China's Strategic Interests in the South China Sea: Power and Resources

182 Pages·2013·1.797 MB·English

by  Sigfrido Burgos Cáceres

’
China s Strategic Interests in
the South China Sea
ThisbookexploresChina’sstrategicinterestsintheSouthChinaSea,withspecific
emphasis on power projection and resource security. China’s regional actions
andreactionsarereshapingpowerdynamicsinEastandSouth-EastAsia,while
economic and geopolitical futures depend on the variegated outcomes of these
complexanditerativerelationshipswithneighbouringcountriesandtheUSA.
The Introduction assesses China’s external and internal dynamics and
influences, examines China’s search for energy and resources, and looks at
China’s oil security through the lenses of diplomacy and economics. The
Country Case Studies explore China’s relationships with Japan, the Phi-
lippines, the USA and Vietnam with regards to claims, disputes, conflicts and
strategic interests in the South China Sea. The Conclusion incorporates
insights and builds on a number of factors and issues to produce a better
understanding of the incentives, motivations and rationales that propel China
to project power and secure resources in the South China Sea.
Key features:
(cid:1) offersanin-depthanalysisofChina’sstrategicinterestsintheSouthChinaSea;
(cid:1) assists scholars and students in understanding Chinese relationships with
neighbouring countries;
(cid:1) explains China’s power projection and its implications on US economic
and security pacts;
(cid:1) explores the links between peace, prosperity and security, and the acts
supporting these goals.
Sigfrido Burgos Cáceres is a consultant specializing in international develop-
ment, political economy and foreign affairs. From 2007–12 he was based in
Rome,Italy,attheFoodandAgricultureOrganizationoftheUnitedNations.
He has published peer-reviewed journal articles on China’s natural resource
questsinAfrica,South-East Asia, South America and globally. Together with
SophalEarheco-authoredTheHungryDragon:HowChina’sResourceQuest
Is Reshaping the World (Routledge, 2013). He lives in Mobile, Alabama, with
his wife.
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’
China s Strategic Interests in the
South China Sea
Power and resources
Sigfrido Burgos Cáceres
Firsteditionpublished2014
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China'sstrategicinterestsintheSouthChinaSea:powerandresources/
SigfridoBurgosCáceres.–Firstedition.
pagescm
Includesbibliographicalreferencesandindex.
Summary:"ExploresChina'sstrategicinterestsintheSouthChinaSea,with
aspecificemphasisonpowerprojectionandresourcesecurity.Contains
sectionsonChina'spowerandresourcesandcasestudiesonJapan,
Vietnam,theUSAandthePhilippines,anddiscusseshowChina'sactions
arereshapingthepowerdynamicsinEastandSouth-EastAsia"–Provided
bypublisher.
1. China–Strategicaspects.2. SouthChinaSea–Strategicaspects.3.
Nationalsecurity–China.4. Sea-power–China.5. China–Foreign
relations–21stcentury.6. Energysecurity–China.7. Naturalresources–
China.8. Naturalresources–SouthChinaSea. I.Title.
UA835.B862013
355'.033051–dc23
2013022046
ISBN:978-1-85743-709-6(hbk)
ISBN:978-1-31587-933-8(ebk)
TypesetinTimesNewRoman
byTaylor&FrancisBooks
EuropaCommissioningEditor:CathyHartley
EditorialAssistant:AmyWelmers
Contents
Preface vii
Acknowledgements x
Acronyms and abbreviations xi
PARTI
Introduction 1
1 Assessing China’s external and internal dynamics
and influences 3
2 Understanding China’s global search for energy
and resources 24
3 China’s oil security: diplomacy, economics and the prospects for
peaceful growth 45
PARTII
Country case studies 57
4 Japan 59
5 The Philippines 74
6 The United States of America 81
7 Vietnam 104
PARTIII
Conclusion 119
8 Power projection 121
vi Contents
9 Resource security 132
Bibliography 143
Index 155
Preface
This bookexamines the People’s Republic of China’s strategic interests in the
South China Sea, and focuses on power projection and resource security.
Certainly, China pursues other strategic interests, but in order to make this
book a manageable endeavour it discusses chiefly the topics of power and
resources while making connections to economics, governance, national
security, politics and society. It takes a close look at how dynamics in these
multidimensionaldomains affect thedrafting ofstrategies and policy-making,
and the influence they have on state actions.
China is a large, populous country that is unique owing to its salient fea-
tures: the Chinese Communist Party; accelerated economic growth resulting
from low-cost labour; trade openness; domestic consumption and urbaniza-
tion; rapid industrialization and strong support for exports; autocratic capit-
alism; one-party rule and political repression; one-child policy; censorships;
and firm government control of a large number of aspects of Chinese socio-
cultural life. The latter also extends to structural development, banking,
finances, the economy and the military in the form of direct and indirect
interventions. For instance, the Chinese Government has intervened proac-
tively in economic affairs since the 1970s and managed entry into the World
Trade Organization in 2001 following 15 years of negotiations. This meant a
newimpetus towards the development of trade,the fine-tuning of a motor for
growth and prosperity, and liberalization.
The Government knew that looking outwards instead of inwards was the
route to becoming a superpower. Throughout the country, and especially in
coastal areas, domestic production and manufacturing plantswere supported.
Commercial and industrial output was directed towards internal and external
markets. Internally, this meant that job creation resulted in rising incomes,
which in turn were allocated to consumption and savings (or investments).
Externally, output was exported not only to abutting countries in the region
but also internationally, to the wealthy consumption-oriented countries in the
West. The massive selling of outputs over 30 years meant that revenues
increased exponentially. This occurred through the collection and accumula-
tion of fees, capital gains, dividends from state-owned investments, interest
income, remittances, taxes, and record profits in the private sector. As money
viii Preface
flowed into China, the Government devised a plan to spend the incoming
funds strategically (in all sorts of monetary denominations)—a centrally
planned economy figuring out how, when and where to put the money in
order to reap the most benefits.
As expenditures were allocated, strategists in China reasoned that all suc-
cessful states sit on three strong pillars: prosperity, power and security. In
order to solidify China’s foundations and pillars the Government decided to
invest heavily in education and research, infrastructure, the strengthening of
institutions, overseas business development via sovereign funds, state banks,
jointventuresandsoon,andbydevelopingamightymilitary(airforce,army
and navy). The short- and long-term rationale behind these expenditureswas
prosperity through economic growth, especially given that full employment
lifts many out of poverty, ensures social stability and prolongs the continuity
of a single-party state governed by a privileged few in the capital, Beijing.
However, the linking of these dots is incomplete without the inclusion of
essential contributions to production: energy sources, natural resources and
raw materials. The absence of these essential inputs can bring the economic
and industrial machinery to an abrupt stop, and the Chinese Government is
fully aware of this reality. With this in mind, it is at this narrowed juncture
that officials inform decision-making by understanding that there are pre-
requisites to keeping China buoyant and moving forward. And since it is
believed that the South China Sea holds the promise of vast reserves of oil
and gas, as well as an important sea conduit, it is not surprising that the
Chinese Government is so assertively focused on controlling (or owning) the
territories, resources andwaters in the South China Sea.
The problem is that China is not the only country in the region that seeks
toclaimcontrolorownershipofassetsandshippinglanesinthislocation.Six
other countries have expressed an interest in the South China Sea, all of
whichhaveoverlappingterritorialandmaritimeclaimsthatarecontestedand
disputed in bi- and multilateral settings. These countries include Brunei,
Indonesia, the Philippines, Malaysia, Taiwan and Vietnam. Estimates of oil
deposits vary greatly, ranging between 1,100m. metric tons to 17,700m. tons
of crude oil, and similarly natural gas deposits are estimated at between
25,000,000m. cu m and 57,000,000m. cu m.
Owing to the number of claimants and the complexity of handling com-
peting claims and recurrent disputes, as well as the potential windfalls from
oil and gas revenues, the Chinese Government has designed an overarching
strategy of power projection in the South China Sea, one that is aimed at
securing critical resources and heralding the arrival of a powerful military
forceinEastandSouth-EastAsia.The ChineseGovernmentisquite readyto
show its new-found assertiveness, boldness and capacity to act as a regional
leader,butneighboursareanxiousthatChinawilluseitseconomicandmilitary
power to settle outstanding claims by force.
This book comprises three parts: Introduction, Country Case Studies and
Conclusion.TheIntroductionassesses China’sexternalandinternaldynamics
Preface ix
and influences,examinesChina’ssearchforenergyand resourcesand looks at
China’s oil security through the lenses of diplomacy and economics. The
Country Case Studies explore China’s relationships with Japan, the Phi-
lippines, the USA and Vietnam with regards to claims, disputes, conflicts and
strategic interests in the South China Sea. While Japan and the USA are not
claimants or disputants to territories or resources in the South China Sea,
theyare deeply vested in the areaowing to interstate commerce, international
trade,shippingroutes,regionalsecurityandpowerbalancing.TheConclusion
incorporates insights derived from China’s actions, behaviours, reactions and
policies, and builds on a number of factors and issues identified in the Intro-
duction to produce a better understanding of the incentives, motivations and
rationales that propel China to project power and secure critical resources in
the South China Sea.
Sigfrido Burgos Cáceres
Mobile, Alabama, USA
April 2013