U.S. CHINA FUTURE LOOKS MESSY

This year will see a worsening in relations with China as the Obama White House improves ties with India and scrambles to create a strategy to address China’s growing economic and military power.
Since he became president, Barack Obama has not shown he understands that China will use economic blackmail against the U.S. if and when it chooses. A sign that Beijing feels it can intimidate Washington came in a warning from the Chinese on January 29 that a U.S. plan to sell Taiwan a $6.4 billion arms package could hurt ties between the two nations. Implied, rather than stated, was the real possibility the hurt to the U.S. would be economic. Beijing followed up by a threat to impose sanctions on the U.S. companies supplying the arms and a promise to cancel joint military conferences.
No one doubts China’s ability to resort to economic retaliation, given it holds a massive amount of U.S. debt. Hank Paulson, the former Treasury Secretary, claims that during the height of the financial crisis in 2008, Russia tried to persuade China to dump U.S. bonds in order to generate a collapse of the U.S. economy but China refused. The Chinese may have realized such a move would have led to a global meltdown, which would not have favored China. Perhaps, China wanted to choose where and when it used its economic leverage over the U.S.
The recent gulf between the Obama administration and the Chinese further highlights again the fact that China has drawn a line in the sand over Taiwan. The Chinese response to news of the arms sale, which includes, two submarines and the latest Patriot anti-missile batteries, was a statement from China’s Vice-Foreign Minister, He Yafei that the sale represented “crude interference” in Chinese domestic affairs and harmed its national security. He added that it would damage cooperation between China and the U.S. on a range of international issues. One of those issues could well be Iran, a nation with which China does a lot of business, especially in the oil and gas sectors. China could use its position on the U.N. Security Council to oppose any U.S. proposed sanctions against Iran. It could also persuade Russia to do likewise, thereby dealing a blow to Obama’s Middle East policy. That would likely heighten tensions with an Obama White House, which is beginning to echo a neocon mantra that Iran must be chastised militarily. As Obama places more military hardware in the Persian Gulf, within range of Iran, he may find China and Russia taking a hard line in the Security Council. Former British P.M., Tony Blair, who appears to have joined the neo-conservative ranks, has speculated that the West might have to invade Iran, in the same way it invaded Iraq. Some observers in Britain think that Blair, in equating his decision to support the invasion of Iraq with any danger posed by Iran, is merely trying to give himself cover for his failed Iraq policy.
This latest controversy over the arms deal with Taiwan comes on the heels of a threat by Google to pull out of China and growing evidence that China’s cyber warriors have hacked U.S. defense networks in the past couple of years. Until now, the Obama White House has had little to say about that issue or China in general, aside from pleasant comments the president made when talking to Chinese students on a visit to Beijing last year. Before long, however, Barack Obama may find his administration facing a more serious deterioration in China relations as a bigger issue looms large on his foreign policy horizon. That issue relates to his predecessor’s strategy of cementing diplomatic, military and economic ties with India as a bulwark against Chinese military and economic expansionism – a policy Obama seems to support, if only because he has not offered an alternative.
On a purely economic level, George Bush’s wooing of India related to a recognition India offered a massive market for American exports, including arms sales. It may now prove to be the ideal place for Google to expand its Asia operations at a time when the Chinese government is curtailing internet freedoms. It may also be behind those who hacked Google networks in search of the secret algorithms that drive the massive search engine. One of the peculiarities of the Google-Beijing relationship is that Google, while is deplores Chinese censorship, allows its search engine to be used by Indian security authorities. It has even agreed to limit the kinds of searches that India believes might contravene its religious traditions. In contrast to India, however, China reckons it has good reason to be wary of Google because of its business dealings with the CIA non-for-profit venture capital firm, In-Q-Tel, previously known as Peleus. The firm’s brief is to seek out and invest in hi-tech companies with applications that could benefit U.S. intelligence gathering across a range of agencies.
But, Google aside, the Obama administration will soon find its China relations in a tailspin over Washington’s growing acceptance of India’s determination to press ahead with major upgrades of its nuclear arsenal, its navy, its armed forces and more controversially its pursuit of ant-satellite warfare. India has publicly admitted it is determined not to allow China to have an edge in space weapons.
Ever since China angered the world by shooting down one of its own satellites in January 2007, the U.S. has quietly outstripped China in developing a new range of space warfare capabilities, especially in the field of anti-satellite missiles. It is one of the most controversial and significant areas of modern weapons development because satellites are now used for targeting as well as intelligence gathering and battlefield scanning. The loss of satellites in a modern war could prove catastrophic for one of the combatants. India has recognized this and has moved ahead to develop its own anti-satellite technology. This has happened without any criticism from Washington, which feels the door to space wars was opened by the Chinese in 2007 and it cannot be closed. China is as much angered by India’s determination to develop such a capability as Washington’s silence on the matter. The Chinese claim they abandoned plans to develop such weapons but Washington refuses to believe them.
As regards the Taiwan issue, India believes it is vital for the U.S. to assert its ties to Taiwan and its policy, mostly unstated, that it will defend Taiwan if it is attacked by China. India realizes that China wants control of Taiwan so it will have a direct line of sight to the Pacific. As things stand, China feels vulnerable on the high seas because it lacks ports on the Indian Ocean and feels hemmed in by Taiwan and the Straits of Malacca. India would like to keep it that way but much will depend on whether the Obama administration creates a robust China policy as relations with China worsen in 2010.