Even as the world digests China’s rise as an economic power, it is not clear how much it wants to leverage that in other areas. Like Janus, the two-faced Roman God, China presents itself both as friend and foe.

Both presidential candidates in the US elections this year have brought China issues to the forefront. Romney, as a Republican, is pro-trade and open markets, but something about China bothers him.

He has said that if elected President, he would brand China a currency manipulator and that too on his first day in office!

Not to be left behind, President Obama has shown that he can also act. His administration has brought several trade cases against China, the most recent one being subsidies for auto parts exports, which fitted in quite nicely, while he was on the campaign trail in States whose businesses suffer due to cheap auto part imports.

A recent survey by the Pew Research Center in the US shows that most Americans consider China a competitor rather than an enemy, although a majority believes that you cannot trust it.

China, meanwhile, has been adding fuel to everyone’s fears about its intent and behaviour. Look at what’s happening off China’s coast.

Dispute over ownership

There are two stories going on at the same time. One is the current problem over the ownership of a few uninhabited islands in the East China sea. The Japanese and the Chinese give it different names, which is part of the historical controversy over who has rights to them.

Escalating the current fight, Japanese businesses in China have been attacked, and factories of Honda, Panasonic and others have shut. Japanese restaurants in China have covered their frontage so as to avoid attention.

The Japanese government, on its part, decided to buy the islands from the private individuals who owned it. Here is a rich and explosive mixture of nationalism and economic motives. Many analysts’ explanation for the fight is that ownership of the islands would give rights to fishing territory, apart from gas and oil fields nearby.

But there is another story underlying this fight and that brings super-power ambitions into the mix of economics and nationalism.

Dominance over seas

China is encircled by a ring of islands, known as the First Island chain, that looms large in the psyche of strategists in the US and China. The US has always wanted to keep control of that string and does so not only with its naval fleet scouring the waters, but also from bases on Okinawa, in Japan, and a part of the island chain. The writings of Alfred Mahan, a US strategist who believed that a nation’s greatness is linked to its naval power, long influenced US policy. Dominance over the seas gave a nation power both during peace (for commercial purposes) and during war.

In a recent presentation in Boston, Toshi Yoshihara, a professor at the US Naval War College, argued that although Mahan’s thinking seemed to be on the wane in the US, the Chinese appear to have adopted it.

This can explain the Chinese interest in fighting over un-inhabited islands for it is a preamble and useful posturing for the country as a naval power.

The domestic anti-Japan protests need not be taken too seriously for the government can usually set them off with a wink and a nod, and control it as easily.

But nationalistic demonstrations can presage something else. The Economist, a British magazine, in a recent editorial, warned that a similar situation where nationalism combined with a dictatorial government (read Germany) did not turn out too well for the rest of the world.

China’s behaviour is making Vietnam and the Philippines quite nervous. And there is, of course, the question of Taiwan.

However, in the Pew survey referred to earlier, foreign affairs experts in the US appear to be sanguine about China. Only about 30 per cent of the experts surveyed consider China’s emergence as a power to be a threat to the US.

Right timing

All the posturing by China ties in quite nicely with the arguments of Paul Kennedy, a US historian, who argued that a country’s super power status depends on a synergistic mix of economic and military power; they feed off each other and it is not enough to be the one without the other.

China, whose people believe its time has come, would not be satisfied with just their current economic status as the second largest global economy, and soon to be the largest. Their military power needs to keep pace and, hence, the desire to move their navy from a coastal defensive to an offensive blue water capability. To paraphrase Sun Tzu, it is important to be able to win a war without fighting.

Thus, if you are a strategist, the timing of the fight over the islands will make a lot of sense. With political positions in China and Japan both at play, it is the right time to flaunt a bit of nationalism. Rival groups among the Chinese leadership are perhaps seeking influence in and control of the next government.

The People’s Liberation Army (which reports to the party leadership) is always a powerful string-puller from behind. The lack of transparency in the Chinese political structure leaves us all guessing about the implication for the rest of the world if one group versus another gets hold of the keys to power.

The US, which is seeing a challenge to its sole super-power status, will try to get the other ‘enemies’ of China to be its friends.

The only game in town for everyone else seems to be to support continued strong US presence in the region. And the Japanese and the US forces have already undertaken military exercises to drill for a possible invasion of the islands.

(The author is professor of International Business and Strategic Management at Suffolk University, Boston, US. blfeedback@thehindu.co.in)

(This article was published on October 7, 2012)
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