War by Other Means

by Robert D Blackwill

  219. Jeremy Page, “Pakistan Looks to China for Big Energy and Infrastructure Projects,” Wall Street Journal, February 18, 2014.

  220. See, e.g., “The Grand Design of China’s New Trade Routes.”

  221. Kamran Haider and Khurrum Anis, “Heat Wave Death Toll Rises to 2,000 in Pakistan’s Financial Hub,” Bloomberg Business, June 24, 2015; “China’s Ambitious Silk Road Vision.”

  222. Page, “Pakistan Looks to China for Big Energy and Infrastructure Projects.”

  223. Dan Markey, “Reorienting U.S. Pakistan Strategy: From Af-Pak to Asia,” Council Special Report no. 68, Council on Foreign Relations, January 2014.

  224. Pir Zubair Shah, “What Are the Implications of Growing Pakistan-China Commercials for the United States?,” Ask CFR Experts, Council on Foreign Relations, May 24, 2013.

  225. Jane Perlez, “Rebuffed by China, Pakistan May Seek I.M.F. Aid,” New York Times, October 19, 2008. And see Kabraji, “The China-Pakistan Alliance.”

  226. David Blair, “China Blocks £2 Billion in Aid to India,” Telegraph, May 19, 2009.

  227. “China Blocks ADB Indian Loan Plan,” Financial Times, April 10, 2009.

  228. Dhruva Jaishankar, “Eeny, Meeny, Miney, Modi: Does India’s New Prime Minister Actually Have a Foreign Policy?,” Foreign Policy, May 19, 2014.

  229. Dániel Balázs, “Monsoons on the New Silk Road,” Foreign Policy, June 23, 2015.

  230. “Wary of Chinese Advances, Narendra Modi Woos Neighbours,” Economic Times, June 13, 2014.

  231. Jayanth Jacob, “ ‘Look East’ Policy Is Now ‘Act East,’ ” Hindustan Times, October 4, 2014.

  232. Niranjan Sahoo, “Decoding Modi’s Foreign Policy,” Carnegie Endowment for International Peace, September 23, 2014.

  233. Ibid.

  234. And as an editorial in the Economic Times put it, “Mr. Modi, who is keen on strengthening economic links with China, is clearly alert to reactions in Beijing were Tokyo to be his first port of call.” “Wary of Chinese Advances, Narendra Modi Woos Neighbours.”

  235. Kabraji, “The China-Pakistan Alliance.”

  236. Manish Chand, “Why China Is Wary of India-US Statement on South China Sea,” India Writes, www.indiawrites.org/diplomacy/why-china-is-wary-of-india-us-statement-on-south-china-sea.

  237. Modi’s May 2015 visit to China came with business deals estimated at more than $20 billion, but there were no public remarks on China’s Belt and Road initiative. As one press report summarized the omission, “Apparently, the significant shortcomings of China’s current approach towards India’s maritime aspirations and Indian concerns about the security implications of the [Belt and Road initiative] have resulted in Modi’s reluctance to praise the project as it is presently conceived. The [Belt and Road initiative] would project Chinese power in the Indian Ocean in ways that Indians could view as undermining their country’s security.” Dániel Balázs, “Monsoons on the New Silk Road,” Foreign Policy, June 23, 2015. See also C. Raja Mohan, “Chinese Takeaway: Not So Coy,” Carnegie Endowment for International Peace, October 8, 2014.

  5. Geoeconomic Strength in Beijing and Beyond

  1. Christopher Bodeen, “Norway Snub Shows Sharp Edge of Chinese Diplomacy,” Associated Press, October 28, 2013. As of spring 2014, relations are still frozen. See Ben Blanchard, “China Approves of Norwegian Leaders Not Meeting Dalai Lama,” Reuters, April 28, 2014.

  2. Isaac Stone Fish, “Kow-towing to Beijing and Stiff-Arming the Dalai Lama,” Foreign Policy, May 10, 2014. “Of course I would meet the Dalai Lama,” Thorning-Schmidt said in a 2007 book written by Noa Redington. And two years later, when Danish prime minister Lars Løkke Rasmussen met the Dalai Lama, Thorning-Schmidt criticized her predecessor for taking the meeting in a “private” capacity and not an official one. “He should meet with the Dalai Lama as prime minister,” Thorning-Schmidt said after the May 2009 meeting. “Dalai Lama Stiffed by Danish Leaders,” Local DK, February 9, 2015.

  3. Ibid.; Andreas Fuchs and Nils-Hendrik Klann, “Paying a Visit: The Dalai Lama Effect on International Trade,” paper presented at Silvaplana, July 2010, http://www.econ.cam.ac.uk/dae/repec/cam/pdf/cwpe1103.pdf.

  4. Louis Charbonneau, “U.N. Nations Condemn Syria; Russia, China Seen Isolated,” Reuters, August 3, 2012. After the vote at the UN, as if to reward countries that voted in a manner consistent with China’s stance on Syria, Beijing agreed to finance and build the $30 billion Great Canal of Nicaragua, awarded more oil-backed loans for construction projects in Angola, and in Central Asia opened a pipeline running through Turkmenistan, Uzbekistan, and Kazakhstan into China’s northwestern Xinjiang province.

  5. See, e.g., Chapter 3, which discusses restrictions Riyadh placed on military aid to Lebanon prohibiting Lebanon from purchasing American products. Mark Mazzetti, Eric Schmitt, and David D. Kirkpatrick, “Saudi Oil Seen as Lever to Pry Russian Support from Syria’s Assad,” New York Times, February 3, 2015.

  6. See Simone Orendain, “Philippines Aims to Drill in South China Sea,” Voice of America News, January 23, 2013. As Orendain explains, British-based Philippine energy company “Forum began preliminary work to assess the area’s potential reserves, but in early 2011 workers said they were chased away by Chinese vessels.… Manuel Pangilinan, chair of Philex Petroleum, which has a 65 percent stake in Forum Energy, is eyeing a partnership with the state-owned China National Offshore Oil Corporation (CNOOC) to drill in Reed Bank. ‘There are no oil rigs in this country that are owned by Filipinos. So your options are only two: one, damn the torpedoes and send the [foreign] vessel in and see what happens,’ Pangilinan said … [or] have a commercial arrangement with a Chinese company.” In June 2012, Pangilinan told reporters, “We really need someone with experience and technology—someone who has done it before like CNOOC, Shell, or Exxon Mobil.… We really need a foreign partner to develop the gas field so I guess the most logical is a Chinese company.” See Doris Dumlao, “Pangilinan Brings in Chinese to Disputed Recto Bank Oil Exploration Group,” Philippine Daily Inquirer, June 24, 2012. See also “Filipino Group Says China Firm Vital for Gas Project,” AFP News, January 23, 2013: “The consortium opened talks with state-run China National Offshore Oil Corp. (CNOOC) last year, and its head insisted on Thursday that it was negotiating solely with the Chinese group to be a partner in the mega-project. ‘I think at the moment, the discussion would have to centre between the two of us,’ tycoon and consortium leader Manny Pangilinan told reporters. ‘We don’t want to be talking to anyone apart from CNOOC at this stage. We want to make that clear,’ he said, adding that it was ‘because of China. That is the reality we have to deal with.’ He said: ‘I believe China will employ all sorts of tactics—to charm you, to bully you.’ He added groups, including those from the US, have expressed ‘soft interest’ to jointly explore Reed Bank, though he stressed the inquiries were not being given serious consideration.”

  7. While BNDES primarily invests domestically, in 2013 $1.3 billion of BNDES’s $88.1 billion in lending was allocated for foreign infrastructure projects. See “Increased BNDES Lending for Projects Abroad Draws Criticism,” Murray Advogados, São Paulo, Brasil, April 14, 2014, http://murray.adv.br/en/383/increased-bndes-lending-for-projects-abroad-draws-criticism.

  8. Author interview, April 2014.

  9. Peter Baker and Steven Erlanger, “Russia Uses Money and Ideology to Fight Western Sanctions,” New York Times, June 7, 2015. “Russia appears to be getting some traction lately in countries like Greece, Hungary, the Czech Republic, and even Italy and France. Not only is it aligning itself with the leftists traditionally affiliated with Moscow since the Cold War, but it is making common cause with far-right forces rebelling against the rise of the European Union that are sympathetic to Mr. Putin’s attack on what he calls the West’s moral decline.”

  10. Mark Mazzetti, C. J. Chivers, and Eric Schmitt, “Taking Outsize Role in Syria, Qatar Funnels Arms to Rebels,” New York Times, June 20, 2013.

  11. Blake Hounshell, “The Qatar Bu
bble,” Foreign Policy, April 23, 2012.

  12. Elizabeth Dickinson, “The Case against Qatar,” Foreign Policy, September 30, 2014.

  13. Ibid.

  14. Ibid; Anne Gearan, “Egypt and UAE Strike Islamist Militias in Libya,” Washington Post, August 25, 2014; David Kirkpatrick and Eric Schmitt, “Arab Nations Strike in Libya, Surprising U.S.,” New York Times, August 25, 2014.

  15. “The Case Against Qatar,” Foreign Policy, September 30, 2014, http://foreignpolicy.com/2014/09/30/the-case-against-qatar/.

  16. Andrew Gilligan, “How Our Allies in Kuwait and Qatar Funded Islamic State,” Telegraph, September 6, 2014.

  17. Ibid.

  18. An agreement made during Anastasiades’s trip to Moscow allowed Russian warships to dock in Limassol, while Cypriot officials suggested that Russia may also win offshore drilling rights in a hotly contested bidding process. Andrew Higgins, “Waving Cash, Putin Sows E.U. Divisions in an Effort to Break Sanctions,” New York Times, April 6, 2015. Jon Rosen, “Wither the ‘King of Kings?’ How Qaddafi’s Battle for Libya Will Impact Africa,” The International Relations and Security Network, April 26, 2011, http://www.isn.ethz.ch/Digital-Library/Articles/Detail/?lang=en&id=128561.

  19. Graham Allison and Robert D. Blackwill, Lee Kuan Yew: The Grand Master’s Insights on China, the United States and the World (Cambridge, Mass.: MIT Press, 2013), 4–6.

  20. See Chapter 4 for details, particularly the discussion on cross-strait trade agreements.

  21. Here it is important to note an equally strong link between China’s economic tendencies and domestic issues. Amid talk of economic reforms under President Xi Jinping, a report addressing human rights and rule of law in China highlights that “China is no closer to granting its citizens basic human rights than when China entered the World Trade Organization nearly 12 years ago.” Congressional-Executive Commission on China, “2013 Annual Report,” October 10, 2013.

  22. “Desperately Seeking Space,” Economist, July 13, 2013.

  23. “Japan Reports Worst September Trade Figures in 30 Years,” Telegraph, October 22, 2012. At the time, Toyota, Japan’s biggest automotive company, and others were the target of this political fomentation. “Toyota said sales of new vehicles in China dropped 48.9% in September [2012] from a year earlier to 44,100 vehicles. Honda said that September sales plunged 40.5% to 33,931 vehicles. China sales for Nissan slid 35% last month to 76,100 vehicles.” Associated Press, “Japanese Car Sales Plunge in China after Islands Dispute,” Guardian, October 9, 2012.

  24. Emphasis added. “China-Japan Trade Volume Drops after Dispute on Islands,” World Bulletin, January 22, 2014.

  25. Ibid. It is unclear how the foreign firm obtained the license.

  26. Alec Luhn, “Russia Closes McDonald’s Restaurants for ‘Sanitary Violations,’ ” Guardian, August 20, 2014; Carol Matlack, “Putin’s Latest Target: More than 200 Russian McDonald’s,” Bloomberg Businessweek, October 20, 2014; Anthony Cuthbertson, “Apple iPhone and iPad ‘Banned in Russia,’ from 2015,” International Business Times, November 5, 2014.

  27. Simon Denyer, “U.S. Companies Feel a Chill in China, Even as Many Still Rake in Profits,” Washington Post, July 4, 2014; Mark Schwartz, “A BIT of Help for the U.S. and China,” Wall Street Journal, April 2, 2014.

  28. Paul Eckert and Anna Yukhananov, “U.S., China Agree to Restart Investment Treaty Talks,” Reuters, July 12, 2013; Schwartz, “A BIT of Help for the U.S. and China.”

  29. “Ease of Doing Business in China,” data collected by International Finance Corporation and the World Bank, 2014, http://www.doingbusiness.org/data/exploreeconomies/china.

  30. Jamil Anderlini, “China: Red Restoration,” Financial Times, November 4, 2013.

  31. The CIC is responsible for $575.2 billion of China’s total foreign-exchange reserves. The CIC has made substantial investments in a variety of asset classes, including direct investments, institutional real estate and infrastructure. “China Investment Corporation,” SWF Institute, April 2013; Daniel Galvez, “China’s Increased Presence in the Developed World,” The China Analyst blog, The Beijing Axis, September 2013; see also Ashley Thomas Lenihan, “Sovereign Wealth Funds and the Acquisition of Power,” New Political Economy, April 29, 2013.

  32. In January of 2008, SAFE was used “to buy $300 million in Costa Rican government bonds … in return for Costa Rica’s severing diplomatic ties with Taiwan and establishing them with Beijing.” Jamil Anderlini, “Beijing’s Shadowy Pool for Buying Up Best Assets,” Financial Times, September 12, 2008.

  33. David E. Brown, “Hidden Dragon, Crouching Lion: How China’s Advance in Africa Is Underestimated and Africa’s Potential Underappreciated,” Strategic Studies Institute, U.S. Army War College, September 17, 2012, 37.

  34. The Chinese geoeconomic decision-making process is often understood as an “opportunistic search to lock in oil assets … [whereby] Beijing has paved the way for its NOCs by deepening comprehensive relations with countries such as Iran, Sudan, Venezuela, while Western governments have been attempting to isolate regimes in these countries.” John Lee, “China’s Geostrategic Search for Oil,” Washington Quarterly 35, no. 3 (Summer 2012): 75–92.

  35. “China’s New Courtship in South Sudan,” International Crisis Group, April 4, 2012.

  36. Realizing that Sudanese oil reserves were much more substantial than expected, American oil companies blamed the U.S. government for depriving them of a lucrative oil market, consequently pressuring the Clinton administration to change its policies so U.S. companies could operate in Sudan. Ismail S. H. Zaida, “Oil in Sudan: Facts and Impact on Sudanese Domestic and International Relations,” Universidad Autónoma de Madrid, January 27, 2007.

  37. “China and Russia Veto Zimbabwe Sanctions,” Guardian, July 11, 2008.

  38. “Zimbabwe Now a Full-Fledged Chinese Colony,” Zimbabwe Mail, November 4, 2011. Lamido Sanusi argues that “Africa must recognize that China—like the US, Russia, Britain, Brazil and the rest—is in Africa not for African interests but its own.” Lamido Sanusi, “Africa Must Get Real about Chinese Ties,” Financial Times, March 11, 2013.

  39. In providing such funding to the Zimbabwe Defence Forces, PLA chief of staff Lieutenant General Qi Jianguo also noted that Beijing “admires the ZDF … who has managed to stand against the Western machinations [who seek] to destabilize the African continent.” Oscar Nkala, “Chinese Army Donates $4.2 Million to Zimbabwe Defence Forces,” Defence Web Zimbabwe, May 8, 2014.

  40. “China-Zimbabwe-Relations,” Mainstream Weekly 49, no. 26 (June 2011); “In Zimbabwe, Chinese Investment with Hints of Colonialism,” Atlantic, June 24, 2011.

  41. Tim Johnson, “China Opposes Sanctions against Iran,” McClatchy DC, January 26, 2006.

  42. Chen Aizhu, “China Reiterates Opposition to U.S. Sanctions on Iran,” Reuters, August 2, 2013.

  43. “Case Studies in Sanctions and Terrorism,” Peterson Institute for International Economics, 2006, http://www.piie.com/research/topics/sanctions/sanctions-timeline.cfm.

  44. Ariel Farrar-Wellman and Robert Frasco, “China-Iran Foreign Relations,” AEI Iran Tracker, July 13, 2010.

  45. “Report: China Agrees to Use Oil Money for Iran to Finance $20B of Development Projects,” Associated Press, November 2, 2013; Wayne Ma, “Sanction Side-Step: Iranian Oil Flows Back Into China,” Wall Street Journal, October 24, 2013.

  46. Philippa Brant, “Charity Begins at Home: Why China’s Foreign Aid Won’t Replace the West’s,” Foreign Affairs, October 13, 2013.

  47. Emmanuel Barranguet, “China the Master Stadium Builder,” Africa Report, July 2, 2010.

  48. Axel Dreher et al., “Aid on Demand: African Leaders and the Geography of China’s Foreign Assistance,” AidData Working Paper 3, November 2014.

  49. Mark Anderson, “African Presidents ‘Use China Aid for Patronage Politics,’ ” Guardian, November 19, 2014.

  50. Sebastian Mallaby, “A Palace for Sudan,” Washington Post, February 5, 2007.

&nbs
p; 51. “Olympic Boycott Calls ‘Will Fail,’ ” BBC News, May 18, 2007; “China Defends Oil Trade with Africa,” New York Times, March 12, 2007.

  52. Mallaby, “A Palace for Sudan.”

  53. Pew Global Attitudes Project, America’s Global Image Remains More Positive than China’s: But Many See China Becoming World’s Leading Power (Washington, D.C.: Pew Research Center, July 18, 2013), http://www.pewglobal.org/files/2013/07/Pew-Research-Global-Attitudes-Project-Balance-of-Power-Report-FINAL-July-18-2013.pdf.

  54. Larry Hanauer and Lyle Morris, “China in Africa: Implications of a Deepening Relationship,” RAND Corporation, 2014, http://www.rand.org/pubs/research_briefs/RB9760.html.

  55. Elizabeth Economy and Michael Levi, By All Means Necessary (New York: Oxford University Press, 2014); Abdoulaye Wade, “Time for the West to Practice What It Preaches,” Financial Times, January 23, 2008.

  56. The World Bank committed $31.5 billion in lending in 2013; “Lending Data,” World Bank, 2013, http://siteresources.worldbank.org/EXTANNREP2013/Resources/9304887-1377201212378/9305896-1377544753431/Lending_Data.pdf. See also Henry Sanderson and Michael Forsythe, China’s Superbank: Debt, Oil and Influence—How China Development Bank is Rewriting the Rules of Finance (New York: John Wiley and Sons, 2012), 41.

  57. See Ian Taylor, China’s New Role in Africa (Boulder, Colo.: Lynne Rienner, 2009). Also see Audra Ang, “China Defends Dealings with Africa,” Washington Post, October 31, 2006; and Xinhua, “China Africa Development Fund Hits $5 billion” China Daily, December 5, 2015, http://www.chinadaily.com.cn/business/2015-12/05/content_22634863.htm.

  58. Sanderson and Forsythe, China’s Superbank, 97.

  59. Ibid., 99.

  60. Arthur Brice, “Iran, Hezbollah Mine Latin America for Revenue, Recruits, Analysts Say,” CNN, June 3, 2013; Adam Kredo, “The Iran, Hezbollah, Venezuela Axis,” Washington Free Beacon, March 22, 2013.