U.S. Options Towards a Rising People’s Republic of China

Captain Brian T. Molloy has served in the U.S. Army in Afghanistan and various posts around the U.S.  He presently works as a Project Manager at the U.S. Army Corps of Engineers in Pittsburgh, PA.  The opinions expressed in this article are his alone and do not reflect the official position of the U.S. Army, the Department of Defense, or the U.S. Government.  Divergent Options’ content does not contain information of an official nature nor does the content represent the official position of any government, any organization, or any group.


National Security Situation:  U.S. options towards the People’s Republic of China (PRC) as it continues to rise and increase its influence in the region surrounding the South China Sea (SCS).

Date Originally Written:  January, 26, 2017.

Date Originally Published:  March 20, 2017.

Author and / or Article Point of View:  Author is an active duty U.S. Army Officer.  Author believes in the use of force as a last resort and where possible, diplomacy should be the primary lever in influencing foreign powers.

Background:  The U.S. and the PRC are currently playing out a classic dyadic relationship according to power transition theory[1].  This power transition theory is playing out in the SCS with the rising PRC asserting itself militarily and the declining U.S. attempting to reassert control of the region by addressing such military action with “balancing” actions.  Recently U.S. balancing actions have utilized the military instrument of power with the Pacific Pivot[2] and freedom of navigation missions as the most visible.  This U.S. response is playing directly into the beginning stages of a conflict spiral that so often follows with a power transition[3].  The idea of a military deterrent is often floated as the logical alternative to war.  In this case, however, both of the major powers are already a nuclear power with a nuclear deterrent in place.  This nuclear deterrent works to ensure that a direct conflict between the two would be unlikely, however, as we saw in the Cold War, this deterrent does not keep the powers from fighting through proxy wars.  The options presented in this article assume rising influence of the PRC and a declining influence of the U.S., both militarily and economically, in the region.  The SCS has become a potential flash point between the two powers as the PRC uses it’s military to claim land that is also claimed by longtime U.S. Allies in the region.

Significance:  In an increasingly multi-polar global environment, regional powers such as the PRC are becoming a larger threat to U.S. interests throughout the world.  The potential for conflict in the SCS represents the opportunity for the U.S. to either assert influence in the region or cede that influence to a rising PRC.  Control of the SCS is essentially a trade-driven power move by the PRC towards its neighbors.  As such, trade could be the primary focus of the response from the U.S.towards the PRC vice a more dangerous military confrontation.

Option #1:  The U.S. and the PRC seek a strong bi-lateral trade agreement to replace the Trans Pacific Partnership (TPP) and the U.S. leverages negotiations on this trade agreement to provide security guarantees to allies in the SCS region.

With the downfall of the TPP the option to enter into a strong bi-lateral trade deal with the PRC is now open.  Negotiating this deal requires nuance and the ability to intertwine defense and trade into an agreement that is both beneficial to all economically, but also sets limits on military actions seen to be provocative to the U.S. and its Allies in the region.  Precedent for this sort of diplomatic economic deterrent action can be seen in post WWII Western Europe with the European Steel and Coal Community (ECSC)[4].  When complete, Option #1 would be an economic deterrent to conflict in the region.  This economic deterrent will utilize trade agreements to ensure the U.S. and the PRC are entwined economically to the point that a military conflict, even a proxy conflict, would be too costly to both sides.  This economic deterrent could be the action that needs to be taken in order rebalance power in the region.

Risk:  The largest risk in entertaining this approach is that it opens the U.S. to the risk of an economic catastrophe if the approach fails.  This risk would likely be unpalatable to the U.S. public and would have to be crafted carefully.  Additionally, under the current administration, a trade deal similar to this could be difficult due to the ongoing rhetoric coming from the White House.  Finally, this approach risks leaving long-time U.S. Allies no way to dispute their claims in the SCS.

Gain:  This agreement gains the lessened risk of a conflict between the U.S. and the PRC and also has the potential for large economic growth for both sides.  A mutually beneficial trade agreement between two of the largest economies in the world has the potential to remove the risk of conflict and simultaneously improve quality of life domestically.

Option #2:  The U.S. can use its trade power to balance PRC influence in the region through encouraging the Association of Southeast Asian Nations (ASEAN) to trade as a bloc.  This is essentially an Asian version of the European Union which can build multilateral trade agreements and also leverage economic sanctions to assert power in the region.  Building ASEAN to be able to handle this would require a more inclusive membership of some of the more powerful Asian countries, Japan, and the Republic of Korea among them.  This effort would require a radical overhaul of the ASEAN bloc but would benefit much smaller countries as they try to address the influence of the PRC.

Risk:  The U.S., particularly under the current administration, is not a proponent of supranational organizations.  In order for Option #2 to work the U.S. must have a stake in the game.  Additionally, the U.S. risks losing influence in the region to the newly formed ASEAN economic power.  There is the possibility that the newly formed ASEAN could forge close ties with the PRC and other trading partners and leave the U.S. out.  Finally, the SCS is fraught with competing claims not only between the PRC and ASEAN members, but among ASEAN members themselves.  Those conflicts must be worked out before the ASEAN bloc could effectively manage the PRC.

Gain:  This option allows the U.S. to leverage the comparative power of an ASEAN bloc of mostly friendly countries to impose sanctions on the PRC on its behalf.  In this way the U.S. is pushing regional allies take care of their own backyard while still maintaining influence in the region.  The U.S. also benefits as it is able to trade effectively with a large number of Asian countries without entering into a free trade agreement like the TPP.

Other Comments:  None.

Recommendation:  None.


Endnotes:

[1]  Garnett, J. (2010). The Causes of War and the Conditions of Peace, in John Baylis et al, Strategy in the Contemporary World: An Introduction to Strategic Studies’ (3rd Edition OUP 2010), (pp. 19–42). Oxford, UK: Oxford University Press; 3rd Edition

[2]  Panetta, L. E., & Obama, B. (2012). Sustaining U.S. global leadership: priorities for 21st century defense. (pp. 2). Washington, D.C.: Dept. of Defense.

[3]  Cashman, G. & Robinson L. (2007). An Introduction to the Causes of War. Patterns of Interstate Conflict from World War I to Iraq. (pp. 1–25). Lanham, MD: Rowman & Littlefield Publishers Inc

[4]  Alter, K, & Steinberg, D. (2007). The Theory and Reality of the European Coal and Steel Community.  Buffet Center for International and Comparative Studies, working paper No. 07-001

Association of Southeast Asian Nations Brian T. Molloy China (People's Republic of China) Economic Factors Option Papers South China Sea

Options to Increase Arab Middle East Stability Through Economic Investment

Nathan Field is an Arabic speaker and a commentator on Middle East politics whose perspective differs from others in that it is based primarily on experience in the private sector in the Arab world, including two years as part of the management team on a U.S. one billion dollar engineering project in Saudi Arabia and five years building up and then selling a translation company called Industry Arabic.  Follow him on Twitter at @nathanrfield1 and read his other articles and expert interviews at Real World Arabic.


National Security Situation:  The unprecedented instability in the Arab Middle East consists of three major inter-related problems: the surge in disgruntled people attempting to migrate to the European Union (EU), the decades long but newly accelerating growing appeal of Islamic extremism, and the collapse of a once hopeful Arab Spring reform process.

Date Originally Written:  December 8, 2016.

Date Originally Published:  January 19, 2017.

Author and / or Article Point of View:  This article is written from the perspective of possible approaches to the Arab Middle East that might be taken by the incoming Trump administration.

Background:  The three aforementioned security issues are a logical symptom of the socio-economic weakness of the majority of Arab countries, with the exception of a few highly resource-endowed countries such as Qatar and the UAE that have relatively small populations.  In a ruthlessly competitive global economy, the economic pie is only large enough to provide status, purpose, and meaning to about 20% of the populations.  The other 80% of the population in countries like Egypt and Tunisia are not necessarily poor.  In fact, in many cases they may even have a university education.  But what this often means is that in practice, they are educated enough to know what is out there, yet also to sense that they have little chance of crossing into the 20%.  For this 80%, contrary to the views of many Washington D.C.-based foreign policy research organizations, elections offer little hope because they do not address the economic status quo.  This 80% is precisely the demographic that is at risk to embrace violent extremist ideologies and to seek to flee to the EU as economic migrants.

Significance:  Understanding the economic roots of the instability in the Arab Middle East is critical to formulating long-term solutions.  Traditional research into the instability in the Arab Middle East has minimized the role of economics.  In research, economics and politics are often compartmentalized and treated as two separate problems while in fact they are one and the same.

Many commentators on the Arab Middle East make the mistake of overlooking that democracy and universal human rights are at the very top of the Maslow Hierarchy of needs as matters of self-actualization and esteem.  Democracy and universal human rights can only come when there is enough of the far more important economic development so that a critical mass of the population can obtain purpose, meaning and basic status economically.  Only when that is achieved is it possible to obtain desirable democracy.

Option #1:  A significant new U.S. focus on promoting Lower Tech Entrepreneurship and Small Businesses, not Tech Startups.

Since 2011, the U.S. government has allowed the concept of entrepreneurship promotion to somehow come to exclusively mean Tech Startups.  The problem with Tech Startups is that by definition they seek to use technology to eliminate human labor.  Moreover, the types of people in countries like Egypt and Tunisia who are capable of being competitive in Tech Startups are generally from high socio-economic backgrounds.  Instead, the focus should be on promoting Lower-Tech and more labor intensive Small Businesses and Medium Businesses[1] in order provide opportunity to a greater percentage of the population.   

Risk:  The only risk is that the programs might not be effective.  Some funds may be wasted, but otherwise the consequences will be minimal on the basis that there was nothing to lose.

Gain:  If the programs succeed, they will create significant new jobs for those from the populations that need it most.  Yet even if they do not succeed 100%, they still send the message that there is hope and something to work for back home and may inspire economic migrants to return home. 

Option #2:  Increased emphasis on vocational education combined with targeted industrial development.

The dominant Arab Middle East education paradigm wrongly assumes a linear connection between the quantity of degree holders and new jobs thus economic growth has proven a disaster.  This education paradigm is only producing more disgruntled degree holders with higher expectations that are unlikely to be met.  As part of Option #2 the U.S. would strongly support the growth of vocational education combined with targeted industrial development[2].

The Philippines serves as a classic example of what is possible in targeted economic development.  The country went from having no presence in the call center industry in  1997 to being the global leader in 2012[3].  With greater vocational capabilities, Arab Middle Eastern countries will be in a better position to explore the development of new industrial activity and provide reasonable employment opportunities to the lower 80% of the population.  The Moroccan aviation industry serves as a Middle Eastern success story, showing how state-centric leadership plus strong vocation programs can lead to significant new economic status[4].   As a result of Morocco’s policy, over 50,000 very good jobs for Moroccan nationals were created.

Risk:  The biggest risk is that if Option #2 does not work then some money and effort will be wasted.

Gain:  The programs work.  Yet they still “gain” even if they do not work.  Spending new money to prop up some of these programs is still a huge gain, because it at least sends the message that there is something new in the works.

Other Comments:  None.

Recommendation:  None.


Endnotes:

[1]  Field, N. (2016, May 19). Not Just Tech: Entrepreneurship in the Middle East. Retrieved January 10, 2017, from https://timep.org/commentary/not-just-tech-entrepreneurship-in-the-middle-east/

[2]  Field, N. (2016, July 11). Stop Sending So Many Young People to University. Retrieved January 10, 2017, from http://www.al-fanarmedia.org/2016/07/stop-sending-so-many-young-people-to-university/

[3]  Lee, D. (2015, February 1). The Philippines has become the call-center capital of the world. Retrieved January 10, 2017, from http://www.latimes.com/business/la-fi-philippines-economy-20150202-story.html

[4]  Larmandieu, V. (2015, February 12). Morocco’s aviation industry spreads its wings. Retrieved January 10, 2017, from http://www.cnn.com/2015/02/12/africa/morocco-aviation-industry-spreads-wings/

Economic Factors Middle East Nathan Field Option Papers