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Monday, October 03, 2016

Destabilised Eurasia and possibility of War - The SE Asia - East Asia equation

The events of the past few weeks and years have had a decisive geo-political point to them particularly concerning South-East and East Asia. Let me enumerate a few here. 
  1. In 2015 Japanese parliament permitted their army to go aggressive( with US blessings). They have been making ships and aircraft carriers since few years ago  displayed in Aussie, Singapore, Japan and US joint exercise - small allegedly helicopter carrier or something.  
  2. Last week I was seeing Singapore Air Force Fighter planes on evening patrols. Also every day they have the another surveillance plane - it is not the boeing posiedon in the air. 
  3. On friday, India announced surgical strikes on terror bases in Pakistan Occupied Kashmir. 
  4. Last week, Singapore PM met Japanese PM Abe. Last month he met Obama. Chinese news paper is accused Singapore of siding with US. This week Singapore PM is meeting Narendra Modi.
  5. Last week Japanese PM Abe met Narendra Modi and promised him some military tech and other assistance including manufacturing assistance.
  6. Phillipines has abandoned US and is courting China. Durtete made a statement that he received encouragement from China and Russia on his anti-US remarks.
  7. Last month the International Arbitration Tribunal restrained China from claiming rights on South China Sea.
  8. Last month Austrailia published a white paper on maritime defence highlighting the need to protect the interest in the northern coasts and in the Pacific. Australia does not have any threat from any country in the Pacific save China. It is way far out and super friendly with most of the major powers. It has a love-hate relations with some island countries where China has become active.
  9. US is offering F-16 (yeah the old ones) to India for make-in-India option. (The tech is old but the offer is quite lucrative)

So what is happeneing?
China is being encircled. Japan south Korea Taiwan Singapore, Australia and India are coming together step by step. South Africa is in the mix too. Philippines has chosen to side with China - or so it seems. Vietnam is on the fence blowing hot and cold. Laos is stuck between Vietnam and China but I sense it is more pro-china. Thailand is becoming more democratic but depends on their king who is about to die or may have died. 

Since China is being encircled, it thinks it can break the mix by encircling India. China thinks it can corner India because of its alliance with Pakistan. So Pak will keep India engaged on west and china will keep it busy on the east taking India out of the equation. So a day after announcement of surgical strikes we had reports of China reducing Bramhaputra waters for dam construction.

But, on day of surgical strike Iran attacked pakistan (which is weird). Afghanistan is already sick of  Pakistan. Now Pakistan thinks it too is being encircled by adversaries. Tajikistan is not really happy with Pakistan either. But it is more worried about China. So goes for Kyrgyzstan and we come to Mongolia and Russia which surround China. 

Within China too,  in Hong Kong separatist sentiment is acting up, mostly without encouragement of the west. Then there are other prennial problems in China - including Tibet, Uyghurs and others.

So we have China trying "string of pearls" strategy around India. World trying "string of pearls" around China. 

Why India is crucial element in the mix?
India is important because it is a navy that controls the major trade routes to Europe and East america. It saves a trip across Africa. So China wants to circle indian ocean by involving Africans - twin benefits resources and strategic support. So this is a move-counter move strategy. India is but small player if you ask me. I think US is the big bro here. We are seeing Obama's east pivot in action. 

Why is China all riled up?
China is being choked economically by all - sort of as a payback for its merchentilist begger thy neighbour policy. Actually when Milton Friedman was asked about dumping of low cost products, his argument was simply it benefits the importer. It means (to me, Milton did not say it so) that after the value is over you can reverse the equations by ring-fencing the excess capacity from creating problems for you.

The second narrative Chinese use is that its almost $4Trillion US Dollar reserves may lose value and thus cause wealth loss. This narrative is easy to sell to general pulic and it will make for a good anti-US story.

This has a lot of implications for China. It may wreck it from within. An empowered peasantry   / rural-folk may bring down the corporates to its knees using exactly the same arguments that Mao used. The citizenry may become subversive when faced with no jobs, or rapid decline in wealth as a result of capacity destruction. These will be difficult to control in a country of 1.6 billion. The cost of political unrest for Chinese Communist Party is too high. That could be one reason for Chinese aggression.

The first narrative fits the bill better because of the related developments. There was no reason for announcing a "make in India" policy when there is excess global supply. Not unless the Chinese capacity was suddenly going to be unavailable. And someone could pick up the slack. Indian PM Modi saw an opportunity in this and embarked on the picking up pieces. FYI none of the Chinese investments into Make-in-India have materialized. Foxconn which promised to set up an iPhone factory has backed out. Others are mostly European and american cos who continue on.

Is China a potent threat to US?
At present China is not a threat to the US. 

It does not have a wherewithal to pick up a fight with US. At least that is the public view. China needs at least 5 aircraft carrier units to be as aggressive as they are trying to be. It has none at the moment. Big daddy US has five major assets in Pacific including Okinawa. US also has two Aircraft carrier groups in Mediterranean Sea and Indian Ocean. India has two in the Indian ocean. 

China is a threat to India. It is an ally of Pakistan and has a long border-dispute with India. India needs to be wary and after fall of Soviet Union there is no regional counter-balance. India must ally with US. There is no other way. US knows this and promoting technology transfer to Indian defence. 

China is also a threat in South China sea. It is here that US is more worried. It is claiming more land and nautical area and becoming more assertive.

The least-expected strategy for China will be to challenge US. That will be a surprise and alter the military-power equations. For this it needs some greographical spread. By itself, China has tough geography which makes it difficult for it to create big trouble that could alter global balance of power equations.

The solution - A China circle
The Chinese circle comprises China, Pakistan, North Korea, some countries in Africa, some in Pacific Oceans including Laos. These countries have received heavy Chinese aid and China supports some questionable regimes in certain regions. Phillipines is becoming a China ally. The Burmese junta enjoys some support from the Chinese.

Clearly with this motley crew China cannot take on US or other major country. But what it can do is create strategic assets in these countries from where it can create trouble. The dirty work still comes to China's share. 

The tools
If China wanted to be a credible threat it should be building at least 10 Aircraft carrier units (including cruisers, frigates, destroyers, submarines, logistics ships). A better strategy would be to build them inland somewhere in Hainan (lake) or more likely in Sichuan (totally on dry land). Then one fine day plonk these in the sea. An event like that could alter the geo-political equations quite rapidly.

Yet such kind of shifting of balance of power is not possible easily. There are pretty unpredictable players in the mix.

The no-nonsense player -Russia
Russia is sitting on the fence. The Russian approach is just like in world war 2 - corrupt but away from the mess. It will take sides when it is forced to take sides. It has hinted that it may start supplying aircrafts to Pakistan and may have helped china build their J20 fighter which is copy of the F22 raptor. Russians are playing both sides as of now. They are cooperating with the West in Arabian geographies and counter-balancing them in Asian geographies.

Their problem is that they are too close to conflicts but not too powerful to force a resolution anywhere. Even Soviet Russia would have found difficult to contain China in its present state.

Pakistan the unpredictably-unpredictable player
The issue was easy to solve if Pakistan was not a long-term US ally. Because Nehru sided with Russians, Pak went to the US and US is feeling guilty of abandoning pak even when it housed Osama. If Pakistan was just another country in the equation, the US policy would have tilted pro-India by now and we would have been in a new stable-stalemate situation. The world would be chugging along by now.

The problem is that US would always help build Pakistani capability to counter-balance India. To the US, pakistan-India parity was the policy objective. US realised it late that Pakistan was playing double game. With US technology seeping into China and the inventory falling into the terrorist hands, US realised Pakistan is not a strategic asset but a mere pawn. It is China that was the new threat.

My guess
It is possible that the China is using the uncertainity related to US presidential election to test some destabilisation strategies. They see a window of opportunity and it expires on November with elections in US as the new president (even if Trump wins) will be briefed about all important issues and most likely toe the usual line. The uncertainty will reign till November as Obama may not be able make longer term commitments right now. So we have to sit tight for 1or 2 months. This is peak of crisis as we get to see. Then big daddy will be back in the saddle and world will be back to its normal stalemate situation. If this is indeed correct, then we should see a major policy decision by the new US President immediately upon taking office. It could be a pro-India change or opening of a full-functional base in South East Asia augmenting the one in Singapore and Okinawa.

In Sum
Something is definitely going on in the SE Asia / East Asian region.