When China Rules the World (57 page)

The significance of China’s African mission is enormous. Its rapidly growing influence suggests that in due course it will probably become the dominant player on the continent, and serves as a bold statement of China’s wider global intentions. The speed of China’s involvement in Africa, and its success in wooing the African elites, has put the West on the defensive in a continent where it has a poor historical record.
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Unlike the ‘scramble for Africa’ in the late nineteenth century, which generated bitter intra-European rivalry, China’s involvement has not as yet produced significant tensions with the US, Britain or France, though that could change. The recent establishment of the United States Africa Command to coordinate its military relations and activities on the continent suggests that it is concerned about China’s growing influence; as of late 2008, however, the US had failed to find an African location for its headquarters, stating that it would be based in Stutt gart for the foreseeable future. Apart from the rather more attractive terms that China offers African countries, one of the reasons for its remarkable progress on the continent is that it does not carry the same kind of historical baggage as the West, a fact which it regularly stresses. In this context China has emphasized that Zheng He’s voyages to East Africa in the early fifteenth century sought no territory and took no slaves, in contrast to the Europeans. More importantly, during the Maoist period China was, in contrast to the West, a staunch supporter of the African independence movements. Thus China, with its own experience of colonization, its anti-colonial record and its status as a developing country, has more legitimacy and enjoys a greater affinity with the African nations than does the West.
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This is reflected in the fact that in the 2007 Pew Global Attitudes Survey, for example, respondents in ten African countries expressed far more favourable attitudes towards China than they did towards the United States.

Nearly two-thirds of the world’s proven oil reserves are concentrated in the Arabian Gulf, with Saudi Arabia controlling over a quarter, and Iraq and Kuwait sharing a little under a quarter. These three countries control about half of the world’s known oil reserves. Another potentially large producer in the region, Iran, accounts for a little under a tenth of world oil reserves. The Gulf States are responsible for nearly 40 per cent of world crude oil exports, with Saudi Arabia’s share around 12 per cent and Iran’s 7 per cent. China became a net importer of oil products in 1993 and of crude oil in 1996.
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It is estimated that by 2020 China will have to import in the range of 57-73 per cent of its oil requirements.
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China first became seriously concerned about its future oil supplies during the 1990s and as a result began to take steps to ensure their reliability. Until 2006 its biggest single supplier was Saudi Arabia, but Iran is also very important. It would therefore be natural for China to seek a much closer relationship with the Middle East. Unlike Africa, however, the region is regarded by the Americans as its sphere of influence. The US has become increasingly embroiled in the Middle East over the last thirty years, building extremely close relations with Israel and Saudi Arabia in particular, and becoming involved in two Gulf Wars with Iraq, the second largest oil producer, with the invasion in 2003 culminating in the country’s occupation. The Chinese, as a consequence, have trodden very warily in the region for fear of antagonizing the United States, whose relationship, ever since the reform period began, it has prioritized over all others. In contrast to Africa, which has clearly now assumed a central importance in its foreign policy, China regards the Middle East, as a result, as of only second-tier significance.
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Over the last few years it has employed various strategies to try to secure its oil supplies from the region. It has sought to negotiate long-term energy supply arrangements, most notably a ‘strategic oil partnership’ with the Saudis in 1999;
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Chinese oil companies have tried to gain rights to invest and develop oilfields in the region; and, finally, China has encouraged companies in the Gulf to invest in Chinese refineries in order to try to promote closer links.
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At the heart of China’s strategy in the Middle East lies Iran, with which it has long enjoyed a close relationship. The two countries have much in common. They are both very old civilizations with rich histories of achievement and a strong sense of superiority towards other states in their respective regions. They have also both suffered at the hands of the West, which they deeply resent, believing they would prosper rather more in a world no longer dominated by it. Although interests rather than attitudes have primarily driven their relationship, there is a certain sense of affinity between the two countries.
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As an emergent global power, China naturally seeks friendly relations with more powerful states as this in turn is likely to enhance its own influence,
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and Iran very much falls into this category. China nevertheless has acted cautiously in its relationship with Iran, concerned to preserve its international reputation in the face of the militant Islamic ideology of the Iranian regime post-1979. The single most important constraining factor in China’s stance towards Iran, however, has been the attitude of the United States. China has walked a skilful diplomatic tightrope, at times cooperating with Iran in ways contrary to US policy and at other times cooperating with the United States in ways contrary to Iranian policy. Until quite recently it managed to thwart American attempts to impose economic sanctions on Iran and it successfully resisted efforts to excommunicate Iran after it had been branded as a member of ‘an axis of evil’ by the Bush administration.
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China’s economic relationship with Iran began to grow after the departure of the US and UK following the 1979 Revolution. The key to their blossoming partnership has been China’s export of large quantities of high-tech capital goods, engineering services and arms to Iran in exchange for oil and raw materials, with trade between the two countries growing extremely rapidly during the 1990s.
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In 2003 two major Chinese motor vehicle manufacturers established production plants in Iran. China negotiated a major package of oil deals in 2004, as a result of which it became a major stakeholder and one of the largest foreign investors in the Iranian oil industry, in addition to Iran being one of its biggest suppliers of oil.
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And it signed a further major agreement in 2007 to develop part of the giant Yadavaran oilfield.
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The future of China’s relationship with Iran is open-ended. China remains constrained by the need to maintain good relations with the United States, and nowhere are American sensitivities greater than in the Middle East. The US regards Iran as an alternative power broker in the region and a major potential threat to its interests - hence its long-running hostility towards Iran. In the long run, China would probably be content to see Iran playing a major, perhaps even dominant, role in the Gulf region, given that it will be a long time, if ever, before China itself could perform such a role; every global power needs allies and Iran is China’s natural ally in the Middle East. As the international relations expert John Garver argues, a dominant China in East Asia combined with a dominant Iran in West Asia could ultimately become ‘a central element of a post-unipolar, China-centred Asia in the middle of the twenty-first century’.
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Possibly China is thinking in these terms for a future multipolar system.
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Meanwhile, in order to keep its options open, China is likely to continue to help build up Iran while seeking not to antagonize the United States. The desire of the Obama administration to bring Iran in from the cold could make life easier for the Chinese on this score.

There are other possible long-term scenarios. China’s highest priority is Taiwan, and the biggest obstacle in the way of reunification is American military support for the island. The most likely cause of military conflict between China and the US is Taiwan; and in the event of war, China would be extremely anxious about the security of its maritime oil supply routes, especially in the Malacca Strait and the South China Sea, which could easily be severed by the US’s superior air and naval power. In such an eventuality, Iran could at some point offer the possibility of a land-based supply route from West to East Asia. But there is another possible future scenario, namely that China and the US could arrive at some kind of trade-off involving Taiwan and Iran in which the US agrees to stop sending weapons to Taiwan and China volunteers to do the same with Iran. In effect, China would agree to sacrifice Iran in return for Taiwan, its greater foreign policy priority. Such a deal would represent a tacit recognition that East Asia was China’s sphere of influence and the Middle East, America’s.
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During the 1980s, after two decades of bitter antagonism, China’s relations with the Soviet Union began to improve. It was the collapse of the Soviet Union in the early nineties, however, that was to provide the conditions for a complete transformation in the relationship between the two countries. Russia became a pale shadow of its former Soviet self, with only half of its former GDP and less than half of its previous population, though still with around 80 per cent of its old territory.
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Meanwhile, China embarked on its reform programme and enjoyed non-stop double-digit growth. Together, these two developments represented a huge shift in the balance of power between the two countries, with China now in a far more powerful position than its erstwhile rival. During the nineties the two countries finally agreed, after centuries of dispute, on a common border, which, at 2,700 miles, is the longest in the world. From being a highly militarized region, the border became a centre of trade and exchange. The resolution of the frontier issue enabled Russia and China to withdraw large numbers of troops from either side of the border, Russia to Chechnya and (in response to NATO’s expansion) its Europe-facing territory, and China to the Taiwan Strait.
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In the steadily improving atmosphere between the two, they established, along with several newly independent Central Asian nations, the Shanghai Cooperation Organization, for the purpose of promoting collaboration and improving security in the region. A shared, overarching Sino-Russian concern about the overweening power of the United States in the post-Cold War world, with Russia feeling particularly vulnerable following the collapse of the Soviet Union and China relatively isolated after Tiananmen Square, was a major factor in the signing of a strategic partnership agreement between the two countries in 1998.
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Nonetheless, there must be severe doubts as to the strategic potential of their relationship. The underlying problem is Russia’s sense of weakness, on the one hand, and China’s growing strength, on the other. Although the rapprochement had much to do with Russia’s sense of vulnerability following the collapse of the Soviet Union and its desire to make peace with its neighbours, that frailty also left it feeling insecure and suspicious of China. The most obvious expression of this anxiety is to be found in the Russian Far East, where a population of a mere 7.5 million confronts a population of 112 million in the three provinces of China’s north-east. Now that the border has been made porous, numerous Chinese have crossed into Russia to seek work and ply their trade. In 1994 Russian estimates put the number of Chinese residents in Russia’s Far East at 1 million, compared with a Chinese estimate of less than 2,000. According to some demographic projections, Chinese could be the second largest minority ethnic group in the Russian Federation by 2051. Exacerbating these fears is the demographic crisis facing Russia since the collapse of the Soviet Union, with one estimate suggesting that its population will fall by 3 million between 2000 and 2010 to 142 million.
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The Russian fear of being overrun by Chinese immigration speaks both of old prejudices and new fears. The size of the Chinese population tends to arouse these anxieties elsewhere, but they are compounded in Russia’s case by a long history of prejudice and conflict, the huge demographic imbalance between the two countries, and their long border.

The fact that Russia is rich in oil, gas and many other commodities - as well as being its major supplier of weapons - clearly makes it a very attractive partner for China. But Russia has proved a difficult collaborator, loath to meet its needs, certainly on the terms desired by China. In a long-running saga over the route of a new Russian east-west oil pipeline, with Russia reluctant to concede that it should go to China, as proposed by the Chinese, an agreement was finally reached in February 2009 that there would indeed be a branch to China, in return for Chinese loans to Russian firms.
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The Russians are wary of becoming trapped in a relationship with China where they are reduced to being the provider of raw materials for their economic powerhouse neighbour.
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Since the turn of the century, indeed, the Russians have become increasingly protective of their oil and natural gas interests, aware that, in its weakened state, these are hugely their country’s most valuable assets, especially in a global market where prices, until the credit crunch, were moving rapidly in their favour. Having rolled back American, European and Japanese stakes in its oil industry, Russia is hardly likely to grant Chinese oil companies a similar interest in the future. Moreover, having embraced resource nationalism under Vladimir Putin, Russia is now driving very hard bargains over its oil and gas with both Europe and its former territories. The Russian suspicion of Chinese intentions extends to the Central Asian nations that previously formed part of the Soviet Union. Russian sources, it has been reported, revealed in August 2005 that one reason for Moscow’s haste in seeking to enter the former American base at Karshi Khanabad in Uzbekistan is that China had made discreet expressions of interest in acquiring it themselves.
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China has found itself confronted with many obstacles in its desire to acquire oil interests in Central Asia, even in Kazakhstan, where it has its only major oil stake in the region; the considerable resistance and suspicion would seem to have been encouraged by Russia, which regards Central Asia as its rightful sphere of influence.
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