited an international crisis that, considering the hyper-nationalist sentiments displayed within certain policy, military and academic communities in China, not to mention the populace at large, could very easily have propelled Beijing into a conflict.

In this context, it is easy to understand why Beijing repeatedly calls for security and stability in foreign nations. Not only are such calls in sync with China’s own domestic policies, but they also express its desire to avoid conflict during a period in which the country’s military capabilities are improving, but are not fully prepared to deal with crises abroad.

However, crises abroad are just what Beijing may face in the near future. According to a recent study done by Derek Scissors of the Heritage Foundation, which accounted for Chinese outward non-bond foreign investments between 2005 and last year, a very sizeable portion of China’s outward foreign investment interests are located in potential political hotspots, such as Central and South Asia, the Middle East and North Africa. Although the US, Australia and several European countries also receive a large amount of Chinese non-bond investment, relative political stability in these countries implies that any risk to Chinese investment there would probably come from nation-to-nation conflicts — for example, a Sino-US conflict over Taiwan — and not internal political strife to the scale witnessed recently in North Africa.

Arguably, Chinese leaders should be concerned about their investments in nations with records of civil conflict. Investments in Iran, estimated by Scissors at more than US$15 billion and heavily concentrated in the energy sector (as discussed in Erica Downs and Suzanne Maloney’s “Getting China to Sanction Iran” 2001 article in Foreign Affairs), are of particular note, considering the popular protests which occurred in Tehran after the 2009 Iranian presidential election and protests that have occurred periodically since.

Although Collins and Erickson argue that the real danger exists not in situations where large national corporations are present (since “workers who live in the compounds of major companies can be located relatively easily and their evacuations arranged accordingly”), but rather for “[i]ndependent businessmen and traders” who are more difficult to locate in the foreign country, one also has to consider a situation in which Chinese corporations — most of which are state-owned — in general are targeted.

As Downs and Maloney point out, Iranians are ambivalent about Chinese economic activities in Iran and there is growing antipathy regarding China’s increasing dominance in the Iranian market. If a protest were to turn decidedly anti-Chinese for whatever reason, it would be far less risky to attack a private Chinese citizen, but far more provocative, depending on protesters’ objectives, and quite a bit more to the point to attack a Chinese state-owned company.

Other risky investment destinations include Kyrgyzstan, Uzbekistan and Tajikistan, where although relatively amicable relations between these nations and China exist via their multilateral relations as members of the Shanghai Cooperation Organisation (SCO), China’s growing economic clout in these relatively weak economies coupled with domestic political instability in Central Asian countries may ignite a firestorm.

Energy investments in Sudan, itself no stranger to political, ethnical and religious violence, is another potentially large risk. With South Sudan set to secede on July 9, violence is certainly not out of the question in the near future. Chinese dealings in Nigeria (estimated at US$15.4 billion), Algeria (US$9.2 billion) and the Democratic Republic of the Congo (US$5.9 billion) also pose risks and for the same reasons.

Chinese investment in these nations and others is not necessarily a negative. Most of the nations listed here are relatively underdeveloped, as well as capital and employment-starved. Chinese investment, especially considering that many of these nations have been shunned and/or sanctioned by other members of the international community, may very well be welcomed — although as the Iranian example points out, dissatisfaction with domestic policies pose the threat of spilling over into other policy areas.

If a situation were to occur in which Chinese nationals, Chinese companies or the Chinese government itself were to become targets in the domestic politics of a foreign nation, the potential response from Beijing would be difficult to guess. If the foreign government itself were held prisoner by a dissatisfied and revolutionary populace, Beijing would be unable to count on domestic measures to “restore stability” and protect Chinese assets and nationals. China’s choices in such a situation are relatively limited and Chinese nationalists would doubtless demand that decisive actions be taken.

Thus, even though it may very well be in China’s interest to invest in and have relations with “pariah” states, especially were Beijing to go toe-to-toe militarily with, for example, Washington, such assets could arguably more easily become liabilities. The overall situation, especially considering the protests earlier this year, is not in China’s favor.

Whether an eruption of violence elsewhere that targets Chinese citizens, companies or China itself will lead to Beijing’s scrapping of its “non-interference” creed is anyone’s guess. However, as Collins and Erickson point out, talk of scrapping “non-interference” has already emerged in some Chinese political, academic and military circles. What this would mean for Asia and even the globe is also anyone’s guess.

Nathan Novak studies cross-strait relations at National Sun Yat-sen University.